FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC at 410-209-4885
September 8, 2006
FOR IMMEDIATE RELEASE
ASSISTANT MANAGER OF CUMBERLAND CREDIT UNION INDICTED FOR
CORRUPTING LOAN PROCESS INVOLVING ABOUT $2 MILLION
Defendant Allegedly Sought to Enhance His Standing
In Order to Become Manager
Baltimore, Maryland - A federal grand jury indicted Richard William Shives, Jr., age 49, of Cumberland, Maryland, for making false statements to the National Credit Union Administration and false entries in the books of a credit union, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
According to the four-count indictment returned on September 6, 2006 and unsealed today upon his arrest, Shives was the assistant manager of City, County and State of Allegany County Federal Credit Union (CCSAC) located in Cumberland, Maryland. Loan and collection officers reported to him. CCSAC was required to make quarterly reports called “Form 5300" to the National Credit Union Administration regarding the financial status of the credit union, including loan delinquencies.
The indictment alleges that from 1999 to 2003, Shives manipulated the process of making, recording and collecting loans for certain customers in an effort to conceal the loan delinquencies and outstanding balances of certain CCSAC customers, so that he could continue his job as assistant manager with the prospect of becoming the CCSAC manager. Shives required certain CCSAC customers to sign blank loan documents which Shives completed whenever those customers became delinquent in loan payments, in order to extend new credit or re-finance old loans. Shives made loans with inadequate, inflated or non-existent collateral to customers whose previous loans were delinquent and who had inadequate credit history. Shives caused certain customers not to receive quarterly loan statements or delinquent notices. He caused collection officers not to call delinquent customers. Shives caused the quarterly reports to the National Credit Union Administration to falsely understate the number and amount of outstanding delinquent loans. Finally, Shives caused income of the credit union to be overstated in the 5300 Reports to the National Credit Union Administration.
The indictment alleges that such corrupt extension, reporting and collection of loans was discovered in a routine audit by the National Credit Union Administration in 2003, resulting in write downs and charge offs to the assets of CCSAC of about $2 million.
Shives faces a maximum sentence of 30 years in prison followed by three years of supervised release for making false statements to the National Credit Union Administration and for making false entries in the books and records of CCSAC. The maximum fine is $1 million. Shives had his initial appearance at 1:30 p.m. today in Baltimore federal court.
An indictment is not a finding of guilt. An individual charged by indictment is presumed innocent unless and until proven guilty at some later criminal proceedings.
United States Attorney Rod J. Rosenstein praised the investigative work performed by the Federal Bureau of Investigation. Mr. Rosenstein thanked Assistant U.S. Attorney Joyce McDonald, who is prosecuting the case.
This page last modifiedSeptember 8, 2006