Former California CU Employee Gets 18 Months Home Confinement for $1M Theft

A California federal judge sentenced a former business loan processor, Indira Mohabir, Thursday to 18 months of home confinement for opening nearly $3 million in lines of credit for her boyfriend, causing more than $1 million in losses at a California credit union.

U.S. District Court Judge Andre Birotte Jr. in Los Angeles also sentenced Phillip Cook Thursday to six months in federal prison and 12 months of home confinement, according to the U.S. Attorney’s Office for the Central District of California. A hearing to determine restitution is scheduled for March. Cook pleaded guilty to one count of bank fraud in 2019.

Federal prosecutors asked the federal judge to impose a 57-month prison sentence for Mohabir because she still refuses to accept responsibility for her conduct, including refusing to acknowledge that she did anything wrong, or that she should bear any responsibility or face any consequences for the large fraud scheme that she perpetrated, all of which indicates a strong possibility of recidivism, according to a sentencing memo filed by prosecutors.

“The sentence should also send a strong warning to others that insider bank fraud is taken seriously and punished accordingly,” prosecutors wrote. “It should cause other bank insiders to think twice before they abuse their inside position for their own or others’ personal gain. All in all, a sentence of 57 months is sufficient but not greater than necessary to serve the sentencing goals.”

What’s more, prosecutors pointed out in text messages and emails that she sent to Cook in the months and years that followed her arrest in August 2016, she demonstrated that she would do it all again if she could.

“Defendant went to work at another bank after WFCU – Western Federal Credit Union, now the $3.5 billion Unify Financial Credit Union in Torrance – terminated her employment, and texts and emails show that she was again trying to abuse her inside position to open even more credit lines for Cook,” prosecutors said.

Mohabir’s attorney declined to comment when reached Friday by CU Times. Cook’s attorney also did not comment.

Following a three-day trial in December 2018, a Los Angeles jury found Mohabir guilty of 15 felony counts of conspiracy to commit insider fraud and financial institution fraud.

Through a dedicated hotline for business members, Mohabir met Cook in November 2014 and they quickly became involved in a romantic relationship. Cook lured the former credit union employee with flowers, promised to take her on exotic trips and mailed her gifts including a $50,000 check drawn on the credit lines that she earlier opened for him – a check that was intercepted at the credit union, according to trial evidence.

During their romantic discussions, interwoven with talk about how to open credit lines, Mohabir agreed to use her position to help Cook open these credit lines, prosecutors said.

According to testimony from her supervisors and a fraud investigator at the credit union, Mohabir opened lines of credit outside of her authority and without the necessary approvals from the credit union. Credit union records supported their testimony. Mohabir managed to open the credit lines by overriding and bypassing internal controls.

As part of the scheme, the former credit union employee sent Cook the credit union’s internal policies and procedures so the couple could discuss ways to circumvent them. She also offered to bypass required verification steps such as securing tax returns for loan applications Cook submitted.

In one instance, Mohabir got a $50,000 line of credit approved by lying to a senior executive that it had been approved by underwriters, according to court documents.

Nevertheless, because it was becoming increasingly difficult for Mohabir to get the lines approved through the normal underwriting process, she switched course in late December 2014 by opening lines directly from the credit union’s system through a loan program that the credit union had established for businesses customers called the Business Platinum Visa program.

Although the credit lines were capped at $50,000, Mohabir soon realized that nothing in the system prevented her from raising the limit to $100,000. Over the course of two weeks in January 2015, she opened more than $2.1 million of the $2.7 million in total credit lines that she opened for Cook. In just one day, Mohabir opened eight separate lines of credit worth $775,000, prosecutors said.

She concealed the lines of credit by leaving them off the weekly pipeline reports that she prepared for the business services department. No one at the credit union knew about the fraudulent lines of credit and no one approved the lines, according to federal prosecutors.

However, on Jan. 21, 2015, a credit union auditor/fraud investigator was reviewing a routine audit report and discovered the unauthorized lines of credit. The auditor froze the accounts and seized as much of the funds as possible, including intercepting the $50,000 check that was addressed to Mohabir from Cook.

The credit union immediately contacted the police and fired Mohabir.