Prison sentence for former credit union employee. (Source: Shutterstock)
A former credit union lending director, who stole more than $800,000 from a Florida credit union and used half of the funds to pay for in-app video games, was sentenced to five and a half years in federal prison, federal prosecutors said Thursday.
U.S. District Judge Mark Walker in Tallahassee, Fla. also ordered Kevin Robert Lee to pay $979,839 in restitution to the $223 million Florida State University Credit Union, its insurance company and the IRS, including an additional $11,589 in prosecution costs incurred by the federal agency. Following his prison term, Lee will be placed under five years of supervised release.
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Lee, 35, of Tallahassee pleaded guilty to 25 counts of bank fraud, theft, aggravated identity theft and filing false federal tax returns in April.
Although he stole more than $800,000, court documents show he attempted to embezzle a total of $1.2 million. From 2016 to 2018, Lee filed tax returns in which he failed to claim as income the funds he stole from FSUCU.
Starting in June 2014, Lee used the name, date of birth, and Social Security number of the then president of the Tallahassee Chapter of Credit Unions to open a second account. For that group, Lee was the treasurer.
Prosecutors said he used the original TCCU account for fraudulent activity while using the new account he opened in the TCCU president's name for the chapter's legitimate transactions.
Lee also created two accounts using the names, dates of birth and Social Security numbers of his former college roommates. The two accounts served as "intermediary accounts," into which funds stolen from FSCUCU members were deposited.
Additionally, he also transferred funds from inactive member accounts either to pay down the lines of credit he created, to the intermediary accounts he created or into the original TCCU account.
He used the stolen funds to pay off his personal credit cards, to make mortgage and car payments and for his children's school tuition.
However, most of the money, about $500,000, was used to pay an American Express credit card that Lee used in part to pay for video game in-app purchases, with one month of purchases totaling more than $150,000, according to federal prosecutors.
When members complained about the unauthorized withdrawals or reported their low account balances, Lee told members the credit union had closed their accounts and then mailed members a check. To cover up his crime, Lee accessed other members' accounts to replace the money he had stolen, according to court documents.
At the end of November 2017, in a move very rarely taken by credit unions, the Tallahassee-based FSUCU publicly announced its long-time employee Lee had been fired for embezzlement. After learning of member account discrepancies, FSUCU immediately launched an investigation, restored the affected accounts, reached out to victimized members and notified the police.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
