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Tuesday, January 29, 2013

Hayden woman indicted by federal grand jury in $202,994 bank embezzlement case in Alabama

A Hayden woman was indicted today by a federal grand jury on a charge that she embezzled money from the Warrior bank where she worked, federal authorities announced. The indictment seeks to have her forfeit $202,994 as proceeds of illegal activity.
The one-count indictment filed in U.S. District Court in Birmingham charges Frances Duckworth, 51, with embezzling from Superior Bank and its successor banks between November 2009 and August 2012, according to a joint statement from U.S. Attorney Joyce White Vance and U.S. Secret Service Special Agent in Charge Roy Sexton.

Duckworth worked as head teller at the Warrior bank branch during that time, according to the statement. The bank is now Cadence Bank.

The Secret Service investigated the case. Assistant U.S. Attorney Henry Cornelius is prosecuting the case.
A Hayden woman has been sentenced to more than two years in prison for embezzling money from the bank where she worked.
Federal authorities say 51-year-old Frances Duckworth was sentenced Wednesday to serve 27 months in prison. Duckworth pleaded guilty in March to embezzling money from the Warrior bank where she worked between November 2009 and August 2012.

Authorities say Duckworth must also forfeit $202,994 to the government as proceeds of illegal activity and must pay the same amount in restitution to the bank. She will also be on supervised release for five years after her release.

Former bank teller indicted on embezzlement charge in Virginia

A grand jury has indicted Vickie Lynn Greer Parker on a charge of embezzling more than $200 from Grundy National Bank.

She is the wife of longtime Washington County Treasurer Fred W. Parker and worked at the bank’s Abingdon branch until May 2012, court documents state.

"I’m hurt and I’m embarrassed,” Fred Parker, the county’s tax collector for the last 25 years, said of the charge in a telephone interview Monday.

He said his wife was a teller at the branch for about three or four years.

Vickie Parker did not return a request for comment.

Documents filed in Washington County Circuit Court offer scant details about the single embezzlement charge, which carries as much as 20 years in prison.

The indictment states only that she took money around May 2, 2012. That’s about the time she left the job, according to the bail determination checklist filled out by a magistrate.

A grand jury indicted Vickie Parker on Jan. 22 and she was charged two days later, court documents show.

In the bail checklist, Magistrate Mary Johanna Hanzlik wrote that Vickie Parker has no financial resources from her former bank job and is not currently employed, but that her treasurer husband makes $90,000 annually.

She was released on a $3,500 unsecured bond, court records show.

An official at Grundy National Bank had little to say about the investigation.

“That’s an ongoing thing and we’re not allowed to talk about it at this time,” said a man who answered the phone at the Abingdon branch. He did not give his name.

Fred Parker said he hopes the truth will come out in court.

“All we can do is let the process work itself out,” he said.

Thursday, January 24, 2013

Hyde Park bank teller gets prison for embezzlement scheme in Ohio

A Milford woman who worked as a teller for the U.S. Bank branch office in Hyde Park received a 27-month prison sentence for her conducting an embezzlement scheme.
Kimberly Ferguson, 53, of Milford, pleaded guilty in October to one count of bank fraud, which involved embezzling $911,000 from the bank. According to a press release from U.S. Attorney Carter Stewart's office, she had worked for the bank for 33 years. The scheme took place from 1997 to 2012, a time when she worked as a vault teller. The U.S. Attorney's reported that she created fraudulent "cash in transit" slips to disguise the theft.
"And bear in mind, this did not involve electronic transfers or checks,” Assistant U.S. Attorney Tim Mangan wrote in a sentencing memorandum filed with the court before sentencing. “The stolen funds consisted of cash that the defendant physically carried out of the bank.”
Bank officials eventually were alerted to the scheme when they found 38 or more transit slips per month at the branch.
Ferguson has been ordered to pay restitution.

Kimberly Ferguson, 53, of Milford, Ohio, was sentenced in U.S .District Court to 27 months in prison for embezzling $911,000 from the bank where she worked as a vault teller. She was also ordered to pay restitution.
Carter M. Stewart, United States Attorney for the Southern District of Ohio, and Edward J. Hanko, Special Agent in Charge, Federal Bureau of Investigation (FBI), announced the sentence imposed today by Senior U.S. District Judge Herman J. Weber.
Ferguson was an employee of U.S. Bank for approximately 33 years, primarily at the Hyde Park branch. She used her position as the vault teller at the branch to embezzle thousands of dollars from the bank for her personal benefit and created fraudulent “cash in transit” slips to disguise the scheme.
In total, from 1997 through February 2012, Ferguson embezzled $911,000 in funds from the federally insured bank. On average, this translates to stealing more than $60,000 in cash per year for 15 years. “And bear in mind, this did not involve electronic transfers or checks,” Assistant U.S. Attorney Tim Mangan wrote in a sentencing memorandum filed with the court before sentencing. “The stolen funds consisted of cash that the defendant physically carried out of the bank.”
The scheme was ultimately detected when bank officials noticed that the defendant’s branch had as many as 38 more transits slips per month than an average branch. Ferguson pleaded guilty on October 17, 2012, to one count of bank fraud.
U.S. Attorney Stewart commended the investigation by the FBI and Assistant U.S. Attorney Mangan, who represented the United States in the case.

