Sherry Ann Allen Sentenced to Serve 51 Months in Prison for Embezzlement and Tax Evasion
Allen was former CEO of Greater Eastern Credit Union
GREENEVILLE, Tenn. – On September 25, 2018, Sherry Ann Allen, 49, of Johnson City, Tennessee, was sentenced by the Honorable J. Ronnie Greer, U.S. District Court Judge, to serve 51 months in federal prison, as a result of her June 2018 plea of guilty to theft by a credit union officer or employee and tax evasion. 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.
In November 2017, the Johnson City Police Department (JCPD) contacted members of the Greater Eastern Credit Union (credit union) management team after it received information regarding an abnormality in the payment to a vendor. JCPD provided the details and credit union personnel conducted an internal review of the transaction, which 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. 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. She 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 donated some of the stolen money 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.
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.
“The prosecution of individuals who intentionally conceal income and evade taxes is a vital element of the IRS' enforcement strategy,” said Matthew D. Line, Special Agent in Charge. “No matter the source of income, all income is taxable, including embezzled funds. When a bank executive, such as Ms. Allen, misuses their position, it violates the public trust and puts the financial stability of the institution at risk. IRS Criminal Investigation is committed to using our forensic accounting skills to help unravel complex fraud schemes, to investigate and prosecute individuals who attempt to enrich themselves by fraudulent means, and to help put a stop to this and other types of white collar crime."
"Solid partnerships in law enforcement are key to the success of our mission, said Troy Sowers, Special Agent in Charge of the FBI's Knoxville Field Office. The Johnson City Police Department and the IRS-Criminal Investigation agents worked tirelessly with us to help bring the accused to justice. I thank them for their efforts and look forward to working future cases."
Agencies involved in this investigation included the FBI, IRS-Criminal Investigation and Johnson City Police Department. Assistant U.S. Attorney Robert M. Reeves represented the United States in court proceedings.