I have a slight obsession with true crime TV. “Snapped,” “Dateline,” “48 Hours Mystery,” pretty much any show on the Investigation Discovery network – they’re all in my DVR queue at any given time. There’s just something about betrayal, life insurance policy schemes, intense police interrogations and the sound of Keith Morrison’s voice that makes for the perfect bedtime lullaby.
What fascinates me the most about these stories is the psychology behind the crime. What could possibly drive someone to plan and commit a murder, knowing they’re eventually going to get caught and go to jail for the rest of their lives?
That’s why it’s no surprise that here at CU Times, I find stories about embezzling credit union employees to be some of the most compelling that we publish. Each time one crosses my desk, I wonder, “What was this person thinking? And how can other credit union executives identify the traits of an embezzler before it’s too late?”
For answers to these questions, I turned to our resident embezzlement expert, CU Times Staff Reporter Peter Strozniak, who digs deep into the stories behind the latest arrests or sentencings in the credit union community to help our readers understand why these crimes occur. Here’s what he had to say.
Natasha Chilingerian: When a CEO or another executive commits the unthinkable act of embezzling from their own credit union, what are some of the most common motivations?
Peter Strozniak: I’ve talked to fraud experts about this, and sometimes the embezzler has heavy debt problems or family members who have fallen into heavy debt. They have relatively easy access to money, and some of them who take out the money have intentions of paying it back, but they never do because the fraud snowballs. Sometimes it’s a gambling addiction. Another thing is some want to live a certain lifestyle. It’s almost like a drug addiction because they’ll get the pleasure of say, going on this great vacation with the money they stole and forgetting all their troubles, and the thought of getting caught doesn’t enter their mind until they come back home, and have to go back to work and figure out how to cover their tracks.
NC: That leads to my next question – do they even consider getting caught? Or are they so consumed by the emotion behind their motivation that getting caught isn’t a concern?
PS: I think it’s always a concern in the back of their mind because they have to keep working to conceal their theft, and because they’re so deep in it, they know they’ll never be able to pay the money back. I remember in one case a couple years ago, police said when they searched the woman’s house they found hundreds of instant lottery tickets. They thought she bought those tickets in the hopes she would win the lottery and be able to pay the money back. I think the embezzler just keeps doing it because they’re kind of in a situation where they have to. If they don’t keep concealing it and hiding it, they’re going to go to jail. But sooner or later they’ll make a mistake. Sooner or later, an auditor will catch it.
NC: What are some of the top traits or red flags credit union executives should look for in employees who have the potential to embezzle?
PS: Many internal fraud experts I talked to said being very controlling is a red flag. With the “QVC shopping queen” Donna Jennings, the former CEO of Winchester Community FCU, she was ordered by the court to undergo a psychological evaluation. She basically said she was in control of what happened in the credit union for many years, and knew some of the auditors and what they were looking for, and how to hide the red flags. She was very controlling, but ironically, she had no control over her shopping addiction. [Jennings is serving four and a half years in federal prison for embezzling more than $1 million to buy real estate and pay $600,000 in credit card bills that resulted from a QVC shopping obsession.]
For Linda Clark, [a former SCIAP CU Bookkeeper who stole $2.4 million over 37 years], she concealed her theft by maintaining two sets of accounting records and also refused to allow other employees, including the CEO, to access the system. I asked her lawyer how she did that, and he said she just told them no. Never taking a vacation is also a big one – they think they need to be there to keep covering their tracks.
Another thing is when an executive makes excuses. Kathryn Sue Simmerman, [a former Shoreline FCU Manager who stole nearly $2 million over 17 years], made all kinds of excuses to the board about getting the credit union’s community charter. For five years before her fraud was uncovered, the board voted to convert to a community charter to attract more members for growth. She would apply and then tell the board the NCUA lost the paperwork. Or that she reapplied and there were issues with the paperwork, or missing information. Of course, they realized later that she never applied because the embezzlement would have been exposed.
After our conversation, I felt satisfied yet wanting more. It makes sense that many embezzlers don’t intend for their crimes to reach the levels they often do; the same may be true for many violent crimes as well. I’d love to take a deeper dive into the mind of an embezzler (perhaps in a prison interview with the QVC shopping queen?) Until then, I’ll be quenching my thirst for criminal mind analysis by watching “Dateline.”