Saturday, January 19, 2013

Former Credit Union Employee Pleads to Embezzlement in Massachusetts

An Adams woman and former credit union employee was convicted today of embezzlement and making false entries into the books of the credit union.
Patricia Piscioneri, 67, pleaded guilty before U.S. District Judge Michael A. Ponsor to a 30-count indictment charging her with embezzlement of funds by a credit union employee and false entries.

While employed as the manager of the former Adams Municipal Employees Federal Credit Union (AMEFCU), Piscioneri embezzled credit union funds by creating fraudulent loan accounts in the names of credit union members and depositing the proceeds of these fraudulent loans into her own account(s), her husband’s account(s), or other family members’ account(s), or used the proceeds to pay off previously obtained fraudulent loans. In an attempt to avoid detection, Piscioneri created fraudulent loan documentation, such as loan applications and promissory notes, and forged signatures on the fraudulent loan documentation. Additionally, Piscioneri created false entries in the AMEFCU accounting system and advanced the payment due dates of the fraudulent loans.

Sentencing is scheduled for April 25, 2013. Piscioneri faces up to 30 years in prison, to be followed by five years of supervised release, and a $1 million fine.

United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Michelle L. Dineen Jerrett of Ortiz’s Health Care Fraud Unit.

Sole employee sentenced in credit union embezzlement in Michigan

An Ohio woman who authorities say embezzled $2.1 million from a small credit union in Michigan has been sentenced to at least 45 months in prison.
Sharon Broadway of Toledo was in court Thursday in Monroe to learn her punishment, which is up to 20 years in prison. She earlier pleaded guilty.
A judge also ordered her to pay restitution.
Authorities say she stole money for more than 20 years as the only employee at United Catholic Credit Union in Temperance, near the Ohio border. The credit union was closed in August when problems were detected. Because of insurance, no depositor lost money.

Thursday, January 17, 2013

Insider Fraud: What to Monitor


Two recently resolved insider fraud schemes at banking institutions in Ohio and New York highlight the unique challenges organizations face when it comes to detecting crimes by trusted employees.
On Jan. 10, a district court in Ohio sentenced Zrino Jukic of Cleveland to 37 months in prison and ordered him to pay nearly $1.7 million in restitution for a loan fraud and money laundering scheme that involved a banking officer and contributed to the April 2010 collapse of St. Paul Croatian Federal Credit Union. Jukic had previously pleaded guilty to charges stemming from the scheme. The scheme was just one of many the credit union's former chief operating officer, Anthony Raguz, helped to facilitate before he finally was caught, investigators say.
And on Jan. 2, in a district court in New York, a former bank teller and a former branch manager of Chemung Canal Trust Company Bank pleaded guilty to bank embezzlement charges that cost the bank at least $325,000 in a scheme that took nearly seven years to detect.
Both cases involved trusted employees with access to funds and authority to approve transactions - a dangerous combination, says Randy Trzeciak, the technical team lead of insider threat research for the CERT Program, part of the Software Engineering Institute at Carnegie Mellon University.
According to CERT's most recent insider threat research, studies of cases investigated by the Secret Service reveal that more than 50 percent of insider schemes involve employees in trusted positions, such as managers. And these crimes tend to go on under the radar, over extended periods of time, proving especially difficult to detect.
"These are usually trusted individuals in an organization," Trzeciak says. "Organizations struggle with implementing controls that are effective without adversely affecting employees' ability to do their jobs."
Organizations can implement automated or technical controls to restrict or limit access for certain individuals. But because most of these trusted individuals have logins and passwords to enter certain systems that manage those controls, they can override the technical measures put in place to detect insider schemes.
"Defense in depth is the recommendation," Trzeciak says. "That includes IT controls and manual controls, like an audit process, to pick up on suspicious activity."

