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Vicki Weidenhof pleaded guilty in federal court on Thursday to embezzling more than $187,000 from ALPS during the time she served as the credit union’s second-in-charge.
The former CEO of the credit union, James Wileman, was in the Anchorage courtroom when Weidenhof entered her plea.
“It was kind of an abstract experience,” Wileman said, “watching somebody you thought you knew admit to a crime you never would have imagined they could have committed. But it was nice to see at least it appears justice was being served.”
Wileman was CEO of ALPS from 2007 until 2009. He worked a total of 10 years at the credit union. He says Weidenhof already worked there when he started.
“We had a good working relationship,” he said. “(We) worked for two different CEOs together and then she worked for me when I had the opportunity to manage the credit union the last few years before my employment ended there.”
Wileman left at the end of 2009 when he and the board couldn’t reach a contract agreement. His departure was unconnected to the investigation of Weidenhof.
The federal investigation into the embezzlement first came to public light in March, when Weidenhof was fired. Prosecutors accused Weidenhof of taking money from the credit union’s general ledger accounts and putting the money into her personal accounts.
Al Strawn is the interim CEO of ALPS. He says other employees of the credit union first raised the alarm when they were trying to verify information on a routine transaction.
“And they discovered what they thought were unusual transactions on Vicki’s account, and notified me, and we began to explore it further, and it became real obvious there was a pattern of misappropriation of funds,” he said.
Strawn – who also is permanent CEO of the Matanuska Valley Federal Credit Union – was in Palmer when he was notified of the problem.
“Three of us got on a plane that evening,” he said. “It was on a Thursday evening I believe, and we came in on Friday. We confronted Vicki at that time. We sent her home on administrative leave until we could further investigate this thing and then shortly after that, within a matter of a day or so, we actually terminated her employment.”
The missing money will be replenished from private insurance the credit union is required to carry. Strawn says the embezzlement revealed another mess that is now almost cleaned up.
“There was the dishonesty going on, which was obviously very wrong and very troubling,” Strawn said, “but what’s maybe worse than that in some ways is that Vicki had become very dysfunctional in her job as operations manager over an extended period of time.”
At the time, Strawn says, internal controls on how money moved through the credit union were lax. For example, employees at the credit union all have passwords they use to engage in transactions.
“Vicki was actually in a position to know other employees’ passwords,” he said. “She issued them and some of the transactions were actually completed under other employees’ teller codes.”
Now, Strawn says those codes are issued by the credit union’s IT staff, are kept confidential, and are updated and changed randomly. Strawn says auditors raised concerns about the internal controls at ALPS but never found any evidence of malfeasance. There are still some unreconciled transactions that date back to 2008 — not fraud, so much as things that were just never properly recorded, he says. The staff is making progress on reconciling those. He says that should be done by the end of this year.
Weidenhof is scheduled for sentencing on December 13th. She’s now a resident of Chatsworth, Georgia. There is no phone number listed for her.
In the meantime, the 3,000-member credit union is conducting a national search for a full-time chief executive.
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