Former Southern Pine Credit Union Finance Officer Sentenced to Prison

VALDOSTA, Ga. – The former Controller of Southern Pine Credit Union in Valdosta was sentenced to serve five years in prison and pay back more than $1.2 million in restitution after she admitted to a long-running bank loan and aggravated identity theft scheme.

Teresa Paulo, of Valdosta, was sentenced to serve 24 months imprisonment for aggravated identity theft and 36 months imprisonment for bank fraud to be served consecutively for a total of 60 months in prison on Sept. 12. In addition, Paulo was ordered to pay $1,238,638.29 in restitution to Southern Pine Credit Union. Paulo pleaded guilty to these charges on Nov. 2, 2023.

Leah Lehman, 63, of Valdosta, was sentenced to serve 24 months imprisonment for aggravated identity theft and 48 months imprisonment for bank fraud to be served consecutively for a total of 72 months in prison 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 these charges on Oct. 26, 2023.

U.S. District Judge W. Louis Sands is presiding over these cases. The defendants are not eligible for parole.

“Financial fraud has a far-reaching ripple effect that negatively impacts people, businesses and the community,” said U.S. Attorney Peter D. Leary. “We take financial crimes seriously, and we will work alongside our law enforcement partners to hold fraudsters accountable.”

“These sentencings are 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. “The defendants’ 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 these cases represent 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 and statements referenced in court, Paulo was Southern Pine Credit Union’s (SPCU) controller from Oct. 2011 to June 2020 and Lehman served as President of SPCU from 1990 to 2020. The Credit Union’s members are employees of the local paper mill and their families.

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.

These cases were investigated by the FBI and the Federal Deposit Insurance Corporation, Office of Inspector General (FDIC OIG).

Assistant U.S. Attorney Hannah Couch prosecuted these cases for the Government