A former manager of a Kansas credit union and an employee of a New Mexico credit union were subject to prohibition orders in July, the federal credit union regulator said Friday, the former after being charged with stealing nearly $600,000, and the latter after charges of misappropriating more than $33,000.
Both consented to the orders, which prohibit them from participating in the affairs of any federally insured financial institution.
The National Credit Union Administration (NCUA) said the orders were issued against Audrey Elkins, a former manager of William Newton Memorial Hospital Credit Union, Winfield, Kan., and Richard Franco Arceo, a former employee of White Sands Federal Credit Union, Las Cruces, N.M.
The agency stated in its prohibition order that Elkins, between November 2010 and November 2017 as a manager at the credit union, created a total of $599,322 in fictitious loans. The agency alleged that $332,340 was credited as paid on the phony loans, leaving a net balance of $266,982 – which was allegedly used by Elkins for personal purposes through a separate member account in the name of “Linn Stiles.”
The alleged fraudulent activity, the agency said, was uncovered in 2018 during a forensic audit (conducted by Dawson Forensic Group), which ultimately led to a bond claim for the balance (plus the cost of the audit, for $14,400).
Elkins was subsequently charged by federal prosecutors in September 2020 with one felony count of embezzlement of more than $599,000, NCUA noted.
In the New Mexico prohibition, the agency alleged that Arceo, while an employee at White Sands, misappropriated members’ funds of $33,620 from the credit union using fraudulently obtained or generated ATM/debit cards.