A former president/CEO of a Washington credit union, who stole more than $350,000 and burned bank documents to conceal her theft during an NCUA examination, was sentenced last week to 14 months in prison.

Krista Stephanie Putnam, former president/CEO of the $3.3 million Grays Harbor Woodworkers Federal Credit Union in Aberdeen, pleaded guilty in November to five first-degree theft charges. One count of second-degree arson was dropped.

Putnam was ordered to pay $335,758 in restitution, according to Grays Harbor County Prosecutor Katie Svoboda.

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"In this case, the defendant took full advantage of her position at the credit union to benefit financially," Svoboda wrote in her sentencing memo. "She was trusted and the oversight of her work was minimal."

An audit conducted by Washington certified public accountants, Aiken & Sanders, initially reported that Putnam allegedly stole more than $350,000.

On March 29, 2016, NCUA examiner Michael Fetter and Michael J. Dyer, an NCUA associate regional director for programs, arrived at the GHWFCU. After they knocked on the credit union's front door, which was locked, Putnam came from the back of the building and told Fetter and Dyer there was a fire in the credit union.

"Myself, ARDP Dyer and Putnam walked around to the back of the building," Fetter wrote in his statement to police. "ARDP Dyer pushed open the door at that point to peek into the credit union. We could not see any flames but the smoke was building."

Soon after the firefighters doused the flames, they suspected the blaze was deliberately set though it caused only minor damage.

Dyer told fire and police investigators he was at the credit union with Fetter because of "concerns about potential financial irregularities." The day before the fire, Fetter arrived unannounced at the credit union and requested to see bank reconciliation documents.

"I considered the fire suspicious and asked whether he (the fire official in charge at the scene) could tell if the fire had been intentionally set," Dyer wrote in his police statement. "He indicated he could not say with any certainty but the information I provided was interesting."

The documents examiners requested were burned in the fire, according to the police investigation.

The police investigation also revealed that Putnam allegedly wrote five fraudulent loans in a member's name. That member, a business owner, hired Putnam to pay bills for his company, but police discovered Putnam allegedly made unauthorized payments to herself for more than $11,000 from the business owner's account.

In January, GH Woodworkers Federal Credit Union was merged into the $139 million Great NorthWest Federal Credit Union also based in Aberdeen.

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Peter Strozniak

Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.