Former Bank Employee Sentenced to Prison for Stealing Funds Held in Trust
|Aug, 30, 2011|
HOUSTON - Michele Lauryn Osteen, a former administrative assistant in the Trust Department of a Galveston branch of Frost Bank, has been sentenced to prison for bank fraud, United States Attorney José Angel Moreno announced today.
United States District Judge Lynn N. Hughes sentenced Osteen, who pleaded guilty to the offense in September 2010, to 12 months and one day in federal prison on Monday, Aug. 29. Additionally, the court ordered Osteen to serve a three-year-term of supervised release, pay restitution to the victim bank in the amount of $97,216.45 and undergo mental health counseling as a condition of her release.
The Trust Department of Frost Bank, an FDIC-insured depository institution, served as trustee for a number of different trusts, including trusts set up for the health, education, support and maintenance of minors and incapacitated adults, many of whom received large sums of money following severe injuries. As trustee for such trusts, the bank managed significant assets for those beneficiaries, which included paying their daily living expenses and making other disbursements on their behalves.
Osteen, 27, of Houston, fraudulently obtained funds from numerous trust accounts between June 2008 and June 2010 by requesting disbursements from the accounts in the form of Frost Bank checks, representing that the disbursements were legitimate expenditures typical for the trusts she helped manage, when in fact they were for her financial benefit.
Once Frost Bank issued the checks, Osteen requested checks be sent to her branch in Galveston, where she took possession of the checks and used them in various ways for her personal benefit. On some occasions, Osteen instructed Frost Bank to make the checks payable to companies, creditors and other entities to which she owed money and paid personal bills, debt and fines. On other occasions, she instructed Frost Bank to make the checks payable to Frost Bank or to a trust beneficiary, which she then used to obtain money orders she spent or deposited into her accounts. A few times she instructed Frost Bank to make the checks payable to a retailer, then used the funds for shopping at that retailer. Many times, she instructed Frost Bank to make the checks payable to a healthcare provider, which she then altered by typing an instruction on the checks to reflect that they were for cashier’s checks for “MLO,” a fictitious entity. Osteen then used those altered checks to obtain cashier’s checks from Frost Bank, which she deposited into her accounts.
To avoid detection, Osteen obtained the money orders and cashier’s checks at her Frost Bank branch, where she was known and therefore less scrutinized, but deposited them at a different Frost Bank branch in Galveston.
The FBI’s Texas City field office, with the assistance of Frost Bank, led the investigation leading to the charges. Assistant U.S. Attorney Stephen L. Corso prosecuted the case.