Former Credit Union CEO pleads guilty in federal court
By Web staff
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SHREVEPORT, Louisiana (KTBS) — Helen Godfrey-Smith, 72, of Shreveport, has pleaded guilty before U.S. District Judge Elizabeth E. Foote to making and using a false document, U.S. Attorney Brandon B. Brown announced Tuesday.
A bill of information charging Godfrey-Smith was filed Nov. 15. She made her first court appearance on Dec. 6 and signed a plea agreement with the government. However, the court could not accept the guilty plea because Godfrey-Smith could not admit her guilt. Her attorneys asked for more time to discuss the matter and for the hearing to be continued.
Godfrey-Smith was back in court Monday. Foote accepted the plea this time after reviewing the facts of the case and thorough questioning of Godfrey-Smith. She remains free on a $25,000 bond.
Godfrey-Smith was employed by the Shreveport Federal Credit Union (SFCU) from 1983 to 2017 and during much of that time was employed as the chief executive officer (CEO) of the SFCU, a Shreveport-based financial institution under the regulation of the National Credit Union Administration (NCUA).
In October 2016, the SFCU, through Godfrey-Smith, entered into an agreement with the United States Department of the Treasury to buy back certain securities that were part of the Department’s Troubled Asset Relief Program (TARP). As part of that process, on Dec. 27, 2016, Godfrey-Smith signed and submitted to the United States Department of the Treasury an Officer’s Certificate which certified that all conditions precedent to the closing had been satisfied.
In reality, SFCU had not met all conditions precedent to closing and had suffered a material adverse effect. Unknown to the treasury and the NCUA, SFCU was in a financial crisis. From 2015 through 2017, another individual who was the SFCU chief financial officer had been falsifying call reports to the NCUA which included millions of dollars in fictitious fee income.
In addition, that CFO was creating fictitious entries in the banks records to support the false call reports. This created the illusion that SFCU was profitable when, in fact, the bank was failing. In addition, that person embezzled about $1.5 million from the credit union.
By the time Godfrey-Smith signed the officer’s statement, she had become aware of deficiencies at the credit union. Specifically, she had recently investigated and discovered that there were millions of dollars of fictitious entries on SFCU’s general ledger, and the credit union’s books were not balanced.
However, Godfrey-Smith failed to disclose this information to the treasury and signed the false officer’s statement. In the spring of 2017, the institution failed and it was taken over by regulators from the NCUA and placed into a conservatorship.
An investigation by the NCUA revealed that SFCU had amassed in excess of $10 million in losses by December 2016.
Godfrey-Smith faces a sentence of up to 5 years in prison, three years of supervised release, and a fine of up to $250,000. Sentencing is set for April 5.
The FBI, IRS-Criminal Investigation, and U.S. Department of Treasury–Office of Special Inspector General for the Troubled Asset Relief Program investigated the case. Assistant U.S. Attorney Seth D. Reeg prosecuted the case.
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