Women sentenced in bank fraud scheme that led to liquidation of El Paso credit union
Two women who pleaded guilty to stealing millions of dollars from an El Paso credit union, causing the dissolution of the institution, have been sentenced to federal prison.
Thursday, District Court Judge Philip Martinez sentenced Hilda Simental Mendoza, 53, to 10 years in federal prison, announced federal officials.
She and her co-defendant, Maria Guadalupe Hernandez, 59, were the former assistant manager and manager of the now liquidated El Paso Federal Credit Union (EPFCU).
On May 24, 2016, both women pleaded guilty to an eleven-count indictment which included charges of bank fraud and wire fraud.
Court records state that from August 2007 to 2012, the two sold more than 100 EPFCU share certificates to other credit unions, but kept the sales records in a secret lodger.
The monies from those sales were then placed into accounts belonging to relatives, dormant customers, and even deceased customers.
The defendants then used the generated funds from newly sold EPFCU share certificates to pay out dividends to investors and principal payments to prior purchasers of EPFCU share certificates.
Hernandez used that money for personal benefits including travel, vacations, and real estate purchases.
After years of creating fake EPFCU records to hide their scheme from auditors, in September 2011, an examiner from the National Credit Union Association (NCUA) noticed irregularities in EPFCU’s undivided earnings.
In June 2012, examiners performed a detailed audit of EPFCU records and found additional accounting irregularities.
During an audit follow-up, examiners discovered a hidden binder inside the credit union which contained an accounting of all of the unrecorded EPFCU share certificates sold by Hernandez and Mendoza.
On September 28, 2012, the NCUA delivered the liquidation order to EPFCU’s Board of Directors and thereafter, liquidated EPFCU.
As part of the liquidation process, customers’ accounts were transferred to El Paso Area Teachers Federal Credit Union.
Last Wednesday, Hernandez was sentenced to more than 15 years in federal prison, followed by five years of supervised release.
She was also ordered to pay a $10,000 fine.
In addition to Mendoza’s 10 year sentence Thursday, she was given five years supervised release and ordered to perform 100 hours of community service.
Both women were ordered to pay more than $18 million in restitution to NCUA, representing the loss generated by their scheme.
The investigation was conducted by the FBI with assistance from the NCUA. Assistant United States Attorney Chris Skillern prosecuted the case on behalf of the Government.
