A federal appeals court Thursday upheld the six and half-yearprison sentence of a former credit union CEO who embezzled nearly$2 million from a Michigan credit union.

Kathryn Sue Simmerman, the former manager ofthe $17.3 million Shoreline Federal Credit Union, was sentenced tosix and a half years in federal prison by U.S. District Court JudgeRobert Holmes Bell in Grand Rapids, Mich., on Jan. 4, 2016. He alsoordered her to pay $1.9 million in restitution.

Bell gave Simmerman only one year less than what prosecutorsrequested based on federal sentencing guidelines. She pleadedguilty in July 2015 to embezzlement and structuring transactionsto evade reporting the credit union's financials that nearlydestroyed the Norton Shores, Mich.-based cooperative.

Just three days after the former CEO was sentenced, she filed anappeal based on whether the district court's sentence was in errorbecause of its assessed enhancements. Set by the U.S. SentencingGuidelines, enhancements are facts and circumstances that a judgecan use to increase a defendant's prison sentence.

In Simmerman's case, the enhancements were the use ofsophisticated means to carry out and conceal the embezzlement,jeopardizing the soundness of a financial institution and abuse ofa position of trust.

“Because the (Michigan) district court did not clearly err whenit assessed the sentencing enhancements, we affirm the districtcourt's decision,” the U.S. Court of Appeals for the Sixth Circuitin Cincinnati, Ohio, wrote in its ruling.

In its 11-page ruling, the Appeals Court said that the amount ofmoney Simmerman embezzled represented 86% of the earnings thatShoreline FCU accumulated over its entire 62-year history.

“The (Michigan) district court noted that Shoreline was luckythat there were not any large demands on Shoreline before itrecovered on its fidelity bond since Shoreline likely would not beable to meet the demand given Simmerman's embezzlement,” theAppeals Court wrote. “This was not a clearly erroneous conclusiongiven the amount of money that Simmerman embezzled compared to thesize of the credit union.”

Shoreline FCU posted a net worth of 8.52% at the end of 2016,down from 13.05% at the end of 2012, according to NCUA financialperformance reports. The credit union's ROAA was -0.24% in December2016, compared to -0.02% in December 2012.