Over three years, Santay stole nearly $500,000, gambling every penny at local casinos, believing that at any moment she would hit the “big one,” he said.

Predictably, the big win never came and Santay was in big trouble when a NCUA field examiner reviewed employee accounts and detected unusual activity. When confronted about the discrepancies, Santay admitted to her check kiting fraud.

She wrote checks from her account and a family member and made the checks out as payments to family members, credit card companies and others. However, those checks were never sent to the payee. Instead, Santay described in court documents that she created deposit slips and credited her account for the amounts on the checks, and she did not immediately include those checks in the daily deposits forwarded to the Federal Reserve Bank. Santay held on to the checks for a few days or weeks and then completed the deposit once she had another series of worthless checks to deposit.

“On March 31, 2015, I credited my checking account at Lakeside FCU for $29,475.91 in checks I supposedly deposited into my account,” she said in court documents. “In fact, I never deposited those checks.”

Four months later, the NCUA liquidated the $7.5 million Lakeside FCU that served more than 2,200 members.

The check-kiting fraud first surfaced in April 2017 when the NCUA filed a fidelity bond civil lawsuit in an Indiana U.S. District Court against Southwest Marine and General Insurance Co. after the Scottsdale, Ariz.-based company rescinded Lakeside fidelity bond coverage because Santay did not give truthful answers to internal control questions on the insurance application.

Months after that civil lawsuit was filed, Awe was indicted in October 2017 and Santay was indicted in December 2017.

The NCUA voluntary dismissed its lawsuit in June 2017 after the insurance company countersued the federal agency over the fidelity bond dispute in U.S. District Court in Austin, Texas.

Southwest Marine is seeking a judgement that would declare Lakeside's fidelity bond coverage null and void. The NCUA is contesting Southwest Marine's request for declaratory judgment arguing that the insurance company allegedly breached its contract with Lakeside FCU and the federal agency that is the credit union's liquidating agent.