LYNCHBURG, Va.—Two former credit union employees were sentenced here on the same day for crimes committed at two separate CUs.
Linda Sue Newcomb, 63, the former manager of the failed Lynrocten FCU here, has been sentenced by a federal judge to 10 years in prison for carrying out a fraud scheme that led to the institution’s collapse in 2013.
In handing down the sentence, the judge stated that Newcomb violated the public’s trust and placed hardships on account holders, the News & Advance reported.
Newcomb pleaded guilty in March, and via a plea agreement agreed to pay full restitution in the amount of loss in the case and pay no less than $500,000 by her sentencing date. The judge ruled for Newcomb to pay more than $10 million in restitution along with former head teller Teresa Humphries, who was sentenced in March to three years and four months in prison.
According to the indictment, Newcomb and Humphries carried out a scheme to embezzle money from credit union members by forging the names of account holders on fake loan documents. In order to make the loans look legitimate, the documents were drafted and Newcomb would approve them. Newcomb and Humphries would take false proceeds from the loans and put the money in their personal accounts or use it to pay off other false loans.
Newcomb and Humphries also engaged in a check kiting scheme involving accounts of at least three members. The duo, who were indicted in June of 2014, also used the accounts of family members as part of the scam, according to the FBI.
Meanwhile, Claudia Rawes, 67, the former manager of Central Health CU, has been sentenced to six years and six months in prison for embezzling nearly $2 million. Rawes pleaded guilty in February to stealing the funds from the credit union over a period of years in order support her gambling addiction.
"I didn't mean to hurt anybody," Rawes told the court. "I really thought I could win it back."
The crime was discovered after the credit union hired an investigator.