LOUISVILLE, Ky.–A former vice president at a credit union that served the Louisville Police Department has pleaded guilty to stealing more than $3 million over four years.
According to the Justice Department, Josephine M. Crowe, 46, pleaded guilty to one count of financial institution fraud and one count of aggravated identity theft and now faces a sentence of between two and 32 years in prison followed by three years of supervised release. In addition, she faces a fine of up to $1.25 million and must pay restitution to NCUA.
As CUToday.info reported here, Louisville Metro Police Credit Union was placed into conservatorship in late 2017 following an investigation by the Louisville Police Department of its own credit union. The conservatorship was followed by lawsuits by members who alleged they were the victims of a scheme involving fake loans and misappropriated funds.
At the time of the conservatorship, the Louisville Courier-Journal quoted an attorney as saying NCUA's Director of Special Actions Mark Cantor had told him records "do not add up" and that the agency was finding "jaw-dropping stuff."
In mid-2018, LMPCU was liquidated and it was merged into Commonwealth Credit Union in Frankfort, Ky.
How Scheme Worked
In a new statement from the U.S. Attorney’s Office, the fraud at the CU took place between January 2013 and ran through November 2017. During that time Crowe stole cash from teller drawers and the vault at Louisville Metro Police Officers Credit Union, and told employees and members to withdraw cash from an ATM and give her the money for "credit union operating needs," according to the statement.
In addition, the indictment states Crowe issued checks for made-up loans, telling the recipients to cash them and return the funds to her so she could deposit the money in the credit union's cash drawers.
The U.S. Attorney said that in September 2016, Crowe made up a $100,000 loan in a member's name without their consent and withdrew the funds.