After Allen became CEO in January 2014, she filled out an application to renew GECU's insurance policy. One of the application's questions asked whether any officer or director has any knowledge of any pending losses or any information that could give rise to a claim.

Allen answered "no" to this question.

Because Allen was embezzling funds from the credit union since at least 2011, Berkley Regional said that the former CEO's answer was false and that the insurance company would never have issued the insurance policy had it been aware of Allen's embezzlement.

Berkley Regional returned the $17,661 insurance premium payment to the credit union.

GECU President/CEO Danielle Brooks declined to comment on the lawsuit when reached last week.

The theft was initially exposed in February when the $55 million GECU took the highly unusual step of publicly disclosing that an internal forensic fraud investigation determined Allen stole more than $1 million.

The former CEO stole money by altering the amount due on invoices to reflect a higher amount due than the actual lower amount that was due. After the credit union cut a check for the higher amount, Allen personally processed the check, paid the actual lower amount that was due to the vendor and then deposited the difference into her account.

Federal prosecutors revealed that Allen accomplished this by manually processing the payment and checking off a hidden transaction box. The hidden transaction box is legitimately used when an employee makes an inadvertent mistake such as depositing a check into a wrong account. Employees check off the hidden transaction feature after correcting a mistake in a timely manner so that the account holder would never know the error occurred. In addition, a hidden transaction would not show up on a member's bank statement.

Allen used the hidden transaction feature to divert funds to accounts she controlled and to ensure no one at GECU could detect the transactions. According to court documents, Allen knew no one at the credit union reviewed hidden transactions, which enabled her to move money in and out of accounts.

What's more, Allen and her family held multiple accounts, and she electronically marked these accounts as such. That meant those accounts would not be subject to review by any GECU employee, according to prosecutors. That allowed Allen to deposit and move large money transfers that would not be detected or reviewed.