Former credit union manager indicted on fraud charges

IL file photo

A former manager of a credit union branch manager has been charged with bank fraud after investigators say she stole more than $350,000 from customer accounts at the Indianapolis branch she oversaw.

Teresa Palmer was indicted on four charges of bank fraud July 24 in U.S. District Court in the Southern District of Indiana. Palmer pleaded not guilty to the charges. Prosecutors did not ask for pretrial detention, and Palmer was released pending further court proceedings, court documents show. A jury trial has been set for Sept. 22.

Palmer’s attorney, federal public defender Dominic Martin, told IBJ he is unable to comment on pending litigation, per his office’s policy.

The indictment filed in the case identifies Palmer’s former employer generically—only as “Credit Union 1,” which it described as a financial institution that has branches throughout Indiana and whose headquarters is within the court’s Southern District of Indiana jurisdiction. (The generic reference in the indictment is not to an actual credit union that is named Credit Union 1, an organization based in the Chicago area that has a presence in northwest Indiana.) The indictment does not name Palmer’s age or her city of residence.

An internet search indicates that Palmer worked for Columbus, Indiana-based Centra Credit Union.

In response to an IBJ query, Centra sent a statement that provided some details but did not identify Palmer by name. In the statement, Centra uses the word “members” to refer to those prosecutors describe as “customers” in the indictment. Centra also uses “team member” when describing “employees.”

“At Centra, our top priority is our members,” the statement said. “When we uncovered a situation in which a former team member was suspected of taking advantage of the trust some members placed in them, we immediately took steps to address the issue. The team member is no longer with the organization, and we are actively working with the FBI on an ongoing investigation. Our impacted members are aware of the situation and have not incurred any losses. We will continue to practice the strong internal controls that helped us identify this situation.”

According to the indictment, Palmer served as branch manager for the credit union’s Indianapolis branch, 4562 N. Shadeland Ave., from 2014 until December 2022.

Between Jan. 7, 2021 and Dec. 9, 2022, the indictment alleges, Palmer made “hundreds of unapproved transactions” in which she withdrew a total of more than $350,000 from targeted customer accounts.

“As the branch manager, Palmer knew which Credit Union 1 customers were elderly and unable to regularly monitor their accounts,” the indictment alleges. “Palmer targeted these accounts for her scheme.”

In some cases, the indictment alleges, Palmer withdrew cash directly from customer accounts without those customers’ knowledge or permission. In other cases, Palmer allegedly created fake cashier’s checks that drew from customer accounts and were payable to third parties. Palmer then cashed the checks herself or directed fellow employees to cash the checks, falsely claiming that she was acting at the customer’s request, the indictment says.

Prosecutors allege that Palmer used the funds for her own personal expenses, including gambling.

According to federal sentencing guidelines, bank fraud carries a penalty of up to 30 years in prison and/or a fine of up to $1 million.

Chartered in 1940 as the Cummins Employees Federal Credit Union, the credit union changed its name to Centra in 1995. The credit union currently has $2.2 billion in assets, more than 152,000 members, 423 full- and part-time employees, and 29 locations in Indiana, North Carolina and New York.

Clarification: This story has been updated to clarify that the generic reference in the indictment to Credit Union 1 is not related to an actual credit union that is named Credit Union 1, an organization based in the Chicago area that has a presence in northwest Indiana.