Prosecutors Defer Bank Fraud Case of Former Credit Union Employee
Joshua Smith, who allegedly stole $48,000, signs up for a pretrial diversion program that may help him get a lighter sentence.
Federal prosecutors have agreed to defer prosecuting Joshua Smith, a former teller at a South Carolina branch of the $726 million Bayer Heritage Federal Credit Union who pleaded not guilty to bank fraud in U.S. District Court in Charleston, S.C., in April.
A federal indictment alleged that Smith stole $48,000 from the branch while he worked for the credit union, which is headquartered in Proctor, W. Va.
Court documents showed that Smith signed an agreement earlier this month to enroll in a pretrial diversion program for 18 months that will allow him to demonstrate “good conduct” by participating in either an intervention initiative, community service and/or education programs. If he successfully completes the pretrial diversion program and complies with other court-ordered conditions, Smith may qualify for a range of case outcomes, including a dismissal or a reduction in the charges or a more favorable recommendation at sentencing, according to the Department of Justice.
Prosecutors have agreed to defer prosecution until April 2025, court records showed.
“We have been made aware of Mr. Smith’s plea and the pretrial diversion program,” a Bayer Heritage spokesperson said in a prepared statement. “The safety and security of our members is of the utmost importance to us, and we are committed to continuing that safety and security.”
Smith’s attorney did not respond to CU Times‘ request for comment.
Smith allegedly began submitting fraudulent transaction receipts for members starting in July 2021, which enabled him to withdraw money from their accounts.
These alleged fraudulent transactions occurred when no member was present at the counter or drive-thru. Bayer Heritage’s business practice was to only conduct transactions when a member was present at the counter or drive-thru and to require a member’s signature on any transaction receipts to verify its legitimacy, the indictment showed.
Smith allegedly used phony withdrawal slips and then left the signature field blank or taped legitimate signatures from previous member transactions to receipts to make them appear legitimate.
He allegedly scanned the doctored and fraudulent transaction receipts into the Bayer Heritage computer system and withdrew money from member’s accounts, according to the indictment.
Over three months, Smith allegedly withdrew members’ funds.