Former CU CEO Changes Plea to Not Guilty on Embezzlement Charge

The former president/CEO of New Pilgrim Federal Credit Union originally pleaded guilty to a charge that he embezzled more than $260,000 from the Alabama financial cooperative, according to court documents filed in U.S. District Court in Birmingham.

And then, he changed his mind.

In a rare legal move, Phillip Brian Topping, 42, of Birmingham, changed his plea to not guilty on Sept. 22 after he signed a plea deal in August in which he agreed to plead guilty to one felony count of theft for embezzlement by a credit union employee, court filings showed. In exchange for his guilty plea, prosecutors agreed to recommend that Topping be given a sentence consistent with the low end of the United States Sentencing Guidelines range as determined by the court.

In August 2021, the $1.2 million NPFCU in Birmingham discovered that Topping moved the due date on his personal loan. After the board fired him, the credit union found its ATM was short by $4,120 and the teller drawer was short $600. The credit union also discovered that its share deletion account posted a credit balance of $191,680, which was unusual, according to court documents.

Unable to resolve this credit issue, NPFCU launched an audit, which revealed Topping allegedly stole $268,000 since 2016, federal prosecutors wrote in court filings.

The audit uncovered that Topping allegedly pilfered $150,400 in cash from the credit union’s ATM located in the lobby of the New Pilgrim Baptist Church, which houses NPFCU’s office.

To conceal this crime, Topping debited members’ accounts – usually accounts associated with church-sponsored groups or clubs – and then credited the ATM’s general ledger with these monies to account for the missing funds. Topping, who was the only employee who serviced and replenished the ATM’s cash, also created phony expenses of various items to different general ledger accounts to cover shortfalls, but there was no record that the items expensed were ever purchased, according to federal prosecutors.

Topping also allegedly lifted $112,800 from the credit union’s teller cash drawer. He covered it up by debiting the funds from a share deletion account and then credited the funds to the teller cash drawer, according to prosecutors.

Adding the $5,000 audit cost, Topping’s crime caused a total loss of $273,000, court documents showed.

CUNA Mutual Group paid a $250,000 employee misconduct loss claim to NPFCU last April, which was the maximum amount of the credit union’s insurance coverage.

Topping remains free on a $5,000 unsecured bond.