NCUA Bans Two Former CU Employees Convicted of Fraud

The NCUA on Wednesday banned two former credit union employees convicted of fraud from ever participating in the affairs of any federally insured financial institution.

For taking more than $100,000 in cash kickbacks during a six-month $2.1 million wire fraud scheme while he worked as a former credit union ACH coordinator at the $872 million Financial Center First Credit Union (FCFCU) in Indianapolis, Jose A. Prado-Valero is currently serving a 33-month federal prison sentence in Terre Haute.

After he pleaded guilty to one felony count of financial institution fraud, he was sentenced in April. He also was ordered to pay $2,132,517 in restitution, according to court documents.

In 2019, Prado-Valero was approached by co-conspirators looking to launch a plan to defraud FCFCU and steal money from member accounts. The co-conspirators, who were not identified in court documents and were not credit union employees, promised to pay Padro-Valero kickbacks for his participation in the scheme.

He agreed to access member account information prior to providing personally identifiable information to his co-conspirators to ensure that there were sufficient funds in the targeted accounts to support the fraudulent transfers.

From Feb. 14 to Aug. 16, 2019, Prado-Valero and his co-conspirators transacted 34 fraudulent ACH transfers to themselves out of FCFCU member accounts, and Prado-Valero received more than $100,000 in cash kickbacks. Court documents did not indicate how many co-conspirators were involved in the scheme or whether they have been arrested and charged.

Tracy Thibodeau of Windsor, who worked as a branch manager at the $30.2 million Vermont VA Federal Credit Union (VVAFCU), was sentenced in March to time served following her guilty plea to a felony charge of credit union fraud. She was ordered to pay $136,036 in restitution.

Starting in April 2019 through February 2021, she used VVAFCU’s credit card processing software, and without authorization, opened and issued a credit card in her name, court documents showed.

She manipulated the processing software to grant herself privileges such as removing dollar limits on her credit card balances, excusing herself from late fees and interest penalties on overdue balances, and eliminating requirements that she make a minimum payment toward any unpaid balances, according to the indictment. Thibodeau also manipulated the credit union’s internal cardholder journal reports to conceal the fraud from her supervisors.

VVAFCU detected the fraud and fired her in April 2022.

The credit union was merged into the $402 million 802 Credit Union in Barre, Vt., last year.