NCUA Bans Seven Former Credit Union Employees, Including CEOs
One CEO, whose crimes led to a credit union’s collapse, serves less prison time than his original sentence.
Seven former credit union employees, including ex-CEOs, were banned from participating the affairs of a federally insured financial institution, the NCUA said Wednesday.
Ignacio Morales, the former president/CEO of the $7 million Borinquen Federal Credit Union was serving a 72-month prison term for fraud, embezzlement, money laundering, filing false income tax returns and possession of cocaine with intent to distribute. His crimes led to the 2011 collapse of the Philadelphia credit union
Although he was originally sentenced to 90 months, or 7 and a half years, in January 2013, changes in the federal government’s sentencing guidelines in 2014 for drug convictions, reduced Morales’ sentence to 72 months or six years
He withdrew more than half a million dollars from the credit union in an attempt to purchase 15 kilograms cocaine. Morales admitted in court that he intended to use his share of profits from the drugs to cover up his crimes and throw regulators off his trail.
Morales was released from prison on May 15, 2018, according to the Federal Bureau of Prisons. He is now on supervised release.
The former CEO was also ordered to pay $2.3 million in restitution to the NCUA and $7.3 million to the IRS.
Jennifer Mix, who was the president/CEO at the $4.4 million Hornell Erie Federal Union in Hornell, N.Y., for only nine months in 2016, allegedly falsified records and abused her position to assure a loan for herself in the amount that exceeded what the board of directors approved, according to the NCUA. In addition, Mix caused unauthorized payroll amounts to be paid to herself prior to the dates that they would have been paid, the NCUA alleged. Mix did not admit or deny to any wrongdoing. The credit union is inactive, according to the NCUA.
Christopher Hughes, a former employee of the $48 million Dixies Federal Credit Union in Darlington, S.C., allegedly stole $10,000 from the vault, according the NCUA. The federal agency’s prohibition order does not state when this alleged theft occurred. Hughes did not admit or deny the allegation. The order also does not state whether Hughes paid back the money he allegedly stole.
In October 2017, Shannon Smith, a former employee for the $228 million Appalachian Federal Credit Union in Gray, Tenn., was sentenced by a state judge for theft of more than $10,000.
Last February, Benjamin Severson, a former employee with the $769 million Marine Credit Union in LaCrosse, Wis., was sentenced by a state court judge to one count of misappropriation of identification information (to) obtain money.
Amy Fincher, a former employee for the $4.6 million Rheem Arkansas Federal Credit Union in Fort Smith, Ark., was sentenced for theft of property in August 2018 by an Arkansas state judge.
Joey Camp, a former employee for the $4.7 million Peoria Fire Fighters Credit Union in Peoria, Ill., was sentenced to one count of theft between $500 and less than $10,000 by a state judge.
The NCUA’s prohibition orders for Smith, Severson, Fincher and Camp do not report whether the former credit union employees served any prison time or whether they were ordered to pay restitution. Though the federal agency referred to the judgement documents for Smith, Severson, Fincher and Camp, those documents were not attached to the prohibition orders.