Fed plans to bar, order monies paid by former bank teller who embezzled more than $400k

A former head teller and vault custodian for Farmers & Merchants Bank (Baldwin, Miss.) who embezzled about $441,321 over a 12-year period would be barred from participating in the affairs of any federally insured financial institution and would pay restitution and a civil money penalty totaling some $30,000 under orders being sought by the Federal Reserve Board.

The discovery of Carol Allen’s crimes, according to the notice signed Aug. 19 by the Fed Board, began with her own partial admission in April 2018 when a customer at the Marietta branch where she worked asked that $9,500 in loan proceeds be paid to him in large denominations of cash. The notice states that Allen told the branch manager that there were not enough large denomination bills in the vault to fund the customer’s request because, over the years, she had been taking money from the vault for her personal use. The next day, it adds, she admitted to the main office that she had taken about $200,000 over the years. It says she was fired that day.

Additionally, when asked about the bank’s discovery of several CD withdrawal slips in her workstation, Allen also admitted to illegally withdrawing funds from customers’ certificates of deposit, the notice states. Over the same period, it says, she repaid $94,300 to affected customers.

The order says Allen did these things from about February 2006 to April of last year and that the bank lost at least $352,285.09. That loss includes $247,976 missing from the bank’s vault on April 6, 2018; the $99,045 in net cash withdrawals (after subtracting what was already repaid) by Allen from customer CDs; and $5,264.27 in interest lost by customers (given Allen’s unauthorized withdrawals from their CDs).

On May 4, 2018, Allen authorized the bank to apply $120,895.41 of her employee profit sharing plan as partial restitution. That left a total of $231,389.68 not repaid by Allen. The bank’s insurance carrier repaid a “substantial portion” of the bank’s losses.

The Fed, in its notice, says it intends to issue a prohibition order against Allen, order her to pay restitution to the bank totaling $20,264.27, and order her to pay a civil money penalty of $10,067. It says it’s also seeking a public hearing before an administrative law judge regarding her crimes (embezzlement, and forging bank documents) and unsafe and unsound practices.

Notice Re. Carol Allen