Choking back tears, 50-year-old Patricia Sherman looked back at her former co-workers and said, “I’m sorry.”
She then turned her head back toward the federal judge in front of her and added, “I didn’t do it to hurt them.”
Sherman — who pleaded guilty to embezzling $7 million from a New Albany credit union in recent years — will face about eight years in federal prison. After being released, her wages will be garnished until she makes full restitution for the loss.
Sherman was formerly the head teller at Obelisk Federal Credit Union in New Albany. She admitted Friday during a plea and sentencing hearing in U.S. District Court in New Albany that she embezzled money from 2003 until she was caught in March 2007.
Her sentence was on the lower end of the scale guidelines, which recommended between 97 and 121 months.
James Earhart, who represented Sherman, asked the judge to consider that she was a first-time offender prior to the sentencing.
“Obviously, she regrets the situation,” Earhart said. “She regretted the situation while it was taking place.”
He added that she has taken responsibility for the crime and cooperated with federal investigators once she was discovered. Earhart said she had a gambling problem, perhaps a mental disorder, saying that she spent much of the money in local casinos.
“The defendant’s criminal conduct is mind boggling,” countered Assistant U.S. Attorney Susan Dowd.
She stole $7 million over 46 months, a total of about $150,000 every month, or about $37,000 every week, she said.
“She walked into the vault and took stacks and stacks of money,” Dowd said.
She also altered records before audits and initially lied to the FBI about where the money went. Dowd said Sherman believed others were involved, but she never was able to offer any names.
Federal Judge David F. Hamilton, who decided on the sentence, said that both her clean criminal record and the amount that she stole were considered, among other factors in the sentence.
“This is a theft, a case of grand theft, on an astonishing scale,” Hamilton said, “driving what had been a healthy credit union into insolvency.”
Because of the loss, the credit union was placed in conservatorship and later merged with Centra Credit Union.
“There are not many times for which a sentence of more than eight years in federal prison for a first-time offender is appropriate,” Hamilton said.
Her sentence also includes a lifetime ban from licensed gambling establishments and a stipulation that she can never again work in a fiduciary role.
There are a lot of unanswered questions, remarked Hamilton. He wondered what happened to all the money and how her activity went unchecked for such a period of time.
Dowd said that investigators were able to track about $1 million to casinos, but noted that the rest was never found. As a part of the plea deal, Sherman turned her financial records over to the court. There’s also mechanisms in place to investigate her if she comes by wealth after being released from prison, Hamilton said.
The case was attended by several former co-worker, many of whom declined to comment because they now worked for Centra Credit Union.
“An institution 60 years old, built with family in mind,” commented former employee Faye Leininger, “to see it destroyed in that way — you can’t comprehended it.”
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Former credit-union teller gets eight years for embezzling $7 million
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