Latest Cases

In the Ohio case, Jukic was a co-owner of a small investment firm, the Zlato Group, along with Raguz, who also served as the defunct St. Paul Croatian Federal Credit Union's chief operating officer. Jukic defrauded the credit union by providing false information in connection with approximately 11 loan applications, according to court records. The proceeds from the bad loans allowed Jukic and Raguz to invest in certain business ventures through their company.
Authorities say Jukic laundered the money by transferring fraudulently obtained funds from a Zlato Group bank account to his own bank account to conceal the crime.
In November of 2012, Raguz was sentenced to 14 years in prison and ordered to pay more than $72.5 million in restitution for the role he played in the scheme with Jukic and others. Raguz' loan fraud schemes spanned 10 years and involved 1,000 fraudulent loans totaling more than $70 million to more than 300 account holders. He also accepted more than $1 million worth of bribes, kickbacks and gifts in exchange for the fraudulent loans he issued, investigators say.
In the end, Raguz' schemes led to one of the largest credit union failures in U.S. history, federal authorities say.
In the New York case, Megan Horton, a former branch manager, and Gwenn Gooding, a former head teller, pleaded guilty to embezzling $300,000 from Chemung Canal Trust Company Bank. A third conspirator and former teller of the bank, Shannon Moore, in December pleaded guilty to similar charges linked to her embezzlement of $25,000.
The scheme, which began in December 2004, wasn't uncovered until September 2011 when it was revealed by an audit related to disaster recovery efforts.
Horton, Gooding and Moore now each face maximum sentences of up to 30 years in prison and fines of up to $1 million.

Stronger Detection Needed

Schemes such as these are challenging to detect because the perpetrators don't have behaviors that raise flags, Trzeciak says.
"The amount of time the person is in the position before they commit fraud, on average, is five years, based on research from the Secret Service," he says. "That allows the individuals to develop some form of trust," so their actions aren't questioned, even when they should be.
Although the investment can be cost-prohibitive for some organizations, Trzeciak recommends non-predictable auditing practices. "It is a challenge, and it can be costly to implement some of that unpredictability," he says. "But it's best if you can put an auditing process in place that not everyone knows. The thresholds, for instance, are not known by everyone in the organization."
Other basic steps that all organizations, including financial institutions, should take, Trzeciak says, include:
  • Invest in data loss prevention tools. If organizations can identify in their systems what their critical assets are, then they can tag those assets and monitor them, he says. So, when those assets leave the network, organizations have technology in place that sends a notification.
  • Have technical controls and manual reviews to "check" the checker. "Improve the process you use to audit and review those people involved in the fraud controls themselves," he says. Monitor access to fraud detection systems as well as setting changes.
  • Monitor for fraud motivations. "If there is a downsizing, that might be a motivator. Or, are people coming in and working at odd hours? You need IT controls, but you need more than IT," he says. "If you have those controls and some perspective about motivations, you have a better chance of detecting suspicious activity."
    Identifying someone under stress could be an example of a non-technical indicator, Trzeciak says.
  • Be mindful of departing employees. "When it comes to people who steal intellectual property ... over 70 percent of them steal the information within 30 days of announcing they are going to leave the organization," he says. It's a good practice to have human resources notify the IT department when an employee gives notice, Trzeciak says. From there, IT can monitor activity and make note of USB downloads or e-mail exchanges, for instance.
  • Report suspicious activity. Many organizations do not report all insider schemes, only the ones they are mandated by law or regulation to report, Trzeciak says. "More reporting helps," he says. "If one individual is fired for insider fraud, you don't want him hired elsewhere in a similar role."

Ex-Minnesota Bank Employee Sentenced For Embezzling

A former bank employee will have to pay $1 million restitution for embezzling from customers of the Marshall bank where she worked.
Forty-eight-year-old Barbara Kaye Rechtzigel of Belview also was sentenced Wednesday in federal court to two years in prison.
Rechtzigel pleaded guilty in August to one count of embezzlement by a bank officer. She worked as senior operations manager at Minnwest Bank until she was fired in June.
In a plea agreement, she admitted embezzling money by creating false paperwork to make customers believe their CDs were renewed and earning interest, when she was actually taking the money.
The bank reimbursed customers more than $1 million.

