How a Former Employee Bled a Credit Union Dry and Spent the Cash on Jewelry, Houses, and a Timeshare in Cabo
This past October, the Women's Southwest Federal Credit Union closed its doors. It was tiny, with just 743 members and $2 million in assets, but more important was its balance sheet. The National Credit Union Administration determined WSFCE was insolvent and had to liquidate.
That's when federal regulators began poking around in the credit union's books and discovered that an employee, Theresa Portillo, had managed to embezzle $3.4 million from the organization.
Portillo didn't steal the money all at once but played a longer game, stretching it out over more than a decade. Starting in 2001, she began contacting other financial institutions and offering to sell them certificates of deposit. The purchaser was instructed to make payment to the credit union's Chase bank account.
Credit union officials knew of the account but presumed it inactive, leaving Portillo in control. She would then transfer the funds to a credit union account Portillo had created under the name of Rachel Hanson, who doesn't actually exist. She did this with at least 18 CDs.
Portillo spent the cash on jewelry, cars, vacations, and the like, but she didn't squander all of it. A lot she poured into her rental properties, purchasing at least nine homes in the Dallas area.
This all caught up with her when the credit union folded. She agreed on Tuesday to plead guilty to embezzling funds from a credit institution. She faces a maximum 30 years in prison and $1 million fine, plus restitution.