The former CEO of the $231 million Valor Federal Credit Union is facing up to 60 years in prison after pleading guilty to bank fraud and attempted bank fraud Thursday in U.S. District Court in Scranton, Pa.
Sean E. Jelen, 33, admitted to committing a series of fraudulent schemes from July 2014 to August 2015, federal prosecutors said.
He embezzled $718,000 to pay for credit card bills, college tuition, his spouse's birthday party and a golf tournament sponsorship. He also tried to steal $1.1 million by creating a forged severance contract before he was fired by the board of directors in August 2015.
About five months prior to his termination, Jelen rigged Valor's board of directors' election by electing an individual only identified in court documents as R.T. But Jelen did this without R.T.'s knowledge.
He also elected Suzanne Forrest to the board's supervisory committee. However, Forrest did not exist. Jelen allegedly impersonated both Forrest and R.T. so that he could continue his fraud, according to court documents.
Federal prosecutors have declined to discuss how Jelen impersonated a board member or how he elected a fake supervisory board member.
According to court documents, Jelen also agreed to forfeit a home at Breezy Point, a New York City borough of Queens at the western end of the Rockaway peninsula. New York's Multiple Listings Service estimated that Jelen's house at 37 Jamaica Walk is valued at $613,000.
Jelen's attorney Michael Van Deer of Feasterville, Pa., did not return a call from CU Times seeking comment Friday morning.
Jelen was appointed president/CEO in 2012 when he was 29 years old.
Before joining what was then called Tobyhanna Federal Credit Union, he served as COO for the $158 million Palisades Credit Union in Pearl River, N.Y. He also worked on Wall Street as a controller for a mutual savings bank.
In June 2014, Jelen was featured as a CU Times Trailblazer 40 Below.
The young, up-and-coming CEO began his fraud in July 2014 when the credit union changed its name and brand from Tobyhanna to Valor.
In court documents, federal prosecutors detailed how Jelen carried out and concealed his scheme by manipulating credit union records and forging documents to make the payments appear legitimate.
For example, he got Valor to cut a check for more than $30,000 to a vendor that hosted his wife's birthday party, in part, by forging the vendor's service contract and forging a special purchase authorization that disguised the payments as an employment incentive. He also altered Valor's books and records to disguise the payments.
Under the attempted fraud charge, federal prosecutors said Jelen forged a severance contract that provided various payments and other benefits to him, including insurance and annuity policies worth more than $1 million.
Court documents did not reveal how the fraud was detected. A sentencing hearing has not been scheduled yet.
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