Workers’ thefts sank Molokai credit union

As teller and customer service representative, Janell Purdy was one of only two permanent employees of the now-defunct First Hawaiian Homes Credit Union on Molokai. The other was Allennie Naeole, who was FHHCU’s manager.

The government says over at least nine years, Purdy and Naeole stole more than $1 million from the credit union, leading to FHHCU’s insolvency, closing and liquidation.

Purdy, 40, pleaded guilty Wednesday in U.S. District Court to conspiring with Naeole between June 2008 and December 2015 to embezzle between $550,000 and $1.5 million from FHHCU. She faces a maximum five-year prison term at sentencing in July.

Naeole pleaded guilty to conspiracy and aggravated identity theft in February. She faces a mandatory two-year prison term plus up to five more years behind bars at her sentencing in June. Both women also must pay restitution. The government says it cost the National Credit Union Administration, which insured the Molokai institution’s deposits, more than $2 million to close and liquidate FHHCU.

Purdy and Naeole admitted that they issued and signed checks from the credit union’s financial accounts to pay for the personal expenses of Naeole and her family members, including to pay off credit card bills.

Assistant U.S. Attorney Rebecca Perlmutter told U.S. District Judge Derrick K. Watson that Purdy even issued and signed a check to an automobile dealership to pay for Naeole’s car.

Purdy told Watson that the thefts created negative balances in the accounts from which she and Naeole had drawn the money, to which Naeole made false deposit entries.

Naeole admitted she had been embezzling FHHCU funds as early as 2005. Her guilty plea to aggravated identity theft was for forging the signature of the Bank of Hawaii Molokai branch manager in a letter to the NCUA that falsely claimed that FHHCU had investments at Bank of Hawaii.

NCUA shut down FHHCU in December 2015 after determining that the institution was insolvent and had no prospect for restoring viable operations. Molokai Community Federal Credit Union immediately assumed FHHCU’s assets, member shares and most loans.

Just prior to its closing, FHHCU reported that it served 1,379 members and had assets of nearly $3.2 million.