Claudia A. Rawes, the former manager/CEO of the $10.4 million Centra Health Credit Union, pleaded guilty Tuesday in U.S. District Court in Lynchburg, Va. to embezzling more than $1 million from the credit union since the early 2000s.
In court documents, Rawes admitted she wrote checks from the Lynchburg-based credit union's corporate account to make payments on her personal credit card.
To cover up the use of these corporate checks, she would deduct funds from certain members' accounts. She replaced the money from CHCU's corporate account so no shortfalls appeared on members' accounts.
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Because Rawes' theft created an increasingly large deficit in CHCU's corporate account, she began altering the corporate account statements to avoid scrutiny from state and federal regulators.
That apparently fooled the regulators for years, until they conducted a routine examination in early January, when NCUA examiners found CHCU corporate account statements had larger amounts taped over what appeared to be the actual amounts in the credit union's corporate accounts.
Following that discovery, the CHCU board of directors placed Rawes and two other employees on administrative leave.
The two other employees were not identified in court papers.
NCUA and state examiners confirmed the shortfall of more than $1 million. When questioned by investigators, Rawes admitted her embezzlement, according to court documents.
Rawes will face a sentencing hearing on July 7.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
