James T. Jacks
Acting United States Attorney
Northern District of Texas

OFFICER AT TXDOT CREDIT UNION IN WICHITA FALLS, TEXAS,
SENTENCED TO NEARLY SIX YEARS IN FEDERAL PRISON
FOR EMBEZZLEMENT SCHEME

WICHITA FALLS, Texas — Joanna Lynn McGee was sentenced today by U.S. District Judge Reed O’Connor to 71 months in prison and ordered to pay $2,063,891 in restitution, announced acting U.S. Attorney James T. Jacks of the Northern District of Texas. McGee, 40, pled guilty in November to one count of embezzlement of funds from a credit institution. At today’s sentencing hearing, Judge O’Connor remanded McGee to the custody of the U.S. Marshals Service to begin serving her sentence.

From 2001 through May 2008, McGee was an officer of the, now defunct, Texas Department of Transportation (TXDOT) - Wichita Falls Credit Union. The Court found that during that time, McGee embezzled and stole more than $2 million. McGee admitted using those funds for her own benefit, as well as for the benefit of family members and other individuals.

She created approximately 129 fictitious loans and then used advances from these bogus loans to generate funds, which she later embezzled and also used to conceal her scheme. As a result of these 129 bogus loans, McGee caused the unauthorized funding of approximately $3.1 million in loans at the credit union. According to auditors, the embezzlement ultimately caused the insolvency of the credit union.

Some fictitious loan proceeds were used to make payments on her credit cards. She also received loan proceeds by cashing fraudulent disbursement checks which she had issued on those phony loans. In addition, she caused additional loan proceeds to be transferred into her credit union account by causing numerous advances to be made on the bogus loans. To keep the scheme going, she also regularly used loan advances on some of the fictitious loans to make payments on other fictitious loans.

In a related case, defendant Mandi Nicole Shook, also a former officer at TXDOT Wichita Falls Credit Union, pled guilty to the same offense. She admitted embezzling at least $52,777 from the institution while she was employed there from 1999 through June 2008. She is scheduled to be sentenced by Judge O’Connor in Wichita Falls on July 10, 2009.

The cases were investigated by the FBI. Assistant U.S. Attorney David L. Jarvis is the prosecutor.

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