Debra Kinney, the former CEO of Border Lodge Credit Union in Derby, Vt., will serve three years in federal prison for embezzling more than $630,000 from accounts of 33 members.
Kinney, 59, of Derby, was also ordered by U.S. District Court Judge William K. Sessions in Burlington on Monday to serve five years of supervised release after completing her prison term and to pay restitution in an amount that will be determined within three months, according to court documents.
Pleading guilty to fraud charges in December, Kinney admitted to embezzling funds by writing checks against member accounts to herself or family members, prosecutors said. In addition to the guilty plea, she also agreed to pay the U.S. government $250,000 by forfeiting her property.
On Nov. 30, 2012, the FBI, state and federal bank regulators searched the credit union and seized documents based on evidence of widespread fraud and misappropriation of funds from member accounts. On that same day, the Vermont Department of Financial Regulation closed the $3.1 million Border Lodge CU and appointed the NCUA as the liquidating agent.
The decision to liquidate the credit union was to conserve the assets and protect the interests of the 1,097 members, the Vermont DFI said.
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