by. Peter Strozniak

Carol Ann Ferraro, a former executive vice president at the $102 million Chaffey Federal Credit Union, will spend two and half years in federal prison for embezzling $968,000 from the Upland, Calif., credit union for more than six years.

She was sentenced Monday by Judge Virginia A. Phillips in U.S. District Court in Los Angeles. Phillips also ordered Ferraro to pay $1 million in restitution and placed her on a five-year term of supervised released after she serves her prison term.

Ferraro was hired by the Upland, Calif.-based Chaffey FCU in 1992, working her way up to executive vice president, becoming a knowledgeable, competent, trusted and experienced member of the credit union’s senior management team, court records said. But starting in January 2004, Ferraro began embezzling funds, according to the court records,

She was a “super-user” on the credit union’s core system, which allowed her to have full access to the system including the ability to update her own user privileges and to post to general ledger account and member accounts, according to documents. Even after she was caught, Ferraro attempted to conceal her embezzlement by creating false documents.

Prosecutors for the U.S. Attorney General’s Office said Ferraro used her executive position to conceal her embezzlement in several ways through manipulating payroll credits, shifting of general ledger outages and falsifying month-end reconciliations. Court records also revealed Ferraro used embezzled credit union funds to pay her bills and her daughter’s bills.

continue reading »