LYNCHBURG, Va.—Linda Sue Newcomb, 63, the former manager of the Lynrocten Federal Credit Union here, has pleaded guilty to one count of embezzlement from a federal credit union, two counts of bank fraud and one count of aggravated identity theft in a scheme that caused $13-million in losses and led to the liquidation of the credit union in May of 2013.
In a plea agreement, Newcomb agreed to pay full restitution in the amount of loss in the case and pay no less than $500,000 by her sentencing date, and also agreed to spend between 7 and 12 years in federal prison.
Newcomb’s plea follows that of the only other employee of the former credit union, head teller Teresa Humphries. According to the indictment, Newcomb and Humphries carried out a scheme to embezzle money from credit union members by forging the names of account holders on fake loan documents.
In order to make the loans look legitimate, the documents were drafted and Newcomb would approve them. Newcomb and Humphries would take false proceeds from the loans and put the money in their personal accounts or use it to pay off other false loans.
Newcomb and Humphries also engaged in a check kiting scheme involving accounts of at least three members. The duo, who were indicted in June of 2014, also used the accounts of family members as part of the scam, according to the FBI.