Embezzlement charges against a former credit union employee.
Federal prosecutors allege a former mailroom employee of the Jacksonville, Fla.-based Vystar Credit Union embezzled $5.4 million over 15 years.
Duane Allen Sikes is scheduled to be arraigned on 10 felony counts of mail fraud and five felony counts of embezzlement of credit union funds in U.S. District Court in Jacksonville Tuesday.
“Upon our discovery that a former employee had defrauded the company during his employment, VyStar immediately conducted a more comprehensive internal review, reported the matter to authorities and is cooperating fully with their investigation,” VyStar said in a prepared statement.
“Importantly, this isolated incident did not in any way compromise member personal information or accounts, and is immaterial to the company's financials. VyStar does not tolerate behavior that is contrary to our culture and high ethical values, and has taken immediate action to address the situation and even further enhance our internal processes.”
The 64-year-old Sikes of Jacksonville worked in Vystar's mailroom from 1994 to 2017. Part of his duties included using Vystar issued checks to buy postage for a Pitney Bowes postage meter that paid for the credit union's mail expenses.
Vystar issued checks every week to pay for the meter's postage. However, on every other week, Sikes allegedly used the credit union's checks to buy large amounts of postage stamps from the Jacksonville post office. He then shipped these stamps to a vendor, Ben Art Stamp Co., the wholesale division of Mystic Stamp Co. in Camden, N.Y. The vendor sold theses stamps and cut a check to Sikes for his portion of the sales proceeds, according to the indictment.
Between 2007 and 2017, Ben-Art Stamp Co. paid Sikes more than $3.6 million. However, federal prosecutors said in court documents that the former mailroom employee sold stamps to the vendor over 15 years and allegedly embezzled a total of $5.4 million from the $7.7 Billion Florida credit union.
After Sikes was arrested Sept. 4, he was released on a $100,000 bond. Federal prosecutors filed forfeiture documents against his properties.
Court documents do not reveal how Sikes spent the stolen credit union money.
Sikes' lawyer William Mallory Kent declined comment.
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