A Des Arc woman admitted Monday in federal court in Little Rock that she used her position as president of the federal credit union at a Veterans Administration hospital to embezzle $62,513.09 between June 2003 and April 2012.
Karen York, who is married and has two elementary school-age children, pleaded guilty before U.S. District Judge D. Price Marshall Jr. to a single charge of credit-union embezzlement, which is punishable by up to 30 years in prison and a fine of up to $1 million.
With defense attorney Bill James of Little Rock at her side, York waived her right to have the charge presented to a federal grand jury and pleaded guilty to a criminal information filed in open court.
Assistant U.S. Attorney Stephanie Mazzanti told the judge that the case came to the attention of the U.S. Secret Service through a theft report filed Aug. 29 with the Little Rock Police Department. Mazzanti said York was fired in May 2012 after several discrepancies were discovered in the credit union’s books. She said that in September, the credit union hired an auditor to review the books and determine an exact amount taken.
After auditors determined the amount stolen, York repaid $23,572.50 by depleting a bank account belonging to her mother-in-law, with the woman’s permission, and depositing the entire amount into the credit union’s account, Mazzanti said.
Mazzanti said insurance covered $27,158.89 of the loss, leaving $11,781, plus the $5,000 cost of the audit, still unpaid. When York is sentenced at a later date, she will owe restitution of $43,940.59, she agreed in court on Monday. That includes reimbursing the insurance company for what it paid to cover the credit union’s losses.
Mazzanti told the judge that the embezzlement took a variety of forms. She said about $12,500 was taken in a check-kiting scheme, through which York shuffled checks and deposits around to keep her balance artificially inflated. The prosecutor said that about $18,500 was taken by York authorizing the credit union to pay health insurance premiums for her entire family, when it was actually supposed to pay only the premiums of employees.
Mazzanti said that among other ways the embezzlement was carried out, York gave herself an unauthorized pay increase of $3,500 from credit-union funds.
When Marshall asked York if she agreed with the prosecutor’s rendition of the facts, she replied “Yes, sir,” in a barely audible tone.
Arkansas, Pages 11 on 06/11/2013