Credit union managers pleads guilty to stealing $898,000; ASI pays out $3.8 million

IRONTON, Ohio – The manager of a defunct credit union here pleaded guilty in state court to stealing $897,910 from credit union members between 1990 and 2002. Douglas Calhoun, who was manager and treasurer of Ironton SSP CU, changed his plea from innocent to guilty at a hearing Nov. 6. The theft forced the liquidation of the credit union, triggering one of the largest payouts in the history of American Share Insurance fund. Dennis R. Adams, president and CEO of ASI, said the insurer has paid out $3.8 million to more than 450 members, 99% of the credit union’s assets. Only two members had accounts exceeding ASI’s account limit of $250,000. Adams described Calhoun’s theft as unlike anything he has seen in 26 years as a credit union auditor and ASI executive. The credit union did not have a computer, and Adams said Calhoun created two sets of books which allowed him to hide his theft from state auditors. “This was a case of unreported liability,” Adams said. “Money was received, but not put on the books.” An attorney familiar with the case said little money was ever withdrawn from the credit union, since it continued to pay 8% on its share accounts and many of its members were elderly. But when a member with a large account died, one of her heirs sought to move the $270,000 account. “(Calhoun) did everything in his power to ask the estate to keep the money in the credit union,” said the attorney, who would not speak on the record. When money was brought in for deposit, Calhoun, who operated the credit union by himself in a one-room office, would record it on his public set of books as he pocketed the money. “He was an upstanding member of the community across the river,” the attorney said of Calhoun, who lived in Russell, Ky. “He was revered there.” One credit union member told the Huntington, W. Va., Herald-Dispatch that Calhoun was a friend of his who gambled heavily at a dog track. Calhoun had been charged with 13 felony counts of theft Sept. 25, one count for each year of the ongoing fraud. Lawrence County prosecutor J.B. Collier said it is likely that Calhoun will be sentenced to no more than five years in prison at a sentencing hearing Dec. 4. “That’s kind of obscene,” Collier complained. “If a guy robbed a filling station and got $1 he would get more time than this guy.” He attributed the light sentence to a change in Ohio sentencing guidelines in 1996. The court could consider the ongoing deception a single count of theft, justifying only a five-year sentence. “There’s going to be an order of restitution,” Collier said, “but right now he’s claiming poverty.” ASI and the two members not fully repaid by the insurance company have filed a civil suit in Lawrence County seeking to recover the stolen money. -