Federal investigators allege a potential theft of $1.7 million occurred at the $10.4 million Centra Health Credit Union, according to an affidavit filed in U.S. District Court in Roanoke.
Claudia A. Rawes, manager/CEO of the Lynchburg, Va.-based cooperative, and two other employees were placed on administrative leave following a state and federal examination in January, according to a prepared statement on the credit union's website.
However, court documents reveal the FBI and U.S. Secret Service received a complaint about Rawes on Nov. 17. More than six weeks later, on Jan. 7, credit union security officers showed up at Rawes' home to pick up her keys to the credit union, her employee ID and any credit union documents.
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State examiners and Centra Health CU's lawyer notified the FBI on Jan. 9 that documents they removed from Rawes home appeared to be altered from the SunTrust Bank corporate account of Centra Health.
Specifically, a Centra Health corporate account statement from SunTrust Bank reflected an ending balance of $2,437,556 that was typed on a paper tag taped to the statement, which covered what appeared to be the actual balance of $907,000 on the original statement, according to the investigator's affidavit.
Additionally, personal bank statements from two different financial institutions in the name of Rawes and her husband also appeared to be altered to show higher balances.
A state examiner also told federal investigators that the true SunTrust Bank account balance was verified. When compared with the credit union's general ledger balance for the SunTrust account, however, it indicated a discrepancy or potential theft of approximately $1.7 million, according to court documents.
The audit also showed that certain checks drawn on Centra Health's corporate SunTrust account were used to pay Rawes' personal Capital One Bank credit card. She gave examiners back up documents for several of the credit union checks issued and remitted to pay her personal credit card.
"Rawes reported the funds to pay her credit card were from gambling winnings," according to the affidavit.
Centra Health records also showed improprieties, including that deposits were made to the accounts of certain credit union members and then reversed. A credit union check was then issued in the amount of the deposit/reversal and disbursed via a check drawn on the credit union's SunTrust Bank operating account number, according to the court papers.
The affidavit also reveals that examiners discovered "suspicious emails between Rawes and a co-worker" only identified as C.F.
On Jan. 15, federal investigators executed a search warrant for Rawes' home and removed a cell phone, computers, iPads and various financial and gambling records, according to search warrant documents.
A voicemail message seeking comment from Centra Health was not immediately returned Thursday morning.
According to NCUA financial performance reports, Centra Health's net worth plunged from 15.82% in December 2013 to 3.31% in December 2014. Its ROAA was -12.84% at the end of last year. The ROAA peer average was 0.24%.
In its NCUA financial performance report for December 2014, Centra Health recorded a loss of $1.2 million in the non-operating income & expense line item. For the year, the credit union posted a total net income loss of $1.3 million.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
