Former Calif. CU Accounting Manager Pleads Guilty to Fraud & Embezzlement

After a change of plea hearing held in U.S. District Court in San Francisco last week, Stephanie Simontacchi, a former accounting manager for a California credit union and a former assistant controller for a local hotel, will be sentenced in June.

She pleaded guilty to one felony count of bank fraud, one felony count of misapplication and embezzlement of credit union funds, and one felony count of tax evasion, according to court documents. An indictment returned by a federal grand jury last year originally charged Simontacchi with seven counts of bank fraud, seven counts of misapplication and embezzlement of credit union funds, and four counts of tax evasion. Simontacchi initially pleaded not guilty to those charges.

Although a plea agreement between federal prosecutors and Simontacchi is listed on the federal docket, its online accessibility has been blocked to the public and the media.

According to the indictment, Simontacchi of Petaluma, Calif., embezzled more than $437,000 from the $7.4 billion Redwood Credit Union starting in April 2016 through April 2019.

RCU said it discovered the fraud in 2019 and promptly reported it to police. No losses were incurred by RCU members because of the fraudulent activity and the credit union said it further strengthened its systems and processes to prevent future incidents of this nature.

Before joining the Santa Rosa-based credit union, Simontacchi worked as a bookkeeper and assistant controller with Cavallo Point Lodge, a hotel near Sausalito, Calif., from December 2009 through April 2016, when she also embezzled $384,363, according to federal prosecutors.

At RCU, Simontacchi’s responsibilities included processing voided official checks (also known as cashier’s checks) and communicating with the credit union’s official check vendor regarding issues pertaining to the funding and voiding of these checks. She also had access to checks intended for and made payable to RCU that were sent to the accounting department for processing, including reimbursement checks from the official check vendor and reimbursement checks from the United States Treasury Department and State of California.

The indictment alleged that Simontacchi embezzled some of these checks, as well as official checks that had been returned to RCU by members and were supposed to have been voided. Instead, the former credit union employee deposited these checks into her personal bank accounts. Court documents showed Simontacchi held 12 different accounts at big banks and one account at RCU, which included a checking and HELOC account.

At the Cavallo Point Lodge, Simontacchi had access to her employer’s accounting records and accounting systems, and had signatory authority over bank accounts, which allowed her to create and sign checks from the hotel’s bank accounts to pay the company’s bills.

The indictment showed that Simontacchi embezzled funds from her employer by stealing accounts receivable checks that had been sent to Cavallo Point Lodge from third parties and deposited those checks into her personal bank accounts. She also allegedly embezzled accounts payable checks that were drawn from Cavallo Point Lodge’s bank accounts and made payable to third-party vendors. Instead of sending these checks to the third parties, Simontacchi deposited them in her own bank accounts, according to federal prosecutors.

She used the embezzled funds for personal expenses, including payments on her HELOC, court documents showed.

Simontacchi is currently free on bond. Her lawyer did not respond to CU Times‘ request for comment.