Stacey Shaw Sentenced to Federal Prison for $2 Million Embezzlement 

Former credit union CEO Stacey Shaw, 48, of Salem, Ohio was sentenced Wednesday to four years and three months in federal prison for a $2 million embezzlement scheme that led to the 2020 liquidation of a Beaver, Pa.-based credit union founded by her grandfather.

United States District Judge Marilyn J. Horan in Pittsburgh also sentenced Shaw to three years of supervised release, which includes 12 months of home confinement, according to court records.

Judge Horan ordered the former executive to pay restitution of $2,618,832, which includes $1,491,307 to the NCUA, $608,130 to CUMIS Insurance Society and $519,394 to the IRS for failing to report the taxable income from Shaw’s ill-gotten gains.

Shaw began working at the $7.6 million IBEW Local Union 712 Federal Credit Union in December 2004. Her mother, Jill Shaw, served as the credit union president/CEO. During the fourth quarter of 2016, Stacey Shaw became CEO, according to the credit union’s profile report filed with the NCUA.

Shaw’s attorney, Samir Sarna in Pittsburgh, noted in his sentencing memo to Judge Horan that his client was not qualified to be president/CEO.

“Shaw did not possess a college degree and had not served in a position at or near the level of CEO at any other credit union,” Sarna wrote. “While Ms. Shaw does not blame the credit union for her conduct, it should also be noted that had the credit union’s board exercised proper oversight over Ms. Shaw, the damages suffered by the credit union could have been mitigated.”

Shaw’s grandfather, who opened the credit union in 1964 and served as its first CEO, and her mother, both held college degrees, according to Sarna.

Just a few months after she became CEO at the end of 2016, Shaw opened credit cards issued by the credit union in May 2017 and made $2,099,437 in charges and cash advances through February 2020 when she was fired, according to federal prosecutors who called her embezzlement shocking. With one credit card, Shaw raised the credit limit approximately 89 times to a credit limit in excess of $1.7 million and then lowered the mandatory monthly payment to $.50 (fifty cents).

She blew the funds on largely frivolous purchases from merchants such as Apple iTunes; Wine and Spirits; Weischedel Florist; Netflix; Magical Nails; Nintendo; Amazon Prime Video; Tractor Supply Company; Marriott Hotels; Hilton Hotels; Omaha Steaks; Container Store; Barnes and Noble; Fancy Plants and Bloomers; Castle Toys and Games; as well as pet store purchases and numerous restaurant purchases.

“In less than three years, the defendant stole approximately $2.1 million with her credit cards, but there is nothing of significant value for the United States to recoup,” federal prosecutors wrote in their memo to Judge Horan. “The funds are simply gone. Furthermore, and importantly, this criminal behavior only stopped because the Defendant got caught. In short, the defendant embarked on a long course of embezzlement and fraud that stretched nearly three years. This was not aberrant behavior or a one-time mistake. It was premeditated, systematic criminal activity.”

Shaw pleaded guilty to one count of embezzlement and to one misdemeanor count of failing to file a federal tax return last April.

Shaw’s attorney asked for a sentence of five years of home confinement to be followed by six years of supervised release in part because she is the sole provider of two daughters with significant medical and behavioral needs. Sarna also said Shaw understands the seriousness of her crime and has accepted responsibility for it, noting that a home confinement sentence would allow her to earn money to pay the restitution. Sarna also said that Shaw has “expressed willingness” to part with a single-family home in New Brighton, Pa., worth an estimated $71,000, according to Realtor.com. However, there have been no forfeiture documents filed by federal prosecutors to obtain a court order to seize possession of that property.

In May 2020, the $26.4 million West Penn P&P Federal Credit Union in Beaver, Pa., assumed IBEW Local Union 712 FCU’s assets, member shares and loans, the NCUA said.