Derby Line Credit Union Manager Gets 3 Years for Defrauding Over $633,000

in Feature/News

DERBY LINE — Debra Kinney, 59, of Derby Line, was sentenced to three years imprisonment, followed by five years of supervised release, after pleading guilty of defrauding Border Lodge Credit Union accountholders of over $633,000. According to court papers, Kinney’s acts of embezzlement occurred over a period of years.

Kinney was the manager of the Border Lodge Credit Union in Derby Line. In November 2012, the Federal Bureau of Investigation, along with state and federal bank regulators, searched the credit union and seized the documents and operations of the financial institution based on evidence of widespread fraud and misappropriation of accountholders’ funds.

After an ensuing investigation, Kinney was indicted. Federal credit union regulators permanently shut down and liquidated the assets of the credit union.

Kinney pled guilty to the federal fraud charges in January, 2014.

According to court papers, Kinney would frequently write checks to herself or for her benefit, and for that of family members drawn from credit union accountholders without authorization. A subsequent financial investigation determined she removed hundreds of thousands of dollars from multiple accountholders. All told, the investigation revealed improprieties with 33 different accounts.

All of the losses of individual accountholders were insured by the National Credit Union Administration which insures credit union accounts up to $250,000. As part of the liquidation of the credit union, the National Credit Union Administration paid accountholders for losses they suffered. To date, Kinney has not paid any restitution.

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