Former Indiana credit union CEO sentenced to prison for bank fraud

The former CEO and manager of Richmond City Employees Federal Credit Union has been sentenced to two years in federal prison after pleading guilty to two counts of bank fraud.

The U.S. Attorney’s Office for the Southern District of Indiana said Wednesday that Daniel Johnson must also pay more than $285,000 in restitution.

Johnson, 37, of Centerville, was charged last March after he was accused of falsifying two loan applications to secure hundreds of thousands of dollars from the credit union for his own personal use.

The applications, filed on Aug. 5, 2021 and Sept. 16, 2021, claimed the funds were intended for the purchase of recreational vehicles. Each loan was valued at $150,000.

The applications were supposed to be reviewed and approved by the credit union’s board of directors, but Johnson falsely stated that the board had given its approval. He used a portion of the funds to pay off previously secured loans, using the remainder to pay personal debts, including student loans, and to purchase a home, according to the U.S. Attorney’s Office said.

The credit union suffered losses estimated at $285,855.66.

“As the Chief Executive Officer, Johnson was tasked with protecting money earned by hardworking public servants for the City of Richmond. Instead, Johnson chose to abuse this trust and line his own pockets through dishonesty,” U.S. Attorney Tom Wheeler said in a news release. “His actions not only violated the law but also undermined the integrity of the institution he was entrusted to serve.”

In 2022, Richmond City Employees Federal Credit Union was placed into conservatorship by the National Credit Union Administration in response to “unsafe and unsound practices at the credit union.” The NCUA did not provide specific details of those practices, and it is not clear if the conservatorship move was related to Johnson’s actions.

The credit union was acquired by Ohio-based Kemba Credit Union in 2023.