Former Bank Manager Admits Stealing Identities to Create Bogus Loans

Allison Tussey —  March 9, 2015 — Leave a comment

Linda Sue Newcomb, 63, Madison Heights, Virginia, who was the former manager of the Lynrocten Federal Credit Union, pled guilty in United States District Court for the Western District of Virginia to embezzlement, bank fraud and identity theft charges for her role in originating loans in the names of credit union members without those members’ knowledge or consent, including forging the member’s name to fictitious loan documents.

Newcomb was previously indicted on charges related to the liquidation of the Lynrocten Federal Credit Union, Lynchburg, Virginia. In District Court, Newcomb pled guilty to one count of embezzlement from a Federal Credit Union, two counts of bank fraud and one count of aggravated identity theft. Teresa Humphries, the former head bank teller at Lynrocten, previously pled guilty to related charges.

According to evidence presented at the guilty plea hearing by Acting United States Attorney Anthony P. Giorno and Assistant United States Attorney Daniel Bubar, from as early as 2000, Newcomb and Humphries, who were the only two full-time employees of Lynrocten, carried out a scheme to defraud, embezzle and steal funds from the credit union’s accounts. The defendants carried out their scheme in a variety of manners.

Newcomb and Humphries originated loans in the names of credit union members without those members’ knowledge or consent, including forging the member’s name to fictitious loan documents. In order to make the loans look legitimate, they drafted the documents and Newcomb would approve them. They would then take the false loan proceeds and divert them to their personal accounts or use the money to pay off other fictitious loans.

In addition, Newcomb and Humphries transferred funds and wrote checks on certain credit union members’ accounts without their knowledge or consent. At least three credit union members’ accounts were subject to check kiting. The two also attempted to hide their fraud by altering or withholding credit union member statements from delivery. In all, the two caused more $13 Million in losses from the deposits of Lynrocten Federal Credit Union.

As part of her plea agreement, Newcomb has agreed to pay full restitution in the amount of loss in this case and to pay no less than $500,000 by the time of sentencing. She has also agreed to a sentencing range of between 84 and 147 months in federal prison. The exact terms of her sentence will be determined by a federal judge following the defendant’s sentencing hearing.

The investigation of the case was conducted by Federal Bureau of Investigation, the United States Secret Service and the Lynchburg. Acting United States Attorney Anthony P. Giorno and Assistant United States Attorney Daniel Bubar are prosecuting the case for the United States.

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Allison Tussey

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