Kathryn Sue Simmerman, the former manager of the $16.3 million Shoreline Federal Credit Union, admitted in U.S. District Court in Grand Rapids, Mich. Wednesday that she stole nearly $2 million over 13 years by taking cash from the vault and concealing it in her purse.
In a plea deal, Simmerman agreed to plead guilty to embezzlement and structuring transactions to evade reporting requirements.
Although the former manager of the Norton Shores, Mich.-based cooperative faces up to 30 years in prison, Simmerman is expected to receive a reduced sentence if she complies with all conditions in the plea deal filed in federal court Wednesday.
Starting on Oct. 1, 2001, she began taking cash from the credit union’s vault and then deposited some of the funds in Shoreline FCU accounts that she controlled. She spent the rest of the stolen money.
To avoid triggering a currency transaction report, she made cash deposits that were less than $10,000, according to court documents. For example, in October 2014 Simmerman made seven cash deposits in different amounts that ranged from $100 to $7,000.
Her embezzlement scheme continued through Feb. 3, 2015.
For more than 13 years, Simmerman managed to hide her theft from auditors and the credit union’s supervisory committee by manipulating Shoreline FCU’s financial statements to make it look like the missing cash was on deposit with Shoreline’s correspondent bank, according to court documents.
She was hired in 1987 and named the credit union’s manager in 2006; she was later fired on Feb. 27, 2015.
Court documents do not explain how Simmerman’s embezzlement was finally uncovered.
“Shoreline Federal Credit Union cannot comment on the allegations in the plea agreement due to the fact that the criminal matter is still in process,” Stephanie L. Kuziak, the current manager of Shoreline FCU, said in a prepared statement. “Shoreline did report a net operating loss in the first quarter. We fully expect to recover from it.”
At the end of Q1 2015, the credit union posted a net loss of $1,951,614. That net loss increased to $2,008,844 at the end of Q2 2015, according to NCUA financial performance reports.
In addition, Shoreline FCU’s net worth plummeted from 11.84% in June 2014 to 1.52% in June of this year, according to NCUA financial performance reports. Its ROA was -23.41%, as of the end of June.
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