Honolulu, HI – 19 July 2018 – The two women who caused the closure of the tiny 75 year old, $20M+ asset Molokai Community Federal Credit Union after embezzling more than $1M over a seven year period, will be spending the next several years behind bars.
On Wednesday, U.S. District Court Judge Derrick K. Watson handed down a 50 month prison sentence to 40 year old Janell Purdy, customer service representative of Wailuku.
Alleged “organizer” of the scheme and Manager, Allennie Naeole, 55, pleaded guilty to embezzlement, aggravated identity theft and related charges earlier this year after they embezzled from the closed and conserved Molokai Community Federal Credit Union on the small, lesser travelled Hawaiian island of Molokai.
Judge K. Watson ordered Purdy to pay almost $1M in restitution, and serve three years of supervised released upon completion of her sentence.
Allennie Naeole was sentenced to serve seven years behind bars, three years of supervised release and pay more than $1 million in restitution last month.
Department of Justice, court documents revealed that the two conspired to steal the money from June 2008 through December 2015.
Their crimes involved unauthorized checks, forged signatures and falsified reports to Examiners and the NCUA along with a trail of attempted cover ups.
The two women are convicted of using the stolen funds to pay off personal expenses like credit card bills, mortgage payments, vacation properties and even trips.
The two were the only two permanent employees of the credit union in Hoolehua, with Purdy working as customer service representative.
According to court documents, the defendants withdrew and spent more money from personal credit union accounts in their names and family members’ names than was available in deposits. Both women controlled financial accounts and maintained the credit union’s books and records.
Purdy signed several checks issued from credit union accounts to pay for personal expenses of Naeole and her family members, according to documents. One check on Oct. 10, 2008, was for $8,855 to pay for Naeole’s Toyota Yaris.
In another example cited, Naeole withdrew $8,867 on Feb. 27, 2015, to pay part of her First Hawaiian Bank credit card bill.
The credit union’s books and records were altered to cover up negative balances by showing deposits being made into personal accounts of Purdy, Naeole and their family members, according to court documents.
The losses resulted in the credit union becoming insolvent and shutting down it’s operations after serving the small community of Molokai since 1937.
The Department of Justice alleges that the losses and liquidation expenses related to Naeole and Purdy’s actions exceeded $2 million.
During Purdy’s sentencing, Judge Watson called her conduct “catastrophic” and agreed with prosecutors that greed was her motive.
Investigations conducted by the FBI, the Treasury Department and the National Credit Union Administration played a role in the investigation.
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