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A former credit union employee is scheduled to be sentenced in August after he admitted to stealing $5.4 million over 15 years from the $8.6 billion VyStar Credit Union in Jacksonville, Fla.
In U.S. District Court in Jacksonville last week, Duane Allen Sikes pleaded guilty to mail fraud, embezzlement and filing a false federal income tax return. He is facing a maximum prison sentence of 63 years.
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Sikes, of Jacksonville, worked in VyStar's mailroom from 1994 to 2017. Part of his duties included using credit union issued checks every week to buy postage for a Pitney Bowes postage meter that paid for the credit union's mail expenses.
However, on every other week, Sikes used the credit union's checks to buy large amounts of postage stamps from the Jacksonville post office. He then shipped these stamps to a New York-based vendor, who then sold these stamps and cut a check to Sikes for his portion of the sales proceeds, according to Sikes' plea agreement with prosecutors.
Between 2007 and 2017, the vendor paid Sikes more than $3.6 million. Federal prosecutors said in court documents that the former mailroom employee sold stamps to the vendor over 15 years and embezzled a total of $5.4 million from the credit union.
VyStar said it uncovered Sikes' fraud, reported it to authorities and conducted an internal review.
The credit union called the fraud an isolated incident, which did not compromise members' personal information or accounts, and was "immaterial to the company's financials."
Court documents do not reveal how Sikes spent the stolen credit union money.
Sikes was convicted of filing a false federal income tax return because he did not report the $3.6 million in income received from the vendor, which led to a tax loss of more than $1 million for the federal government.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
