Judge Sentencing
Daniel Johnson, former president/CEO of the $6.3 million Richmond City Employees Federal Credit Union in Indiana, is scheduled to be sentenced in October after pleading guilty to defrauding the credit union out of $300,000, according to court filings.
Johnson pleaded guilty to two felony counts of bank fraud in June in U.S. District Court in Indianapolis. After he was originally indicted in March, federal prosecutors filed a superseding indictment in June.
In a plea agreement with federal prosecutors, Johnson admitted to submitting two fraudulent loan applications, each for $150,000, claiming the funds would be used to purchase recreational vehicles. Instead, he used the money to buy a house and pay off personal debts.
Johnson submitted the first fraudulent loan in August 2021, falsifying credit union records to make it appear the board of directors approved the transaction. He used $65,697 of the loan to repay previously obtained secured loans and applied the rest toward buying a house and paying additional debts.
In September 2021, Johnson applied for a second fraudulent loan and forged the signature of his then-wife on the loan paperwork. This was an attempt to conceal the transaction from the NCUA, in violation of credit union policy, according to court documents.
He used part of the second loan to pay off a previously secured $10,103 loan and wired the remaining funds to other financial institutions to settle various personal obligations, including student loan debt.
Federal prosecutors reported the credit union’s total loss was $285,855.
Richmond City Employees FCU, which served 788 members, was conserved at the end of 2022 because of unsafe and unsound practices, according to the NCUA.
The credit union recorded a loss of $578,414, according to its last Call Report in March 2023. A month later, Richmond City Employees FCU was merged into the $1.7 billion Kemba Credit Union in West Chester, Ohio.
Peter Strozniak can be reached at pstrozniak@cutimes.com.
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