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Justice News

Department of Justice
U.S. Attorney’s Office
Western District of Virginia

FOR IMMEDIATE RELEASE
Tuesday, July 7, 2015

Former Lynrocten Federal Credit Union Manager Sentenced for Embezzlement, Bank Fraud, Aggravated ID Theft

Linda Sue Newcomb to Serve 120 Months in Federal Prison

LYNCHBURG, VIRGINIA – A Madison Heights woman, the former manager of the Lynrocten Federal Credit Union in Lynchburg who pled guilty in February to embezzlement, bank fraud and identify theft charges, was sentenced today in the United States District Court for the Western District of Virginia in Lynchburg.

Linda Sue Newcomb, 64, of Madison Heights, previously pled guilty to one count of embezzlement from a Federal Credit Union, two counts of bank fraud and one count of aggravated identity theft. Today in District Court, Newcomb was sentenced to 120 months in federal prison. Newcomb was also ordered to pay $11,733,683 in restitution, $500,000 of which is due immediately. Teresa Humphries, the former head bank teller at Lynrocten, previously pled guilty to related charges.

“To cover expenses incurred by herself  and her family members and to support an extravagant lifestyle, over the course of 14 years Ms. Newcomb stole from her employer, caused untold financial hardship to members of the credit union and betrayed the trust of others who relied upon her,” said Acting United States Attorney Anthony Giorno.  “In doing so, she forfeited her integrity and her reputation.  The sentence imposed today will provide some measure of compensation to the victims and will send a message that fraudulent conduct will be investigated and punished.”

According to evidence presented at previous hearings by Acting United States Attorney Anthony P. Giorno and Assistant United States Attorney Daniel Bubar, from as early as 2000, Newcomb and Humphries, who were the only two full-time employees of Lynrocten, carried out a scheme to defraud, embezzle and steal funds from the credit union’s accounts. The defendants carried out their scheme in a variety of manners.

Newcomb and Humphries originated loans in the names of credit union members without those members’ knowledge or consent, including forging the member’s name to fictitious loan documents. In order to make the loans look legitimate, they drafted the documents and Newcomb would approve them. They would then take the false loan proceeds and divert them to their personal accounts or use the money to pay off other fictitious loans.

In addition, Newcomb and Humphries transferred funds and wrote checks on certain credit union members’ accounts without their knowledge or consent, an act known as “Check Kiting.” At least three credit union members’ accounts were subject to check kiting. The two also attempted to hide their fraud by altering or withholding credit union member statements from delivery.

In all, the two caused more $12 Million in losses from the deposits of Lynrocten Federal Credit Union.

The investigation of the case was conducted by Federal Bureau of Investigation, the United States Secret Service and the Lynchburg Police Department.  Acting United States Attorney Anthony P. Giorno and Assistant United States Attorney Daniel Bubar are prosecuting the case for the United States.

Topic(s): 
Financial Fraud
Updated July 14, 2015