VALDOSTA, Ga. — Two Valdosta top banking officials pleaded guilty to a multimillion-dollar bank loan scheme, according to the Department of Justice.
The former president and the former controller of Southern Pine Credit Union took plea deals, according to the DOJ Middle District of Georgia Office, with the controller pleading guilty to one count of bank fraud and one count of aggravated theft Thursday. Her 63-year-old co-defendant pleaded guilty to the same charges on Oct. 26.
Citing court documents, the president served Southern Pine Credit Union (SPCU) in Valdosta from 1990 through 2020, prosecutors said. The controller served in her role from Oct. 2011 through June 2020. Both were authorized to originate all types of loans, responsible for filing reports that had employee usernames and passwords for all credit union-related computers and software. SPCU's members are employees of the paper mill and their families.
Prosecutors said the president started her scheme in June 2003 when she created a share-secured loan in an SPCU account using the name and social security number of a member without their knowledge. She paid off the loan and rebooked it several times with additional advances and used the money to pay for a boat, a hunting club share, personal expenses and gifts to family members. She created a system where she would pay off a loan and repeat the process, securing other similar loans with another member's name without their knowledge, and would use fake credit transactions using the names and passwords of SPCU employees.
In total, the drafts needed to pay off the loan balances at each quarter grew to $4,112,870.63, excluding payments and interest, as of May 31, 2020.
The controller committed similar fraud, prosecutors said, starting her scheme in October 2011. The drafts needed to pay off the loan balances at each quarter grew to $1,233,201.77, excluding payments and interest, as of May 31, 2020. The former controller made $7,736.16 in legitimate payments to the loan balances.
The case was investigated by the FBI and the Federal Deposit Insurance Corporation (FDIC).
“As leaders of this credit union, the defendants knowingly put their members— local paper mill employees and their families— at great risk with their complex schemes to enrich themselves,” said U.S. Attorney Peter D. Leary in a news release.
Both women face a maximum of 30 years in prison for bank fraud and a $1 million fine. More years can be added to their sentence depending on the terms imposed on their other charges. They are not eligible for parole.
