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Sunday, August 4, 2013

Former employee sentenced for credit union theft in Kansas

A woman has been sentenced to 21 months in prison for embezzling from a local credit union, according to a spokesman for the U.S. Attorney's Office.
Carla Welborn was sentenced Tuesday in U.S. District Court in Kansas City, Kan. As part of her sentence, she was ordered to pay $329,702 in restitution, according to information from James Cross, spokesman for the U.S. attorney of Kansas.
The crime occurred between January 2009 and January 2012 while Welborn worked at the Credit Union of Leavenworth County at the Eisenhower VA Medical Center in Leavenworth.
In November, Welborn pleaded guilty to the single count of embezzlement from a credit union.
According to a written plea agreement in the case, Welborn took money from the vault of the credit union's branch office on the VA grounds.
She also reportedly targeted the accounts of credit union members who didn't receive monthly balance statements as well as those who lived out of town or were ill. She redirected mailed statements so account holders wouldn't notice they were missing funds.
If affected account holders requested statements, she sent them fraudulent documents, according to the written plea agreement.

A former credit union employee, sentenced to 21 months in federal prison for embezzlement, targeted accounts of 23 members who were either ill, near death or who lived out of town to steal more than $300,000 over four years, according to court documents.

Carla Welborn, who worked at the Veterans Administration Medical Center branch of the $7 million Credit Union of Leavenworth County in Lansing, Kansas, was also ordered by a U.S. District Judge Kathryn Vratil in Kansas City on July 30 to pay restitution of $28,002 to the credit union and $329,702 to the CUNA Mutual Group.

The documents did not reveal Welborn's title at the credit union.

CULC, which has 1,650 members, was chartered in 1956 to serve veterans, though it also serves businesses, government agencies and individuals in Leavenworth County.

Court documents show Welborn befriended many members and performed extra services for them, such as reconciling accounts and helping them pay bills, even though she was not required by the credit union to provide these services.

In addition to targeting accounts of members who were ill, near death or who lived out of town, Welborn also targeted accounts of members that she knew were not receiving monthly balance statements.

Federal prosecutors said Welborn would redirect some credit union members’ mailed statements to the bank so account holders would not notice their accounts were missing funds. And when account holders wanted statements, Welborn would mail them fraudulent statements. To keep track of the stolen money, she kept a handwritten ledger with amounts taken from each account.

Eventually, according to court documents, Welborn would write checks payable to the credit union’s bank (Country Club Bank) if there was not enough cash on hand at the credit union for her to steal. Country Club Bank would cash the checks because Welborn would indicate that the funds would be used to replenish the “petty cash account” at the credit union.

In 2010, when the credit union changed its correspondent bank to Missouri Corporate Credit Union, the “petty cash” replenishments went directly to the main office in Lansing. Because Welborn did not have access to sufficient cash on hand to steal, she began taking the money out of members’ accounts.

Welborn also took money out of the credit union’s vault, according to court documents. Although the money in the vault was supposed to be counted by at least two employees, Welborn had been covering her tracks by using her son who was working with her at VA Medical Center branch.

“Welborn would often tell her son….the vault was counted and there was no need for him to do it,” court documents state.

Welborn’s son has not been charged by federal prosecutors.

When the credit union became aware of the fraud, an accounting firm was hired to conduct a comprehensive audit, which revealed Welborn stole $304,000 from 23 credit union members from Jan. 1, 2009 to Jan. 26, 2012.

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