Sherry Ann Allen, 49, of Johnson City, was CEO at Greater Eastern Credit Union when a vendor who did not work for the credit union contacted the facility to confirm he had received payment for his services. The problem was that the amount the vendor was paid was less than the check that showed up in the bank’s records.
Initially, the credit union contacted the Johnson City Police Department, but the investigation was ultimately turned over to the FBI and IRS, and “showed that Allen had paid a vendor, and purposely and personally processed a transaction in which $10,000 was transferred to an account that she controlled,” according to a press release from the U.S. Attorney’s Office.
“During their review, credit union personnel discovered additional transactions Allen processed in which funds were deposited into other accounts she controlled. The credit union personnel informed their Board of Directors that Allen was stealing money from the credit union and she was placed on indefinite suspension. The Board of Directors ordered that an accounting firm conduct a fraud examination. By this time, the FBI and Internal Revenue Service Criminal Investigation had joined the investigation.”
The investigation revealed that Allen had embezzled $1,195,596 in calendar years 2011 to 2017 and used some of the stolen money for her personal benefit. In the beginning, she used the stolen money to pay her credit cards and later purchased an Infiniti and Ford truck for personal use. Allen and her husband also took a cruise and trips to Tucson, Arizona, and Eastern Europe. Additionally, she purchased a timeshare in Orlando, Florida, a camper, clothes and jewelry.
Allen was also generous with the credit union’s money, and donated some of it to charitable causes. She took her church youth group on several trips, including missions to Ireland, Nicaragua and Florida. She paid for Vacation Bible School items. She gave stolen money to people who needed groceries and purchased two vehicles for members of her church.
Authorities said Allen did not report the embezzled and misapplied money as income on her joint tax returns in tax years 2011, 2012, 2013, 2014 2015 and 2016. In doing so, she and her spouse, prepared and filed, or caused to be prepared and filed false and fraudulent tax returns.
“The U.S. Attorney’s office will continue to prosecute individuals in positions of trust, who steal or misappropriate funds for their own personal use, when the cases are referred to our office,” said J. Douglas Overbey, U.S. Attorney for the Eastern District of Tennessee.
Upon her release from prison, Allen will be supervised by U.S. Probation for three years. She was also ordered to pay a total of $1,237,547.04 in restitution.