Former Louisiana Credit Union CEO Sentenced for Federal Charges in Connection with TARP

Louisiana – United States Attorney Brandon B. Brown announced that Helen Godfrey-Smith, 72, of Shreveport, Louisiana, has been sentenced by United States District Judge Elizabeth E. Foote for making and using a false document. Judge Foote sentenced Godfrey-Smith to one year of probation and she was ordered to pay a fine in the amount of $5,000.

According to information presented at Godfrey-guilty Smith’s plea hearing, she worked for the Shreveport Federal Credit Union (SFCU) from 1983 to 2017, most of that time as the SFCU’s Chief Executive Officer (CEO). The Shreveport Federal Credit Union was a financial institution based in Shreveport, Louisiana that was governed by the National Credit Union Administration (NCUA).

The SFCU, through Godfrey-Smith, entered into an agreement with the United States Department of the Treasury in October 2016 to buy back certain securities that were part of the Department’s Troubled Asset Relief Program (TARP). As part of that process, Godfrey-Smith signed and submitted to the United States Department of the Treasury an Officer’s Certificate on December 27, 2016, certifying that all conditions precedent to the closing had been met.

In reality, SFCU had failed to meet all of the prerequisites for closing and had suffered a material adverse effect. SFCU was in a financial crisis, unbeknownst to the US Department of the Treasury and the NCUA. From 2015 to 2017, another individual (Individual 1), who was the Chief Financial Officer of SFCU, falsified call reports to the NCUA, including millions of dollars in fictitious fee income. She was also making fictitious entries in the bank’s records to support the false call reports. This gave the impression that SFCU was profitable when, in fact, the bank was in trouble. Individual 1 also stole approximately $1.5 million from the credit union.

Godfrey-Smith had become aware of deficiencies at the credit union by the time she signed the Officer’s Statement. She had recently investigated and discovered that SFCU’s general ledger contained millions of dollars of fictitious entries, and the credit union’s books were not balanced. She did not, however, disclose this information to the US Department of the Treasury and signed the false Officer’s Statement.

The institution failed in the spring of 2017. It was taken over by NCUA regulators and placed in conservatorship. According to an NCUA investigation, SFCU had accumulated more than $10 million in losses by December 2016.

The FBI, IRS-Criminal Investigation, and the US Department of Treasury–Office of Special Inspector General for the Troubled Asset Relief Program all looked into this case. The case was prosecuted by Assistant United States Attorney Seth D. Reeg.