Ashland Loan Officer Sentenced for Embezzlement Scheme

ASHLAND, KY—The United States Attorney’s Office and the Federal Bureau of Investigation jointly announced today that a loan officer in Ashland was sentenced late yesterday for using a scheme to embezzle more than $165,000 from her employer.

Crystal Smith, 36, of Greenup, Ky. was sentenced yesterday to 57 months in prison by United States District Court Judge David L. Bunning for credit union fraud, bank fraud, and aggravated identity theft.

In March of 2009, Smith pleaded guilty to the charges and admitted that she used her position as a loan officer at the Bluegrass Credit Union in Ashland to create fraudulent loans over an 18-month period that started in October of 2006.

According to the plea agreement, Smith used other people’s social security numbers to create the fraudulent accounts. Using this scheme, Smith embezzled more than $165,000. The credit union terminated Smith for reasons unrelated to the scheme. However, Smith opened an account at another local bank and soon discovered that she still had access to the Bluegrass Credit Union’s money market account. In a span of a few days in August of 2008, Smith illegally withdrew more than $77,000 from the credit union’s money market account.

Under federal law, Smith must serve 85 percent of her prison sentence, and, upon release, will be under the supervision of the United States Probation Office for five years.

The investigation was conducted by the FBI. The United States was represented by Assistant United States Attorney Alamdar S. Hamdani.