Former Credit Union CEO Pleads Guilty to Embezzlement and Money Laundering

WHEELING, WV—Acting United States Attorney Betsy C. Jividen announced that BERNIE D. METZ, who served as the Chief Executive Officer and Manager of the Center Valley Federal Credit Union, pleaded guilty today (January 4, 2010) to charges of embezzlement and money laundering in United States District Court before Judge Frederick P. Stamp, Jr.

Pursuant to a plea agreement, METZ entered guilty pleas to two counts of an Information filed today by the Government. Count One of the Information charges METZ with a violation of the statute making it a crime for an employee of a federal credit union to embezzle and misapply money, funds, credits and other things of value in excess of $1,000. Count Two is a money laundering violation, charging METZ with causing a forged check to be drawn on the operating account of the Center Valley Federal Credit Union on July 27, 2007, in the amount of $200,000.00, made payable to the construction company which was building the Roadworthy Tavern and Resort, a restaurant and cabins in which she had a financial interest.

According to the evidence presented by the Government during the proceedings relating to the embezzlement count, an audit conducted by the National Credit Union Association discovered that almost $9,000,000.00 in funds was missing from the credit union in January of 2009. As a result of the discrepancy, the credit union was liquidated in February of 2009, and a criminal investigation was commenced into METZ’s activities by the Internal Revenue Service and the Federal Bureau of Investigation.

The evidence presented by the Government disclosed five different methods by which METZ embezzled and misapplied credit union funds. She made unauthorized withdrawals from members’ accounts, wrote checks on the Credit Union account for personal expenses for herself and her family members, and made false entries showing withdrawals by members from their accounts. METZ also made fictitious check deposits into the accounts of her family members, with no supporting documentation showing that the funds ever existed. She also wrote checks from the Credit Union’s account to cover personal expenses for herself and her family, but did not record the withdrawals in the Credit Union records. METZ also recorded fictitious deposits in the Credit Union’s general ledger, and then made withdrawals with Credit Union checks written for her benefit, her family members and their various business interests. Finally, when the United States Treasury Department issued the Credit Union a check for mutilated money which the Credit union had returned, METZ deposited that check into her son’s account.

METZ used the money she embezzled to finance the building of the Roadworthy Tavern and Resort in West Liberty, West Virginia, and further to the benefit of herself, her husband and family members, purchasing a number of vehicles and paying off family credit cards.

The evidence presented at the plea hearing on the money-laundering count of the Information showed that METZ wrote a check from the Credit Union’s general account for $200,000.00 payable to the construction company building the Roadworthy Tavern and Resort, and that she forged the teller’s signature to authorize the check.

In addition to pleading guilty, METZ must forfeit any and all assets that were proceeds of her offenses. Property which is to be forfeited as embezzlement proceeds, or which was purchased with the funds she obtained as a result of the embezzlement charged in Count One, includes funds seized from a number of bank accounts in which METZ had signature authority; a 2005 Toyota Tundra vehicle; a 2009 Mercedes SLK 300; a Kubota tractor with Kubota front loader and backhoe attachments; an L2800 tractor; and an RT1100 four-wheel drive utility vehicle.

METZ must also forfeit all real and personal property involved in the money laundering violation charged in Count Two, including the Roadworthy Tavern and Resort in West Liberty and forfeitable assets of the business interests.

If any of the forfeitable property cannot be located; has been transferred or sold to or deposited with a third party; has been placed beyond the jurisdiction of the Court; has substantially diminished in value, or has been commingled with other property, it is the intent of the United States to seek the forfeiture of substitute property up to the value of the forfeitable property described above.

As part of her plea agreement, METZ must cooperate in the ongoing effort to identify and locate assets and property subject to forfeiture. The agreement also provides that in exchange for METZ’s husband’s cooperation in the continuing effort and investigation to identify and locate forfeitable property and assets, the United States has agreed to forego prosecution of the defendant’s husband, Everett Metz, and various business entities with which he is involved.

METZ, who is 57, faces a sentence of seven years and three months in prison if the Judge accepts the binding plea agreement between METZ and the government.

Pursuant to the terms of the plea agreement, at the time of sentencing the Court will determine the amount of the money judgment to be entered against the defendant. The Information filed today provides that the United States intends to ask the Court for a money judgment against METZ in the amount of approximately $8,989,484.00.

METZ is free on bond pending sentencing.

The case was prosecuted by Assistant United States Attorneys Robert H. McWilliams, Jr. and Michael D. Stein. The case was investigated by the Federal Bureau of Investigation, the Internal Revenue Service - Criminal Investigation, and the United States Marshals Service.