Molokai woman who embezzled over $1M headed to prison
Federal judge metes out 7-year sentence
The Maui News
A Molokai woman was sentenced last week to seven years in federal prison for embezzling more than $1 million from the now-closed First Hawaiian Homes Federal Credit Union and forging a letter to try to conceal the theft.
Allennie Naeole, 55, who is also known as Kalai Naeole, was manager of the credit union when the funds were embezzled over a period of at least nine years before the credit union was closed due to insolvency in December 2015.
In documents filed in U.S. District Court in Honolulu, Naeole was described as the “leader and organizer” of the conspiracy to embezzle the money.
As part of the sentence handed down Wednesday by Judge Derrick Watson, Naeole was ordered to pay $1.055 million in restitution. The Kaunakakai resident was allowed to remain free on $25,000 bond and was ordered to turn herself in July 25 to begin serving the prison sentence.
Naeole had pleaded guilty to conspiracy to embezzle credit union funds and aggravated identity theft. Other charges were dismissed in exchange for her pleas.
She and co-defendant Janell Purdy were arrested in November after a federal grand jury returned a 15-count indictment against them.
The two were the only two permanent employees of the credit union in Hoolehua, with Purdy working as customer service representative.
According to court documents, the defendants withdrew and spent more money from personal credit union accounts in their names and family members’ names than was available in deposits. Both women controlled financial accounts and maintained the credit union’s books and records.
Purdy signed several checks issued from credit union accounts to pay for personal expenses of Naeole and her family members, according to documents. One check on Oct. 10, 2008, was for $8,855 to pay for Naeole’s Toyota Yaris.
In another example cited, Naeole withdrew $8,867 on Feb. 27, 2015, to pay part of her First Hawaiian Bank credit card bill.
The credit union’s books and records were altered to cover up negative balances by showing deposits being made into personal accounts of Purdy, Naeole and their family members, according to court documents.
Naeole changed the name on accounts and issued loans and fictitious repayments, according to documents. She also falsified financial reports and information provided to the credit union board of directors and the National Credit Union Administration.
On Dec. 14, 2015, in an attempt to conceal the embezzlement and false information provided to the National Credit Union Administration, Naeole created a fictitious letter, purportedly from the Molokai branch of Bank of Hawaii, falsely saying the credit union had investments at the bank, according to court documents. She reportedly forged the name of the Molokai branch manager on the letter.
In December 2015, the NCUA liquidated and closed the credit union due to insolvency caused by long-term embezzlement. Loss and liquidation expenses totaled more than $2 million.
The credit union, chartered in 1937, was serving nearly 1,400 members when it was liquidated.
The sentence imposed on Naeole included five years of prison for the conspiracy charge and two years of prison for aggravated identity theft. The terms are to be served consecutively, followed by three years of supervised release.
Purdy, 40, of Wailuku is scheduled to be sentenced July 18 after pleading guilty to conspiracy to embezzle credit union funds. She is free on a $25,000 unsecured bond.