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Former Scott Credit Union commercial loan officer going to prison for fraud, money laundering

 

EAST ST. LOUIS — A former Scott Credit Union manager is going to prison for embezzling up to $25 million from the institution.

Theodore J. Longust, 51, formerly from Columbia, Ill., was sentenced to a total of 121 months in prison as a result of his convictions in a nine-count Indictment charging one count of financial institution fraud; four counts of misapplication of funds; three counts of money laundering; and one count of making a false record to the credit union with the intent to deceive.

U.S. Attorney for the Southern District of Illinois Donald S. Boyce said today that Longust was an employee of Scott Credit Union in the commercial loan department from Nov. 7, 2005, through Dec. 8, 2014, and held the title of business relationship manager.

Longust executed a scheme to defraud through the embezzlement of credit union funds, the creation of fraudulent loans, the payment of loans through the misapplication of funds from other loans, the increase of credit limits on loans that did not have the requisite board approval, the issuance of business loans without the required documentation or security, and the issuance of letters of credit without the required documentation and security.

He also knowingly submitted a false report to Scott Credit Union for the third quarter of 2014 that misstated loan balances and omitted loan amounts and underreported loans of more than $12 million.

There was evidence at sentencing that the overall loss to Scott Credit Union, which included criminal and civil losses, was approximately $25.8 million, Boyce said.

Criminal direct losses were determined to be $13,719,947.21. The court ordered Longust to pay restitution of $5,012,362.52 to Scott Credit Union and $9,114,560.69 to CUMIS Mutual, the bonding company for Scott Credit Union.

The safety and soundness of Scott Credit Union has not been adversely affected by the criminal conduct, Boyce said in a statement.

The prosecution is the result of an investigation by the Federal Bureau of Investigation, the Internal Revenue Service/Criminal Investigation with the assistance of Scott Credit Union. The case was prosecuted by Assistant United States Attorney Norman R. Smith.

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