RICHMOND, Ind. The former CEO of the now defunct Richmond City Employees FCU has been sentenced to two years in federal prison after he pleaded guilty to two counts of bank fraud.
According to court documents, Daniel Johnson, 37, in August and September of 2021, Johnson submitted two applications for secured loans for $150,000 each, claiming the loans were intended to purchase recreational vehicles. Yet, Johnson never purchased a vehicle with the loan money, prosecutors said.
As an RCEFCU official, Johnson was permitted to apply for loans, but the applications had to be reviewed and approved by board. Johnson falsely represented that the board of directors had approved his loans, even though no approval had been given, the documents alleged, according to a statement from prosecutors.
Johnson used part of the loan money to pay off previously secured RCEFCU loans totaling about $65,697; in doing so, Johnson removed the security interests in the loans, court documents said.
‘Lined His Own Pockets’
“As the chief executive officer, Johnson was tasked with protecting money earned by hardworking public servants for the City of Richmond. Instead, Johnson chose to abuse this trust and line his own pockets through dishonesty,” Tom Wheeler, U.S. Attorney for the Southern District of Indiana, said in a statement. “His actions not only violated the law but also undermined the integrity of the institution he was entrusted to serve. The U.S. Attorney’s Office and our law enforcement partners will continue to hold accountable those who exploit positions of authority for personal gain.”
Officials said Johnson used the rest of the funds to pay off credit card debt, student loans and the mortgage on his home.
Additional Losses and Sentencing
He also violated further policies by forging his wife’s signature to make it appear that she had requested the second loan in September. In total, RCEFCU lost about $285,855, according to court documents.
Johnson will serve two years in federal prison and two years of supervised release. He will also have to pay $285,855.66 in restitution.
Richmond City Employees Federal Credit Union was merged into Ohio-based Kemba Financial Credit Union in 2023.
