Ben Alan Diveley Arraigned and Pleads Guilty in U.S. Federal Cour
The United States Attorney's Office announced that during a federal court session in Missoula on June 15, 2010, before U.S. Magistrate Judge Jeremiah C. Lynch, BEN ALAN DIVELEY, a 34-year-old resident of Helena, was arraigned and pled guilty to credit union embezzlement, money laundering and identity theft. Sentencing has been set for September 24, 2010. He is currently released on special conditions.
In an Offer of Proof filed by First Assistant U.S. Attorney Carl E. Rostad, the government stated it would have proved at trial the following:
On April 29, 2010, the Helena Community Credit Union (HCCU) discovered that one of their loan officers, DIVELEY, had conducted questionable financial transactions. Upon further inquiry, the HCCU determined that DIVELEY had embezzled at least $76,962 from the Credit Union.
DIVELEY had been employed as a loan officer for the HCCU for five years. During his employment, he had applied for and been approved for a line of credit from which he was allowed to make withdrawals anytime he wished up to the amount of the credit line. An auditor had discovered in April of 2010 that DIVELEY had written himself a check off this line of credit. It was contrary to HCCU policy to conduct the withdrawal directly; any such draw on the line of credit must be made by and through another credit union representative. HCCU employs software safeguards to block employees from being able to conduct such transactions on their own loan accounts. When such a transaction is attempted, the employee sees a screen on their computer telling them that they are not allowed to do the transaction they are attempting. However, when a check was found to have been written by DIVELEY, to himself, the credit union discovered that DIVELEY had circumvented the security software by using a co-worker's computer to alter the computer blocks to allow him to issue the check to himself. When the HCCU discovered how this had happened, DIVELEY was confronted, confessed, and was terminated.
After DIVELEY's departure, a box of documents was found in his office. In examining some of these documents, the HCCU officers discovered two loans files that appeared suspicious. In looking at these loans it appeared that the funds from at least one of these loans had been deposited in an account belonging to or controlled by DIVELEY.
As HCCU officers attempted to confirm information from the loans, they found names, dates of birth, and social security account numbers that did not correlate to borrower identification. A closer audit found one of the loans had been made for $50,000 in the name of an individual, identified here as "Z.P.", had been "secured" with a Certificate of Deposit belonging to another member. A Helena address used on the loan. The $50,000 had been deposited into an "L8, Secured Shares" account belonging to "Z.P." that had been opened on the same day, September 15, 2009. The money was then transferred that same day from the "Z.P." account to a second savings account belonging to an individual identified here as "B."A.", a savings account opened on September 9, 2009.
On September 21st and September 23rd, 2009, these same funds were then transferred to a regular checking account belonging to "B.A.", and then by on-line bill payment to Target National Bank, Sears, Macys, Chase, and Bank of America on accounts related to DIVELEY. These payments took place between September 22nd and September 24th and totaled $49,915.99, with the largest payment going to Bank of America for $31,924.76 on September 24th.
The second loan was found to have been made in the amount of $25,000 in the name of "B.A." and was deposited into the "B.A." account. This loan was originated on January 12, 2010. This loan was also secured by the same CD belonging to the HCCU member that was used to secure the "Z.P." loan. In following the money from this loan, it was found that the funds were transferred to DIVELEY's own personal checking account in three transactions: $7,500 on January 13, 2010, $8,500 on January 14, 2010 and $9,000 on January 15, 2010. From DIVELEY's account the funds were transferred to various on-line payments, checks and loan payments between January 14th and January 29th in a total amount of $25,347.92. They also noted that this loan also had the same address as the "Z.P." loan.
In addition to the two fraudulent loans, HCCU determined that DIVELEY had misdirected a number of "loan origination fees" and "loan payoff fees" to his own account. Initially, HCCU found seven transactions when the diversion had taken place for a total of $1,962. The fees, under HCCU policies in place at the time, were to have been waived for their customers.
DIVELEY had been making payments on the "Z.P." and "B.A." loans at the time of their discovery.
The Helena Police Department began researching the information on the two loans to determine if the "Z.P." and "B.A." information related to real individuals or was completely fabricated. HPD determined that the Lode Street address did not exist. HPD could find no record of either "Z.P." and "B.A." in Helena or statewide that had the dates of birth or social security account numbers listed on the two loan documents.
HPD did determine that the social security number on the "B.A." loan was assigned to a woman in Ohio, but that DIVELEY would not likely have had access to her account number, and therefore concluded that when DIVELEY created the number for the loan its match to a legitimate account number was merely coincidental.
The HCCU customer whose Certificate of Deposit was used to secure the two fraudulent loans was interviewed. He advised that he did not know anyone by the names "Z.P." or "B.A." and that he had never authorized anyone to use his CD as collateral for any loans. He stated that a person whose name was "Ben," at HCCU, was his "go-to guy at the credit union," and that he had recently obtained a car loan through Ben. The customer indicated that the loan would have been taken out around January 11th or 12th, a date that corresponds to the "B.A." loan.
When interviewed, DIVELEY admitted that he had made the two fraudulent loans and forged the HCCU customer's signature to those loans in order to use his CD as collateral. He had advised that the "Z.P." and "B.A." names and identifying information had been made up and that the money had been used to pay off bills he had acquired in overspending. DIVELEY was not specifically asked by HCCU about the diversion of loan fees but denied that he had done anything other than the two fraudulent loans.
DIVELEY faces possible penalties of 30 years in prison, a $1,000,000 fine and at least 5 years supervised release.
The investigation was conducted by the Federal Bureau of Investigation.
A copy of the Offer of Proof can be obtained by contacting Sally Frank at (406) 247-4638.