2 women charged with em­bez­zle­ment

The Maui News - - NEWS - By LILA FUJIMOTO Staff Writer

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.

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