SHREVEPORT, La. – Helen Godfrey-Smith, 72, the former CEO of Shreveport FCU who was well-known in credit unions, especially for her work with the African-American Credit Union Coalition and in Africa, has pleaded guilty to charges related to making and using a false document while she was leading the credit union.
A bill of information charging Godfrey-Smith was filed Nov. 15. She made her first court appearance on Dec. 6 and signed a plea agreement with the government. However, U.S. District Judge Elizabeth E. Foote said the court could not accept the guilty plea because Godfrey-Smith could not admit her guilt. Her attorneys asked for more time to discuss the matter and for the hearing to be continued, according to KTBS.
When Godfrey-Smith returned to court, Foote accepted the plea after reviewing the facts of the case and thorough questioning of Godfrey-Smith. She remains free on a $25,000 bond, according to the news outlet.
Godfrey-Smith was employed by the Shreveport Federal Credit Union (SFCU) from 1983 to 2017, where she was CEO for most of that term.
Misleading TARP
“In October 2016, the SFCU, through Godfrey-Smith, entered into an agreement with the United States Department of the Treasury to buy back certain securities that were part of the Department’s Troubled Asset Relief Program (TARP),” KTBS reported. “As part of that process, on Dec. 27, 2016, Godfrey-Smith signed and submitted to the United States Department of the Treasury an Officer’s Certificate which certified that all conditions precedent to the closing had been satisfied.
“In reality, SFCU had not met all conditions precedent to closing and had suffered a material adverse effect. Unknown to the treasury and the NCUA, SFCU was in a financial crisis,” the report continued. “From 2015 through 2017, another individual who was the SFCU chief financial officer had been falsifying call reports to the NCUA which included millions of dollars in fictitious fee income.”
In addition, prosecutors also alleged the credit union’s CFO was creating fictitious entries in the banks records to support the false call reports.
“This created the illusion that SFCU was profitable when, in fact, the bank was failing,” KTBS noted. “In addition, that person embezzled about $1.5 million from the credit union.
Aware of ‘Deficiencies’
According to prosecutors, by the time Godfrey-Smith signed the officer's statement she had become aware of deficiencies at the credit union.
“Specifically, she had recently investigated and discovered that there were millions of dollars of fictitious entries on SFCU's general ledger, and the credit union's books were not balanced,” KTBS stated.
“However, Godfrey-Smith failed to disclose this information to the treasury and signed the false officer’s statement. In the spring of 2017, the institution failed and it was taken over by regulators from the NCUA and placed into a conservatorship.”
An investigation by the NCUA revealed that SFCU had amassed in excess of $10 million in losses by December 2016. As CUToday.info reported here, Shreveport FCU was eventually liquidated by NCUA with its membership and most shares and loans assumed by Red River Employees FCU in Texarkana, Texas.
Godfrey-Smith faces a sentence of up to five years in prison, three years of supervised release, and a fine of up to $250,000. Sentencing is set for April 5.