Having sole access to records enabled a former president/CEO of the $19 million Oil Country Federal Credit Union to embezzle more than $47,000 over four years from the Titusville, Pa.-based cooperative.
Lisa Hauptmann was sentenced Friday to serve one day in prison, six months of community confinement and six months of house arrest, according to federal prosecutors. U.S. District Court Judge David S. Cercone in Erie, Pa., also ordered her to pay restitution of $47,600.
In court documents, Hauptmann took cash advances on credit cards by siphoning funds from the credit union. On a typical credit card cash advance, the paperwork is processed so that the proper credit card is charged.
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After taking the cash advance, however, Hauptman manipulated the credit union records so that the credit cards would not get charged, which prevented the credit union from being paid back by the credit card companies.
What's more, Hauptmann signed into the credit union computer system using different employees' names and their passwords, making it appear that other employees were doing the transactions. She also did this in an attempt to reduce her culpability if the theft were uncovered, federal prosecutors said.
After employees found out Hauptmann was using their names and passwords, she was questioned by senior employees. She then lied and convinced them of her innocence. Court documents did not explain how Hauptmann got their passwords.
Her theft was uncovered during an NCUA audit; at that time, she no longer had sole access to credit union records that helped her conceal her scheme.
Her lawyer, Grant C. Travis of Edinboro, Pa., indicated in court documents that his client stole from the credit union because she was struggling financially and living paycheck to paycheck. He asked the federal judge for a sentence of no jail time, house arrest and probation because Hauptmann had no previous criminal background and was living a frugal and rural lifestyle.
However, prosecutors sought prison time of 12 months to 18 months, arguing she stole out of greed by supplementing her income to maintain her lifestyle.
In addition, in its victim impact statement, Oil Country said its community confidence was damaged because of the incident, citing an unspecified amount of account closures and a drop in new accounts.
According to the credit union's call reports, however, its number of members fell from 3,414 in December 2015, two months after Hauptmann's indictment in October, to 3,376 members by the end of March 2016.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
