Former manager pleads guilty to million dollar Ontario credit union fraud
The trial of a Belleville, ON woman charged in a million-dollar credit union theft was cut short on Wednesday, June 19 when the former manager changed her plea to guilty on two of three charges.
Cheryll Drumm pleaded guilty to fraud over $5,000 and money laundering, while a charge of theft over $5,000 was withdrawn, reports Quinte News.
Drumm had originally pleaded not guilty to all three charges, but changed her mind on day two of her trial, after speaking with her lawyer John Wonnacott that afternoon.
Evidence on the first day of the trial showed Drumm moved and manipulated funds through various accounts, while working at Bayshore Credit Union in Belleville, to benefit herself and others.
Two co-accused, Alan Lasher and George Misuraca have agreed to pay civil restitution in order to have their criminal charges dropped and court heard both are still involved in civil suits, which have had a major financial impact on them.
During the hearing, Wonnacott also noted that while Drumm did admit to taking close to $90,000 for herself over a four-year span, she received no benefit or kickback for helping to advance Lasher and Misuraca more than $800,000 and $500,000 respectively.
That spurred Justice Robert Scott, who took over from Justice Wolf Tausendfreund when the plea deal was struck, to ask if Wonnacott “saw his client as a modern-day Robin Hood”.
In her opening statement, Assistant Crown Attorney Jodi Whyte said that between January 2010 and December 2014, Drumm manipulated software and transferred funds to benefit both herself and the co-accused, to the tune of more than $1.6 million..
Bayshore Credit Union has since amalgamated with QuintEssential Credit Union to become Quinte First Credit Union.
Whyte said that since Drumm was an employee of the credit union and couldn’t deal with her own account, she manipulated the software to put funds into her granddaughter’s account and then transfer that money to herself.
Former Bayshore Credit Union CEO Joe Bell testified about how cheques are cashed and money is moved between various financial institutions and explained how the accounting discrepancies were noticed.
Bell, who now works for Quinte First, said the credit union was tipped off that something was wrong when Central 1 Credit Union, which handled Bayshore’s accounts, said the credit union had gone over the limit on an operating line of credit.
He said an investigation showed multiple instances of certified cheques being recorded as “duplicated.” They were linked to Drumm, whose main job was to process paper or electronic transactions, such as cheques or electronic transfers, including pay cheques and pension payments. Bell said those duplicated amounts were found to be false and Drumm was suspended with pay, pending an internal review of the situation.
The police probe began in October, 2015 and charges were laid in May, 2016.
Whyte presented records of account activity showing that pay cheques and pension payments from other credit union members were funnelled into the account of Drumm’s granddaughter and then covered through Bayshore’s hold account.
Those records also included an employee number linked to Drumm, showing she overrode some automated systems in order to put the money transfers through.
When asked by Justice Wolf Tausendfreund why those transactions weren’t recognized earlier, Bell said that things “clearly weren’t scrutinized as closely as they needed to be.”
Bell added that the credit union’s internal audit procedures have been “changed dramatically” and it has changed some of its systems to ensure that transactions can’t be manipulated.
In requesting a pre-sentence report, Justice Scott said “there didn’t appear to be any bad habits linking Drumm to that kind of activity” and he wanted “to see the relationship with the co-accused explained in a little more detail.” That report will be presented ahead of a sentencing hearing on October 11, 2019.