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Sunday, January 12, 2014

Former Lynchburg credit union teller pleads guilty to embezzlement

A former head teller of the defunct Lynrocten Federal Credit Union pleaded guilty in U.S. District Court on Tuesday to an embezzlement charge prosecutors say contributed to the financial institution’s collapse in the spring of 2013.
Teresa Wieringo Humphries, 58, of Madison Heights, admitted to embezzling more than $1 million from the Lynchburg-based credit union, which closed in May, U.S. Attorney Timothy Heaphy said in a news release.

Humphries had created fraudulent loans and perpetrated check-kiting schemes for more than a decade, Heaphy said. While Humphries stole more than $1 million, he said the total loss to the credit union was more than $7 million.
Humphries participated in a “massive fraud scheme” by falsifying loan documents to steal from her employer, Heaphy said.
“Her brazen and persistent acts of fraud violated the trust placed in her by the Lynrocten Credit Union and its customers,” he said in the release.
The U.S. Attorney’s Office release said Humphries worked with the credit union’s manager in the fraud, which contributed to the ultimate liquidation of the financial institution, located in a small office off Concord Turnpike. The release did not name the manager.
According to search warrant affidavits, Humphries told investigators in interviews in April and May that she and former manager Linda Newcomb had taken loans out in members’ names and deposited the funds in family members’ accounts for a decade.
Humphries later retracted the statement. Newcomb has denied all knowledge of the scheme.
Heaphy’s spokesman, Brian McGinn, said Humphries is the only person who has been charged in connection with the case. He declined to comment further.
Humphries served as the head teller at the Lynrocten Credit Union in Lynchburg since the mid-1980s, according to evidence presented in court. Beginning in 2000 and continuing until the credit union’s liquidation last year, Humphries and the manager carried out several schemes to embezzle and steal funds from the credit union’s deposits through unauthorized and fraudulent origination of loans in the names of credit union members, prosecutors said.
Humphries and the manager also used a check-kiting scheme, which involves passing fraudulent checks with the expectation that enough money will be deposited before the check is cashed, to obtain additional monies and conceal and facilitate the fraudulent scheme.
The money created through the loan and check-kiting schemes was funneled to the Lynrocten Credit Union accounts of Humphries, the manager and their family members. Between 2007 and the credit union’s failure, prosecutors say Humphries personally stole about $3,000 to $4,000 per month that was deposited into the accounts belonging to family members.
The FBI, the U.S. Secret Service and Lynchburg Police Department conducted the investigation, the release said.
At sentencing, Humphries faces a possible penalty of up to 30 years in prison and a fine of up to $1 million.

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