NEW HAVEN, Conn.–A former CU lending manager has pleaded guilty to embezzling more than $800,000.
Pamela Mallory, 42, of Enfield, Conn., waived her right to indictment and pleaded guilty to embezzling $840,000 from her employer, 360 Federal Credit Union, according to Deirdre M. Daly, United States Attorney for the District of Connecticut, and Patricia M. Ferrick, Special Agent in Charge of the New Haven Division of the Federal Bureau of Investigation.
According to court documents and statements made in court, while employee at the Windsor Locks, Conn.-based 360 Mallory used her access to loan files and authorized loans, including home equity lines of credit to open five different HELOCs in the name of a credit union member and increased the credit limit of those HELOCs on at least 15 occasions, all without the knowledge or consent of the credit union member. The crimes took place between from 2009 through 2016, authorities said.
Initially, authorities said Mallory perpetrated the scheme by opening subsequent HELOCs to pay off earlier, smaller HELOCs. Later in the scheme, rather than opening new HELOCs, she simply increased the credit limits on two of the fraudulent HELOCs to support her spending, the U.S. Attorney’s Office said.
“In order to evade detection, Mallory made minimum, interest-only payments on the HELOCs from her own checking account,” said a statement from the U.S. Attorney’s Office. “When 360 Federal Credit Union discovered the scheme in January 2016, the credit union member’s property, which is worth less than $150,000, supported two HELOCs, each with credit limits of $417,000, that Mallory had fully drawn down.”
Authorities said Mallory used the $840,378.28 from 360 Federal Credit Union to pay her own creditors.
Mallory pleaded guilty to one count of embezzlement by a credit union employee, a charge that carries a maximum term of imprisonment of 30 years. She is scheduled to be sentenced on August 17, 2016, and is released on a $100,000 bond.
Credit Union Issues Statement
Following the guilty plea, Robert L. Aresti, president and CEO of 360 FCU, issued a statement saying, "“We are disappointed and saddened by this breach of trust, but want to assure our members and the community that the 360 Federal Credit Union remains financially strong and expects to be able to recover all or most of the loss through insurance and restitution. The theft was an extremely complex and sophisticated scheme, carried out by an employee in a position of great responsibility and trust. Nevertheless, the system worked by identifying an irregularity and triggering an investigation. Everything we now know confirms that this was an isolated event by one person. Most important, we have put in place additional safeguards to prevent something like this from happening again.”