Former Bank President Guilty Of Bank Fraud

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A former bank president pleaded guilty to bank fraud on June 30, 2014, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. Paul C. Smith, 54, of East Alton, Illinois, pled guilty to the charges after having been indicted by the federal grand jury on November 20, 2013.

Documents filed in US District Court established that Paul Smith was employed by Laclede Community Credit Union (LCCU) from November 1977, until his resignation on June 29, 2012. During his tenure at LCCU, Smith held various positions, including that of President beginning in January 2012. In addition to working at LCCU, Smith also served as the treasurer for a credit union trade association. Smith held a debit card for the trade association’s bank account at LCCU.

Smith was convicted for making cash advances and purchases with his trade association credit card, but then manipulating the bank’s computers so that the expenses would not be reflected against the trade association’s account. In total, from 2007-2012, investigators identified $58,286.85 in purchases and ATM withdrawals that were incurred with Paul Smith’s trade association debit card. By manipulating the computer system, Smith concealed his embezzlement while causing LCCU to pay for personal expenditures made with the trade association’s debit card.

Bank fraud is punishable by not more than 30 years in prison, and/or a $1,000,000 fine, or both, restitution, and not more than five years of supervised release. However, the United States Sentencing Guidelines must be applied to the case and considered by the Court during sentencing. Smith will be sentenced in US District Court on September 29, 2014.

The investigation was conducted by agents from the US Postal Inspection Service. The case is being prosecuted by Assistant United States Attorney Steven D. Weinhoeft.