Former Connecticut Credit Union CEO Sentenced for Embezzlement

A Connecticut federal judge on Tuesday sentenced Tara Kewalis, who began embezzling a credit union’s funds just three months after she became CEO, to 21 months in prison.

Kewalis, 51, of Beacon Falls, pleaded guilty in December to stealing $254,532 from Skyline Financial Federal Credit Union in Waterbury. Her detailed and sophisticated embezzlement scheme, which began in December 2021, enabled Kewalis to conceal her crime until March 2021, when she was fired.

Prosecutors were seeking a prison sentence of 33 months to 41 months because Kewalis was using drugs and lied about it several times to authorities, violating the conditions of her release while she was waiting to be sentenced. In July, U.S. District Court Janet C. Hall in New Haven revoked Kewalis’ release and she was taken into custody.

“The Government asserts that the Defendant’s numerous violations show a lack of respect for the law, a pattern of disrespect to the Probation Officer and to the Court, and demonstrate a level of continued deceitful behavior that tends to undermine any assertion by the Defendant that she appreciates the severity of her actions which led to the underlying fraud offense or that she is truly remorseful for her criminal actions,” prosecutors wrote in their memo to Judge Hall.

During Tuesday’s sentencing hearing, Kewalis accepted responsibility for her actions, court records showed.

“Mrs. Kewalis’ continued drug use, while in violation of her conditions of release, is not occurring in a vacuum. It is occurring at a time when she is confronting the single most destructive event in her life – this criminal case – and attempting to deal with an [addiction] which she has heretofore never addressed,” Kewalis’ attorney wrote in a memo to the judge. “To be battling both at the same time cannot be easy. Nor is it an excuse for her actions, but it does provide context for her inability to remain sober pending sentencing. The 36 days of inpatient treatment she completed demonstrate her ability and desire to confront her addiction head on. However, being placed back in the same environment after inpatient treatment, and limbo pending sentencing, has been too much for Mrs. Kewalis to overcome at this time.”

Although the former executive has paid restitution of $254,532, she may be required to pay additional restitution to reimburse expenses incurred by the credit union during the investigation and prosecution, prosecutors said.

According to court documents, Kewalis diverted credit union funds to various accounts held in her name, including her Christmas Club and Vacation Club accounts, using the internal accounting system to charge those stolen funds against Skyline Financial’s group health insurance and other employee benefits. Dividing the stolen funds among a number of accounts helped to camouflage her theft, prosecutors said.

Kewalis also booked the charges of stolen funds against the credit union’s general ledger as various expenses that she knew were for Skyline Financial’s operations such as ATM settlements, insurance payments and the purchase of COVID-19 cleaning supplies, court documents showed.

To cover her credit card payments on numerous accounts, she transferred funds from Skyline’s general ledger, making sure she kept the cards off the delinquency list so that any high credit card balances would not be detected by the credit union’s board, prosecutors said.