Former Longtime CU Executive Sentenced for $376,000 Theft

A federal judge sentenced Merrideth Christina McMillian, a former, longtime credit union executive, to two years and nine months in prison for stealing more than $300,000 from a Mississippi credit union. She used her grandmother’s estate to commit the theft.

U.S. District Judge Halil Ozerden in Gulfport also ordered McMillian, 46, of Vancleave, to pay $376,152 in restitution and serve three years of supervised release following her prison sentence.

The former vice president of operations for the $221 million Singing River Federal Credit Union in Moss Point took out fraudulent loans against her grandmother’s estate, and in the names of her husband, father, a friend and members from September 2015 to September 2018, according to the U.S. Attorney’s office for the Southern District of Mississippi.

During a Thursday sentencing hearing, SRFCU President/CEO Jimmy Smith said after an August 2018 audit uncovered McMillian’s fraud, the staff was tremendously shocked, and became distraught that she would commit such crimes and betray their trust.

“To this very day, the effects of that betrayal resonate deeply,” Smith said in court.

He noted employees logged 636 hours investigating and auditing the fraud scheme that led to her termination, prosecution and conviction. What’s more, Smith said the credit union’s reputation has been greatly tarnished, and that the staff and board members have spent a lot of time assuring members their money is safe.

“Without knowing the intricate details of the banking industry, one could assume that SRFCU failed in our due diligence by not discovering these crimes sooner. However, this is far from the truth!” Smith said. “In Mrs. McMillian’s role as the VP of operations, she supervised the lending department. In our investigation, among other things discovered, we learned that she schemed to commit her crimes by manipulating the loan process. She made fraudulent system changes that led loan officers to believe funds were available to borrow against. Furthermore, she clearly used her influence as an officer to manipulate those staff under her supervision.”

Although the credit union determined no other employee knowingly participated in the crimes committed by McMillian, the credit union fired two employees who processed loans for her without adhering to procedural guidelines, Smith said.

After obtaining a legitimate loan from SRFCU using her grandmother’s estate as collateral, McMillian accessed the credit union’s computer system to release the collateral that secured the loan. She then borrowed against the estate on five different occasions by manipulating the computer system, the investigation uncovered.

Additionally, McMillian took out unsecured loans in members’ names without their consent. She also used a friend’s name and a member’s money market account information to take out another fake loan for nearly $50,000. She used those funds to pay back the phony loans taken against her grandmother’s estate. McMillian prevented loan statements from reaching her friend.

She also took out loans in the names of her husband and father without their authorization.

Before joining SRFCU in June 2014, McMillian worked at the $334 million Navigator Credit Union in Pascagoula, Miss., for 23 years. She started there in 1991 as a part-time teller and served as a loan supervisor and consumer loan manager, and became chief information officer in 2004.

In January 2014, after claiming she was forced to resign, she filed a complaint with the Equal Employment Opportunity Commission alleging sex discrimination and retaliation against Navigator. Following an EEOC investigation that did not find violations, she filed a federal lawsuit in February 2015, making the same claims, which the credit union repeatedly denied.

However, court documents show that in December 2013, Navigator’s supervisory committee questioned McMillian about her transferring funds from her grandmother’s account, allegedly for unauthorized purposes.

Though McMillian acknowledged she transferred the funds from her grandmother’s account, she also said that her grandmother and brother drafted letters to the supervisory committee to explain how the funds were spent. But Navigator denied that the letters “sufficiently explained how such funds were spent,” according to court documents.

McMillian alleged the credit union retaliated by informing the state’s department of human services and reported potential elder abuse over her grandmother’s account. According to court documents, McMillian said DHS conducted an investigation and that the case was closed in her favor.

Navigator acknowledged DHS was contacted about potential elder abuse, but it could not vouch for the veracity of McMillian’s claim that the case had been closed in her favor.

In November 2015, McMillian and the credit union reached a confidential settlement, court records showed.