Daniel Johnson, 37, of Centerville, Indiana, has been sentenced to two years in federal prison, followed by two years of supervised release, after pleading guilty to two counts of bank fraud. Johnson must also pay $285,855.66 in restitution.
Court documents say that Johnson served as Chief Executive Officer and Manager of Richmond City Employees Federal Credit Union. In this role, he held significant authority over the underwriting and processing of member loans. While Credit Union officials are permitted to apply for loans, such applications must be reviewed and approved by the Board of Directors.
On August 5, 2021, and September 16, 2021, Johnson submitted two fraudulent applications for secured loans, each valued at $150,000, claiming the funds were intended for the purchase of recreational vehicles. In reality, Johnson had no intention of purchasing the vehicles.
To conceal his scheme, Johnson falsely represented that the Board of Directors had approved the loans when it hadn't. After obtaining the funds, Johnson used a portion to pay off previously secured loans totaling approximately $65,697.98, thereby eliminating the Credit Union’s security interest. He then diverted the remaining proceeds to pay personal debts, including student loans, and to purchase a home.
“As the Chief Executive Officer, Johnson was tasked with protecting money earned by hardworking public servants for the City of Richmond. Instead, Johnson chose to abuse this trust and line his own pockets through dishonesty,” said Tom Wheeler, United States Attorney for the Southern District of Indiana. “His actions not only violated the law but also undermined the integrity of the institution he was entrusted to serve. The U.S. Attorney’s Office and our law enforcement partners will continue to hold accountable those who exploit positions of authority for personal gain.”
In the September 2021 application, Johnson further violated Credit Union policy by forging his then-wife’s signature, making it appear as though she had requested the second loan. Through this scheme, Johnson obtained what were effectively unsecured loans totaling approximately $300,000. As a result, the Credit Union suffered losses estimated at $285,855.66.
“Credit union members rely on their leaders to safeguard their finances - not misuse them for personal gain,” said FBI Indianapolis Special Agent in Charge Timothy J. O’Malley. “This sentence demonstrates the FBI’s commitment to pursuing those who exploit financial institutions through fraudulent schemes.”
The FBI investigated this case. The sentence was imposed by U.S. District Court Judge Richard L. Young.
U.S. Attorney Wheeler thanked Assistant U.S. Attorneys Adam Eakman and Kyle M. Sawa, who prosecuted this case.
Editor’s Note: Richmond City Employees Federal Credit Union merged into Kemba Credit Union, of West Chester, Ohio, effective April 1, 2023.