- Leah Lehman, 63, of Valdosta, was sentenced to serve a total of 48 months in prison.
- Lehman was ordered to pay $4,491,253.97 in restitution to Southern Pine Credit Union.
- Read the news release to see what led to the charges.
U.S. Attorney’s Office, Middle District of Georgia News Release:
The former President of Southern Pine Credit Union in Valdosta was sentenced to serve four years in prison and pay back nearly $4.5 million in restitution after she admitted to a long-running multimillion-dollar bank loan and aggravated identity theft scheme.
Leah Lehman, 63, of Valdosta, was sentenced to serve a total of 48 months in prison (24 months per count, to be served consecutively) to be followed by two years of supervised release on May 30. In addition, Lehman was ordered to pay $4,491,253.97 in restitution to Southern Pine Credit Union. Lehman pleaded guilty to one count of bank fraud and one count of aggravated identity theft on Oct. 26, 2023.
Co-defendant Teresa Paulo, of Valdosta, pleaded guilty to one count of bank fraud and one count of aggravated identity theft on Nov. 2, 2023. Paulo faces a maximum of 30 years in prison for bank fraud, and a mandatory two years in prison in addition to any other prison term imposed for aggravated identity theft, to be followed by a maximum of five years of supervised release and a $1,000,000 fine. Sentencing is scheduled for July 11.
U.S. District Judge W. Louis Sands is presiding over this case. The defendants are not eligible for parole.
“Lehman chose greed and deception, abusing her trusted leadership role to steal millions of dollars at this credit union over the course of many years,” said U.S. Attorney Peter D. Leary. “Our office, alongside our law enforcement partners, take financial crimes seriously, and we will work to hold fraudsters accountable.”
“This sentencing is the direct result of a diligent investigation by hardworking FBI employees and our partners at the Federal Deposit Insurance Corporation, Office of Inspector General,” said Rich Bilson, Senior Supervisory Resident Agent of FBI Atlanta’s Valdosta office. “Lehman’s greed driven scheme stole hundreds of thousands of dollars and damaged the financial security of innocent victims. They will now be held accountable for their blatant misuse of the power of their positions.”
“The criminal behavior in this case represents the most egregious betrayal of trust by two of this institution’s leaders, resulting in years of ill-gotten gains for the defendants, all while violating the faith that SPCU’s members placed in them,” said Kyle A. Myles, Special Agent in Charge of the Federal Deposit Insurance Corporation, Office of Inspector General, Atlanta Region. “We are grateful to our regulatory and law enforcement partners in this case and will continue to vigorously investigate allegations of financial crime at FDIC-supervised institutions and in support of our fellow financial regulators.”
According to court documents, Lehman served as President of Southern Pine Credit Union (SPCU) in Valdosta from 1990 to 2020. Paolo was SPCU’s controller from Oct. 2011 to June 2020. The Credit Union’s members are employees of the local paper mill and their families. Lehman and Paolo were both authorized to originate all types of loans, were responsible for filing quarterly reports to the National Credit Union Administration (NCUA) and had access to all SPCU employees’ usernames and passwords for all SPCU computers and software.
Lehman began her fraud in June 2003, when she created a share secured loan in a SPCU account using the name and social security number of a member without that individual’s knowledge. From Feb. 2012 to May 31, 2020, Lehman paid off the loan and rebooked it multiple times with additional advances. She would take the proceeds and put them in a joint share draft account she had with the individual, using the proceeds to pay for a boat, a hunting club share, personal expenses and gifts to family members. This loan was repaid in full. However, Lehman created another share secured loan in another individual’s name without their knowledge and would also pay off the loan and rebook it multiple times for personal spending. To conceal these activities, Lehman created false credit transactions using the names and passwords of SPCU employees. These transactions would advance the due date on the loans, which prevented these loans from appearing on quarterly call reports to the NCUA and allowed Lehman to defer or not make payment on these loans. Following these transactions, Lehman created debit entries to put the loans back on the accounts, which would often include interest accrued on the outstanding loans. She made additional fraudulent loan advances simultaneously with those entries to advance the loan dates. She reflected the loans as being paid off at the end of the quarter to prevent possible detection of artificial growth in the SPCU loan portfolio. In total, the drafts needed to pay off the loan balances at each quarter grew to $4,112,870.63, excluding payments and interest, as of May 31, 2020.
Paulo committed a similar fraud scheme to Lehman. In Oct. 2011, Paulo created a share secured loan in a SPCU account using the name and social security number of a member without that individual’s knowledge. From Nov. 2011 until May 29, 2020, Paulo took out additional advances on the loan as well as additional loans from the account. Paulo would transfer the loan proceeds into a joint account for personal spending purposes. She created another share secured account using the personal identity of another individual and would pay off the loan and rebook it multiple times with additional advances, using the proceeds for her own personal expenses or electronically transfer money into her family’s accounts. Paulo concealed her schemes as Lehman concealed hers: creating false credit transactions using the usernames and passwords of SPCU employees to simulate the payoff of the loans, which would advance the due date on the loans. Paulo also created debit entries using other people’s usernames and passwords to put the loans back on the accounts, which would often include interest accrued on the outstanding loans. The drafts needed to pay off the loan balances at each quarter grew to $1,233,201.77, excluding payments and interest, as of May 31, 2020. Paulo made $7,736.16 in legitimate payments to the loan balances.
The case was investigated by the FBI and the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC OIG).
Assistant U.S. Attorney Hannah Couch is prosecuting this case for the Government.
