Credit union embezzler avoids prison

Credit union embezzler avoids prison
The judge will explain his reasons for leniency to the woman’s ex-colleagues
By Jack Moran
The Register-Guard


A former SELCO Community Credit Union assistant manager will not go to prison for embezzling more than $146,000, and it will be left up to a federal judge to explain to her former co-workers why he didn’t put her behind bars on Wednesday.

Acknowledging that he expected his ruling to be controversial, U.S. District Judge Michael Hogan sentenced 49-year-old Eugene resident Lenora Colburn to one year of home detention for the thefts, which helped fund her gambling addiction during an eight-year period between 2003 and 2011.

“No one comes out a winner in something like this,” Hogan said after explaining that he weighed “greed against (Colburn’s) level of addiction” in imposing a sentence that he felt was appropriate. Colburn’s compulsive gambling habit motivated the embezzlement scheme, the judge concluded.

Hogan ordered Colburn — a diagnosed pathological gambler — to spend the next five years on supervised release. During that time, she must serve 600 hours of community service and may not enter a casino or any other place where gambling is offered.

Colburn also must pay back the money she stole.

Two SELCO vice presidents spoke during Colburn’s sentencing hearing. Both joined federal prosecutors in asking Hogan to send Colburn to prison for stealing from the credit union while she worked as a supervisor and assistant manager at two Eugene branches.

Colburn worked for SELCO for 24 years before she was fired in May.

When she pleaded guilty to an embezzlement charge in October, Colburn admitted that she was able to use her position to conceal the thefts by creating bogus cash transactions, rigging internal audits and manipulating balances in cash drawers and vaults.

Babs Manion, SELCO’s vice president of operations and human resources, told Hogan that many of Colburn’s former employees and bosses remain distressed that a longtime co-worker was able to carry out an embezzlement scheme that lasted eight years.

“Huge collateral damage has been on the human side of this,” Manion said.

Hogan told SELCO representatives in court that he is willing to meet with credit union employees to explain his ruling “and give them a chance to say whatever they want to.”

Manion said afterward that SELCO would take up Hogan on his offer. “I think he’s the one who needs to explain this to them. I know that I can’t,” she said.

While prosecutors wanted Colburn sentenced to an 18-month prison term, her lawyer asked Hogan to put her on house arrest and order her to serve a five-year term of supervised release.

Attorney Kelly Beckley, who represented Colburn, pointed out that his client fully admitted the embezzlement shortly after SELCO discovered the loss — which he said simplified separate investigations completed by the FBI and the credit union.

Also, Beckley said Colburn is committed to repaying SELCO for the thefts. In court, Beckley held up a $77,000 personal check that he said Colburn wrote to the credit union after emptying her 401k retirement account.

“She is basically paying back today everything she has,” Beckley said.

Colburn last year enrolled herself in a 12-week gambling addiction treatment program that she completed successfully. She is participating in continuing treatment, Beckley said.

While reading a brief statement in court, Colburn said before she was sentenced that she is “very ashamed and remorseful for” the thefts.

Manion and Steve McIntire, SELCO’s vice president of administration, both said after court that while the credit union felt its internal theft controls were adequate when Colburn worked there, SELCO recently “centralized” its employee training program to take away some control from managers.

SELCO officials said Colburn circumvented many internal controls by intentionally training employees incorrectly.

SELCO’s accounts are insured by the National Credit Union Administration Board, an independent federal agency.