Assistant Vice President Sentenced to 33 Months in Prison
for Defrauding the South Jersey Federal Credit Union

CAMDEN – An assistant vice president of loss prevention for the South Jersey Federal Credit Union was sentenced to 33 months in federal prison today for her scheme to defraud the credit union of hundreds of thousands of dollars, U.S. Attorney Christopher J. Christie announced.

U.S. District Judge Noel L. Hillman also ordered Nora Phelps, 48, of Clementon, to pay $342,827 in restitution and to serve five years of supervised release, during which she is barred from employment that would give her the capacity to be responsible for financial transactions or accounts. Judge Hillman continued the defendant’s release on a $10,000 bond pending her surrender to officials with the U.S. Bureau of Prisons, on a date to be determined by prison authorities.

Phelps pleaded guilty before Judge Hillman to one count of bank fraud on June 27, 2008.

At her plea hearing, Phelps stated that in 1977 she accepted a job with the South Jersey Federal Credit Union (“SJFCU”) and over the years rose up the employment ladder, ultimately assuming the position of assistant vice president of loss prevention. As assistant vice president, Phelps admitted that she was responsible for, among other things, collecting delinquent loans and minimizing SJFCU’s risk of financial loss due to fraudulent activity. Phelps admitted that her job required her to have extensive access to and full knowledge of the SJFCU’s operating and information systems.

Phelps admitted that since at least 2005, she devised and implemented fraudulent methods to transfer SJFCU funds into accounts that she controlled. One of these methods consisted of diverting money collected by check or cash, primarily from credit union members making payments on charged-off loans, by depositing the funds into the accounts of some of Phelps’ family members, instead of posting the funds to the appropriate members’ loan accounts, she admitted. Phelps also removed funds out of the credit union’s general ledger account and caused the funds to be deposited into the accounts of her family members and then arranged for the funds to be transferred into her own account.

In determining the actual sentence, Judge Hillman consulted the advisory U.S. Sentencing Guidelines, which provide appropriate sentencing ranges that take into account the severity and characteristics of the offense, the defendant's criminal history, if any, and other factors. The judge, however, is not bound by those guidelines in determining a sentence.

Parole has been abolished in the federal system. Defendants who are given custodial terms must serve nearly all that time.

Christie credited Special Agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Janice K. Fedarck in Philadelphia, with the investigation leading to the guilty plea.

The Government is represented by Assistant U.S. Attorney Allen Harberg of the Criminal Division in Camden.

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Defense Attorney: John Eastlack, Esq. Washington Township

 

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