LOUISVILLE, Ky.–The former vice president of a credit union that serves police officers here who earlier pleaded guilty to a scheme to stealing more than $3 million has been sentenced to 11 years in prison.
Former Vice President Josephine M. Crowe pled guilty to fraud and aggravated identity theft that involved stealing cash from the credit union’s vault and teller drawers. In addition, Crowe admitted to transferring funds into accounts belonging to herself and some family members and making payments on unwitting members’ loans with credit union funds that did not belong to the members whose accounts were credited, according to the Louisville Courier Journal.
As CUToday.info first reported here, authorities announced in December of 2017 they had launched an investigation into events at Louisville Metro Police Officers Credit Union and then just weeks later, following news of what were described as “catastrophic losses,” NCUA placed it into conservatorship.
At the time LMPOCU had $28.7-million in assets and 3,564 members.
Complex Scheme
According to investigators, from 2013-17 the now 46-year-old Crowe engaged in a complex check-kiting scheme that involved issuing unauthorized checks from members’ accounts and then depositing them in other members’ accounts, all without their knowledge. She also issued checks to cover insufficient-fund notices on the original checks when she overdrew accounts, the Courier-Journal reported. More than 100 members eventually stepped forward to complain of unauthorized activity on their accounts.
In all, more than $675,000 in checks were returned for insufficient funds when the scheme was uncovered, according to a presentence memo written by Assistant U.S. Attorney Stephanie Zimdahl, the Courier Journal said, adding the government will take Crowe’s deposition Nov. 20 to find out why she took the money and what became of it.
“Even after the scheme was detected and she was suspended, Crowe took further steps to conceal her fraud, the government said, including remotely accessing the credit union’s processing system, making changes to the general ledger, and deleting files and information from the computer system,” the Courier Journal stated.
In total, 247 member accounts had to be written off for a loss to the NCUSIF of $3.895 million, the publication added.