Lawsuit filed to nullify a credit union claim.

An insurance company is asking a federal court judge to rescind an insurance bond policy to nullify a $1.2 million claim made by the $55 million Greater Eastern Credit Union after its former CEO admitted to embezzlement.

Sherry Ann Allen stole more than $1.1 million from the Johnson City, Tenn.-based credit union using a hidden transaction feature, knowing no one reviewed hidden transactions, enabling her to move large sums of money into and out of accounts she controlled over seven years. Earlier this month, Allen signed an agreement with federal prosecutors to plead guilty to theft and income tax evasion. She admitted to using the stolen funds to pay for her credit card bills, her cars, her clothes, her jewelry, and she also funded cruises and trips for her church’s youth group and credit union employees. Johnson also handed out expensive gifts to employees at GECU’s Christmas party and at its annual picnic.

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Peter Strozniak


Credit Union Times

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