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Former branch manager Johnnie Earl Harrell will begin his four-year prison sentence in January for embezzling more than $631,000 from members' retirement accounts.
U.S. District Court Judge Louise Wood Flanagan in New Bern, N.C., who rendered Harrell's sentence on Thursday, also ordered him to serve five years of supervised release following his prison term.
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Judge Flanagan delayed imposition of restitution to resolve outstanding issues regarding the amount owed. She is expected to decide a restitution order on Jan. 14, the U.S. Attorney's Office for the Eastern District of North Carolina in Raleigh said.
"Johnnie deeply regrets his actions," Harrell's lawyer, Lawrence J. Cameron in Raleigh, said. "We are grateful that Judge Flanagan considered all of the facts and circumstances in this case and handed down a fair and appropriate sentence."
In June 2020 Harrell, 49, pleaded guilty to embezzlement.
While working at the branch in Zebulon from 2008 to 2019, he convinced members to roll over their retirement accounts into annuities, but he never purchased the annuities and stole the funds for his personal use, federal prosecutors said.
Harrell managed to conceal his fraud for 11 years by preparing fake annuity account statements that were periodically presented to members, prosecutors said. They did not say how many members were affected by the fraud or how Harrell spent the members' funds.
In October 2016, the $97.7 million Welcome Federal Credit Union in Morrisville, N.C. purchased the branch from the $496 million Members Heritage Credit Union in Lexington, Ky. After Welcome FCU became aware of Harrell's fraud in August 2020, he was fired.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
