Ex-credit union employee to be sentenced

Kenneth Hart/The Independent

Ashland July 02, 2009 12:12 am

— A former employee of an Ashland credit union is scheduled to be sentenced Monday in federal court on charges of fraud, identity theft and unauthorized credit card use.
Crystal L. Smith pleaded guilty to those charges in March in U.S. District Court.
Smith was employed by Bluegrass Federal Credit Union on Carter Avenue from October 2006 until April of last year, according to court records. During that period, she created fraudulent loan accounts using Social Security numbers belonging to others, including her own daughter.
Smith then used the bogus loan accounts as a vehicle to transfer funds to a Bluegrass checking account that she would access with a debit card, court documents state.
Over an 18-month period, Smith embezzled $165,110 from Bluegrass using the fraudulent loan accounts.
While employed at the credit union, Smith also had access to a money market account held by Bluegrass at City National Bank, according to records. Her Social Security number was linked to the account so she could have access to it as part of her normal job duties.
After she was fired by Bluegrass, Smith opened a personal savings account at City National. However, through an “administrative oversight,” she continued to have access to the credit union’s money market account, records state.
Between Aug. 1 and Aug. 15 of last year, Smith transferred funds from the money market to her personal account on four occasions. The withdrawals totaled $77,095.
Of that, Smith deposited $63,496 in another account she had at National City Bank. National City froze the account when the fraud was discovered and returned the money to City National, documents state.
Smith was indicted in January on eight counts. Four of those counts will be dismissed at her sentencing under the terms of her plea agreement.
Smith faces a maximum sentence of 30 years in prison. However, any sentence she receives will be imposed after consideration of federal sentencing guidelines.
Smith’s sentencing hearing is scheduled for 5 p.m. before Judge David L. Bunning.
KENNETH HART can be reached at khart@dailyindependent.com or (606) 326-2654.