2 women charged with embezzlement
Two former employees were arrested Monday on a federal indictment charging them with embezzling more than $1 million over seven years from a now-closed federal credit union on Molokai.
Allennie Naeole, who is also known as Kalai Naeole, 55, of Kaunakakai and Janell Purdy, 40, of Wailuku were arrested after a federal grand jury returned a 15-count indictment against them Wednesday. Both women are charged with embezzling and conspiring to embezzle funds from First Hawaiian Homes Federal Credit Union in Hoolehua from June 2008 to December 2015.
According to the indictment, Naeole and Purdy were the only two permanent employees of the credit union and were responsible for conducting all of its banking transactions and maintaining its books and records, according to a news release from the U.S. attorney’s office. From at least 2007, Naeole was the manager and Purdy was the customer service representative and teller at the credit union, according to the indictment.
The indictment alleges that the two issued checks from First Hawaiian Homes accounts to pay personal expenses, including credit card bills and car payments for Naeole and her family members.
Naeole and Purdy also withdrew more money than was on deposit in their own bank accounts and those belonging to their family members, and used the money to pay personal expenses, according to the news release.
“The withdrawals created negative balances in the accounts, which Naeole and Purdy concealed by making fictitious entries in First Hawaiian Homes’ records,” the news release says.
Naeole took steps to conceal the embezzlements from First Hawaiian Homes’ board of
directors and the National Credit Union Administration, which insured its assets, the indictment alleges. It also alleges that Naeole falsified records, created a letter that had a forged signature and falsely claimed that First Hawaiian Homes had assets at another bank, and created a fictitious email account to communicate with the NCUA.
In December 2015, NCUA liquidated First Hawaiian Homes Federal Credit Union and discontinued its operations after determining the credit union was insolvent and had no prospect for restoring viable operations, according to an NCUA news release.
The credit union, chartered in 1937, was serving nearly 1,400 members when it was liquidated.
Molokai Community Federal Credit Union of Kaunakakai assumed First Hawaiian Homes’ assets, member shares and most loans.
Naeole and Purdy are each charged with one count of conspiracy and six counts of embezzlement. Naeole is also charged with one count of making a false document and one count of aggravated identity theft.
After being arrested on Maui, Purdy was taken to U.S. District Court in Honolulu, where she pleaded not guilty to all charges and was released on a $25,000 bond. Her trial was set for Jan. 9 before U.S. District Judge Derrick Watson.
Naeole, who was arrested on Molokai, was to be arraigned today in federal court.
If convicted, Naeole and Purdy face up to 30 years in prison and a $1 million fine for each embezzlement charge and up to five years in prison and a $250,000 fine for the conspiracy charge. Naeole also faces up to five years in prison and a $250,000 fine if convicted of the false document charge, and a mandatory two-year prison term and fine of $250,000 if convicted of the aggravated identity theft charge.
The case was investigated by the Federal Bureau of Investigation and the Treasury Department, Office of Inspector General, with assistance from the Maui County Police Department.