Source: Shutterstock.
Former credit union executive Josephine M. Crowe pleaded guilty Tuesday in a Kentucky federal court for stealing more than $3 million from the Louisville Metro Police Officer's Credit Union that led to its liquidation last year.
The 46-year-old former vice president and loan officer of Louisville pleaded guilty to one felony count of financial institution fraud and one felony count of aggravated identity theft, according to Russell Coleman, United States Attorney for the Western District of Kentucky.
Recommended For You
From January 2013 through November 2017, Crowe stole cash from the credit union's vault and teller drawers. To replenish that missing cash, she took money from the credit union's day-to-day operations by directing employees, members, and others to withdraw cash from an ATM using either a debit card that Crowe provided or the individual's personal debit card and instructed them to return the cash to her for the credit union operating needs, according to court documents.
Crowe also obtained funds from cash advances using members' credit cards, wiring funds to external accounts at other financial institutions and then obtaining cash from the transfer. She also recorded fictitious loans and used those funds to issue an official check. Crowe then directed unwitting individuals to cash the check at local pawn shops or financial institutions and return the money to her so that she could replace the cash she stole from the vault and teller drawers, according to court documents.
Additionally, a federal investigation determined Crowe created hundreds of phony loans by generating fraudulent loan documents and agreements between the credit union and unwitting members to cover up her theft. She also created fake loans to pay legitimate loans without the knowledge of members because Crowe used their identities to create the fictitious loans.
Federal prosecutors noted that in September 2016, Crowe created a fake loan for $100,000 in a member's name and then collateralized the loan with a certificate of deposit owned by that member but without that member's knowledge, consent or authorization.
Crowe then deposited the loan proceeds into an account held by that member. Fifteen days later, the former executive withdrew $100,000 in cash. She used the name, social security number, and date of birth of that unwitting member to carry out this fraud, prosecutors said.
Crowe could receive a minimum term of imprisonment of 24 months or a maximum term of imprisonment of 32 years and a combined maximum fine of $1.25 million followed by no more than 3 years of supervised release.
Seven months after authorities launched an investigation into theft allegations at the $18.5 million Louisville Metro Police Officers CU, state regulators decided in June 2018 to appoint the NCUA to liquidate the cooperative that lost more than $3.4 million in 2017 and $2.1 million by the end the 2018's second quarter, according to NCUA financial performance reports.
The credit union served more than 3,000 members.
The $1.3 billion Commonwealth Credit Union of Frankfort, Ky. assumed LMPOCU's membership, shares, loans, and all other assets.
© 2025 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
