JOHNSON CITY, Tenn. – The former CEO of a credit union here has been sentenced to more than four years and prison and ordered to pay restitution after being found guilty of stealing more than $1 million.
Sherry Ann Allen, 49, the former CEO of Greater Eastern Credit Union, was sentenced to serve 51 months in federal prison following a June 2018 plea of guilty to theft by a credit union officer or employee and tax evasion. Upon her release from prison, Allen will be supervised by U.S. Probation for three years. She was also ordered to pay a total of $1,237,547.04 in restitution, according to the court.
In November 2017, the Johnson City Police Department (JCPD) contacted members of the Greater Eastern Credit Union management team after it received information regarding an abnormality in the payment to a vendor. According to a statement from the court, JCPD provided the details and credit union personnel conducted an internal review of the transaction, which showed that Allen had paid a vendor and purposely and personally processed a transaction in which $10,000 was transferred to an account that she controlled.
FBI, IRS Get Involved
During their review, credit union personnel discovered additional transactions Allen processed in which funds were deposited into other accounts she controlled, the court said. Allen was placed on indefinite suspension while the board ordered an accounting firm to conduct a fraud examination. The FBI and Internal Revenue Service Criminal Investigation also became involved.
The investigation revealed that Allen had embezzled $1,195,596 from 2011 to 2017 and had used some of the stolen money for her personal benefit, according to prosecutors.
“In the beginning, she used the stolen money to pay her credit cards and later purchased an Infiniti and Ford truck for personal use,” prosecutors said. “Allen and her husband also took a cruise and trips to Tucson, Arizona and Eastern Europe. Additionally, she purchased a timeshare in Orlando, Florida, a camper, clothes and jewelry.”
How Stolen Funds Were Also Used
In addition, prosecutors said Allen donated some of the stolen money to charitable causes, and took her church youth group on several trips, including missions to Ireland, Nicaragua, and Florida. She paid for Vacation Bible School items. She gave stolen money to people who needed groceries and purchased two vehicles for members of her church, prosecutors said.
Allen did not report the embezzled and misapplied money as income on her joint tax returns in tax years 2011, 2012, 2013, 2014 2015 and 2016. In doing so, she and her spouse, prepared and filed, or caused to be prepared and filed false and fraudulent tax returns, the court said.
Prosecutors said Allen was cooperative in the investigation and immediately confessed to the crime.