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Thursday, November 27, 2014
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Former Shiloh Manager Embezzled Millions, Then Killed Himself, Says NCUA Suit

NOV 19, 2013 5:25pm ET
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ALEXANDRIA, Va. — The late John DuPree Jr., former manager of Shiloh of Alexandria FCU, allegedly embezzled millions of dollars that led to the credit union's demise — and eventually his own — according to a civil complaint filed Tuesday by the National Credit Union Administration.

The $2.4 million credit union was liquidated by NCUA in April, at a time when its call report indicated capital and ROA were strong. NCUA filed the complaint in the U.S. District Court for the Eastern District of Virginia against the estate of the former SAFCU manager as well as his fiancé and business associate, Sharon Gonder.

Dupree's mother, Mary H. DuPree, is listed in the complaint as the administrator of the estate. NCUA will also be seeking a preliminary injunction to prevent the dissipation of estate assets while the litigation moves forward. NCUA is suing for $9.7 million in compensatory damages and is asking for punitive damages, as well.

The lawsuit paints a picture of a small CU manager who stole millions to pay for cars, real estate and gifts for his fiancé, and then took his own life one day before a scheduled meeting with NCUA to discuss discrepancies the agency had spotted in year-end accounting. It was a meeting in which DuPree apparently knew the agency was aware of his crimes, according to a note DuPree left behind.

NCUA discovered the message in the manager's CU computer.

"By the time you read this I will have taken my own life. I have been stealing money from Shiloh Credit Union for several years now. I have acted alone in this thievery. I betrayed the trust that everyone placed in me. Some of the funds were used to help those in need; however, most of the funds were used for sinful things. I repeatedly lied to everyone to cover up my thievery. I realize that whatever good things we have done over the years are discredited by my actions."

The small, 624-member credit union served members and employees of Shiloh Baptist Church, and had no paid employees. DuPree was the sole person responsible for posting transactions to the general ledger and maintaining the CU's financial records.

The suit alleges that DuPree and Gonder converted credit union funds for their own personal use through withdrawals from their jointly owned company, JD Payne Properties, without recording those withdrawals to the company's CU account.

To hide the ploy from examiners and members, DuPree did not "timely or accurately" post members' transactions to their accounts. He "falsified general ledger balances and replaced converted credit union funds with proceeds from CDs that were purchased by non-member participants," the suit states. DuPree did not post the non-member shares to the credit union's financial records.

DuPree's scheme began to unravel early this year when NCUA in March became aware of a discrepancy in the stated amount of non-member shares in the CU's year-end financial statement and the actual amount of non-member share deposits held by the credit union.

NCUA’s initial investigation revealed that Shiloh CU had millions of dollars in unrecorded non-member share deposits, and massive discrepancies in its stated cash on hand balance and share account balances, rendering the CU insolvent.

A spokesperson for NCUA declined to comment on the suit. A representative from Fiske & Harvey, an Alexandria, Va., law firm that is representing the agency in this litigation, also declined to comment.

According to the complaint, NCUA attempted to meet with DuPree on several occasions but the manager never followed through, including the last meeting scheduled on April 5, one day after DuPree died. DuPree who was 48 at the time of his death, is buried at Arlington National Cemetery.

DuPree took over as manager in 2009 after his father, John DuPree Sr., died. DuPree's father was the CU's original manger and founder, and served on the board with his wife, Mary.

In DuPree's final note he expressed feelings of guilt and remorse, and the inability to face the consequences of his actions. "I have disgraced my family, my great father's memory, church and community. The guilt is overwhelming and I am too big of a coward to face those that I have stolen from. I regret my actions, but [it] is far too late for forgiveness..."

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Comments (4)
A teachable situation for all....Crime eventually does not pay!
Posted by jvardallas | Wednesday, November 20 2013 at 9:51AM ET
Here we go again. A major fraud at a credit union under $10 million. Thank goodness we have stream lined examinations to make it easier for these credit unions. I'm sure the members are also thankful for that! It must be obvious by now that there is a serious flaw in the examination process. How many credit unions have been completely wiped out by fraud? Is anyone counting? Small credit unions are often one or two person operations. There is no segregation of duties. As a former CPA I can tell you that is a problem. You must expand your audit procedures to offset that weakness. Instead NCUA is doing the opposite.
Posted by henryw | Wednesday, November 20 2013 at 11:34AM ET
What evidence has the NCUA presented to support that Mr. Dupree typed the note on a computer located at Shiloh of Alexandria FCU. Based on my personal experience with the NCUA/AMAC, one cannot depend on them to always respond truthfully to an inquiry. I can cite at least one instance where the NCUA/AMAC mislead NCUA personnel regarding the existence of a relevant document in its Shiloh of Alexandria FCU files. It is quite possible that the NCUA/AMAC "planted" that note - or failed to disclose that the computer on which the note was allegedly found was unsecure and accessible to others. From my personal experience in dealing with the NCUA, my impression of them is that they are not paragons of virtue and truth. The NCUA/AMAC is staffed by contract employees according to information that I have been given. These people may have an incentive to find ways to deny legitimate claims submitted by depositors.

Just how much did can one steal from a small credit union with assets of less than 3 million.

Did you know that the NCUA is refusing to redeem over $100,000 worth of cd's because they claim that they could not find where the funds used to purchase the cd's were deposited in BB&T bank account used by this credit union? If Mr. Dupree,in fact, embezzled funds by not recording/depositing those funds as the NCUA claims, one would expect the NCUA to redeem the cd's in question as require by law. They are not doing so. Quite frankly, I think that the NCUA should be investigated by Department of Justice to determine if it is guilty of improprieties and/or violations of Federal, state or local statutes in the handling of the liquidation of the Shiloh of Alexandria FCU.
Posted by befamous | Thursday, August 28 2014 at 10:55PM ET
NCUA alleges that criminal acts were committed, so why hasn't it filed a criminal complaint or asked the DOJ to file one on its behalf against the alleged perpetrators?
Posted by befamous | Thursday, August 28 2014 at 11:26PM ET
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