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Oct. 5, 2009

FORMER MANAGER OF HOUSTON LONGSHOREMAN’S FEDERAL CREDIT UNION #24 SENTENCED FOR FRAUD AND TAX EVASION

(HOUSTON) - Melinda Diane Andrews, 53, of Spring, Texas, has been sentenced to 135 months in prison for financial institution fraud against the Houston Longshoreman’s federal credit union and tax evasion, United States Attorney Tim Johnson announced today.

Andrews had previously pleaded guilty to creating a large volume of fraudulent loans in the names of members of the credit union, virtually all of whom worked as longshoremen at the Port of Houston. Andrews used the money members deposited in the credit union to fund the loans she created and concealed them from the Board of Directors by developing fictitious loan statements indicating that members had actually taken out the loans. She then took money from the loans she created and transferred the funds into share accounts and loan accounts of her family members. As Andrews created a fraudulent loan, she also applied a portion of the funds to pay off an earlier loan. From Jan. 1, 2000, until Feb. 28, 2006, Andrews made approximately 1,600 payments worth approximately $2,214,383 that were distributed to members of her family including herself, which represents the actual amount of money taken from the credit union. The total amount of loans was valued at approximately $7 million.

In February 2006, Andrews revealed her scheme to an auditor of the National Credit Union Association who insured the bank. The credit union failed shortly thereafter.

In 2004, Andrews reported taxable income in her federal income tax return of $91,193. However, she received unreported income from the above scheme of $236,508. Andrews knew she had received the benefit of this unreported income and failed to include it as reported income and did not pay taxes on that income.

Andrews has been permitted to remain on bond and will voluntarily surrender to a Bureau of Prisons facility in the near future.

The case was investigated by the Houston Field Office of the FBI and the IRS - Criminal Investigation Division. Assistant United States Attorney Quincy L. Ollison prosecuted the case.

 

 

 

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