Former CU Assistant Manager Faces Sentencing for Fraudulent Loans

In 2015, Cynthia Feazell jeopardized her 19-year credit union career, her reputation and her freedom to buy a mobile home.

The former loan officer and assistant manager of the $27.5 million Valex Federal Credit Union will be sentenced in December after pleading guilty on Sept. 10 to authorizing fraudulent loans that caused more than $240,000 in losses for the Pineville, La.-based cooperative, according to court documents.

Feazell, 48, of Montgomery, La., worked at the credit union from 1997 to 2016.

In 2015, federal prosecutors said Feazell decided she wanted to buy a mobile home. But she knew she would not qualify for a loan from the credit union because she was already paying for three auto loans.

To make it appear that she had a lower debt-to-income ratio to help her qualify for the loan, Feazell transferred the vehicle loans in her mother’s name in November 2015. The car loans amounted to $99,150, according to court documents.

But before she transferred those loans to her mother, Feazell, on Oct. 9, 2015, also approved a $38,000 auto loan, a $37,000 equipment loan, a $35,795 boat loan and a second boat loan for $38,000 for her ex-husband. She also knew he did not meet Valex FCU’s credit requirements, federal prosecutors said.

Feazell falsified documents to secure the loans.

In another case, two women who were part of an auto-fraud ring that victimized the $130 million Magnolia Federal Credit Union in Jackson, Miss., were sentenced.

U.S. District Judge Tom S. Lee in Jackson, sentenced Shakedra Verleece Smith of Nashville, Tenn. and Sheri Youse of Birmingham, Ala. last week to 60 months probation with 6 months of home confinement. Smith was ordered to pay $40,000 in restitution and Youse was ordered to pay $55,000 in restitution.

They were part of a seven-person auto fraud ring that used fake Social Security numbers and phony employment information to apply for car loans at Magnolia FCU from March 2017 to October 2018. One of the persons in the fraud ring answered a phone number in case the credit union called to verify their bogus employment.

The auto loan checks were mailed to fictitious auto loan dealerships in different states.

The fraudsters applied for and received $234,467 in car loans.

Another fraud ring member was sentenced last month to 18 months in prison and was ordered to pay $49,476 in restitution. Four remaining fraud ring members await sentencing.