ATCHISON, Kan.–A former credit union CEO who also served as a city commissioner and as mayor has been sentenced to prison for embezzlement from the CU.
Rita Hartman has been sentenced to 63 months in prison and ordered to pay more than $778,361.78 in restitution as the result of an embezzlement at what was then Muddy River Credit Union, which, during the time of Hartman’s crimes, served employees of the then Bradken foundry.
According to court documents, the Court recommends placement of Hartman in a medical facility, due to medical conditions, with that “placement as close to Atchison, Kansas as possible to facilitate family visits,” KAIR reported.
Upon release, Hartman will be placed on two-years of supervised probation.
On Feb. 4, of this year, Hartman, 70, pleaded guilty to one count of a 29-count indictment, charging false entries in federal credit institution records. For that plea, all other counts were dismissed, according to KAIR.
How Scheme Worked
The prosecution, in the sentencing document, says Hartman used “an array of false entries in
[the credit union’s] records to hide her tracks,” keeping the credit union’s “general ledger manually, in hard copy, which made it easier for her to conceal her theft,” the report stated.
Specifically, the indictment said that from at least 2010 through December 2021, Hartman used her position to steal money from Muddy River by crediting fraudulent deposits and loan payments to her or her relatives’ accounts or by stealing cash deposits, then concealing her conduct by altering Muddy River’s books and records, and falsifying information submitted to regulators.
A regulator-mandated audit, ordered in 2019, “immediately found discrepancies.”
Muddy River CU has since been merged into CommunityAmerica Credit Union, which is currently seeking to merge with Unify Financial Credit Union.
Served on CU Council
In addition to her civic roles, in 2013, Kansas’ governor appointed Hartman to the Kansas Credit Union Council, which advises the Kansas Department of Credit Unions on issues and needs of credit unions.