Wednesday, January 16, 2013

Assistant branch manager indicted for bank embezzlement in Texas

Hannah Gonzales, 24, of Houston, has been arrested following the return of an 11-count indictment alleging she embezzled from International Bank of Commerce (IBC), United States Attorney Kenneth Magidson announced today.
Gonzales was arrested this morning without incident. She is expected to make her initial appearance before U.S. Magistrate Judge Frances Stacy at 2:00 today.
According to the indictment returned Wednesday, Jan. 9, 2013, Gonzales was an assistant branch manager at IBC. During 2010-11, Gonzales allegedly began withdrawing money from CD accounts of customers without their authorization. The indictment further alleges she chose customers who were either elderly or out of the country in order to reduce the chance she would get caught. By the time she was fired in July 2011, Gonzales had allegedly withdrawn almost $100,000.
The indictment also indicates she took money from her teller boxes without authorization. Gonzales allegedly conducted transactions in which there was no customer in addition to simply taking customer’s cash deposits without placing the cash into her teller box. On the day she was fired, IBC’s audits revealed she was short approximately an additional $24,000.
The indictment also includes notice of the government’s intent to seek a forfeiture of approximately $124,000.
If convicted, she faces up to 30 years on each count of conviction as well as a possible $1 million fine.
The investigation was conducted by the U.S. Secret Service. Assistant United States Attorney Sharad S. Khandelwal is prosecuting the case.

Tuesday, January 15, 2013

Woman sentenced in bank embezzlement in Indiana

North Vernon resident Tami Rees, 32, has been sentenced to 18 months in federal prison after she pled guilty Jan. 8 in U.S. District Court in New Albany to embezzling thousands of dollars from Napoleon State Bank in Napoleon.
According to court documents, the Federal Bureau of Investigation was contacted in February 2012 with information regarding embezzlement that had taken place at the bank. Investigators identified Rees, a 10-year employee of the bank, as the alleged perpetrator. She was charged in August.
Rees has since admitted that over the course of four years, she deposited $176,157.52 into her personal bank accounts on 89 occasions.
According to the U.S. Attorney Office which prosecuted the case, these unauthorized payments would have been noted, but Rees, who was manager of the bank's ATM Department, would use the bank's computer system to force the account into false balance. This hid her theft from bank management. Because of the high volume of transactions that occur regularly in the ATM system, she was able to carry on her embezzlement scheme for four years.
Over those years, she allegedly paid off her home equity line of credit and a personal loan she obtained from the Napoleon bank. She also made direct deposits into her personal checking accounts.
"She was a loyal customer," noted a Ripley County individual who knew Rees who, at the time of her arrest, was living at Holton. She has since been divorced and has taken her maiden name of Perry.
"When Hoosiers steal from Hoosiers, we all suffer," noted Joseph H. Hogsett, U.S. Attorney. "We all must do our part to combat this culture of corruption-it weakens our economy and harms our sense of community. That is why the U.S. Attorney's Office has in the last year redoubled efforts to hold accountable those who put greed and selfishness ahead of the interests of their employers and our state."
Rees is now awaiting assignment as to what federal prison she will serve her time. Indiana has just one such prison in Terre Haute. Per federal guidelines, 85 percent of the sentence must be served.
A cooperative witness, the court recommended to the Bureau of Pri-sons Rees serve her time close to home.
After her release, she will be on supervised release for 3 years and home detention for the first 9 months. She must complete 24 months of community service at the rate of 12 hours per month (two six-hour days) at the direction of the U.S. Probation Office. She must also undergo counseling and reimburse Napoleon State Bank.

Former Citizens Bank Teller Pleads Guilty to Embezzlement in Rhode Island

A Rhode Island woman was convicted today of embezzling more than $375,000 from the accounts of Citizens Bank customers.
Maria DaSilva, 44, pleaded guilty before U.S. District Judge Richard Stearns to violating the federal bank fraud statute.
From February 2008 through January 2012, while she was working as a bank teller at the North Attleboro branch of Citizens Bank, DaSilva embezzled over $375,000 from the accounts of three elderly bank customers by forging withdrawal slips on various accounts held by these customers.
Sentencing is scheduled for May 8, 2013. DaSilva faces up to 30 years in prison, to be followed by five years of supervised release and a $1,00,000 fine.
United States Attorney Carmen M. Ortiz and Richard DesLauriers, Special Agent in Charge of the Federal Bureau of Investigation Boston Field Division, made the announcement today. The case is being prosecuted by Assistant U.S. Attorney Jeremy Sternberg of Ortiz’s Economic Crimes Unit.

Sunday, January 13, 2013

Ex-bank auditor pleads guilty to embezzling $100K from employer in Milwaukee

A former bank auditor from suburban Milwaukee has agreed to plead guilty to a federal embezzlement charge.

50-year-old Denise Lewandowski of West Allis has admitted stealing $100,000 from her former employer, Securant Bank and Trust in Milwaukee.

A plea hearing in the case is set for February 8th.

Lewandowski was the bank’s internal auditor in 2011 when the chief operating officer noticed what he called an “odd debit entry.”

Authorities said Lewandowski remained silent when she was first questioned about the matter. She was fired, and she gave up a 401-“K” account valued at $50,000 plus unused vacation.

Lewandowski later admitted the embezzlement to the FBI, saying she stole the money to pay for her personal financial problems.