Michigan Attorney General Bill Schuette last Thursday announced that Stanley Hayes, the former CEO of Valley State Credit Union, has been sentenced to up to 20 years in prison on 13 felony counts. Hayes, 45 of Saginaw, was charged after he stole $710,000 from the credit union.
"As CEO of the credit union Hayes had the trust of his employees and members of the credit union and he took advantage of that for personal gain, breaking the law in the process," said Schuette. "This should serve as a reminder to others that not only will there be legal consequences but financial ones too as Mr. Hayes has to pay back every penny he stole. I would like to thank the Department of Insurance and Financial Services (DIFS) for their hard work and cooperation in this joint investigation."
Hayes was sentenced on 13 charges Thursday, April 26, before Saginaw County Circuit Court Judge Andre Borello.
Hayes pleaded guilty to the following in February 2018 and was sentenced on each charge as follows:
- Count 1-Continuing Criminal Enterprise (Racketeering), a 20-year felony. Sentenced to 48 months to 20 years in prison
- Count 2 and 3-Embezzlement by an agent over $20,000-$50,000, a 10-year felony. Sentenced to 18 months to 10 years in prison on each charge
- Count 4-10-Embezzlement by an agent over $1,000-$20,000, a 5-year felony. Sentenced to 15 months to 5 years in prison one each charge
- Count 11-13-Using a computer to commit a crime, a 20-year felony. Sentenced to 60 months to 20 years in prison one each charge
All sentences will be served concurrently. Hayes was also ordered to pay $709,000 in restitution as well as $1,014 in state costs and fees.
Hayes was CEO of Valley State Credit Union (VSCU) from 2005 until his termination in 2016. During this time, he used money embezzled from the credit union to pay for his insurance, property taxes, travel and other personal expenses. Credit union funds were also used to conceal the financial difficulties the credit union was facing. In order to make the financial position of VSCU appear better than it was to auditors, Hayes used embezzled funds to pay defaulted loans and even pay on loans held by dead persons.
Most of the embezzlements were done electronically, but nearly $200,000 cash was taken from Hayes' teller drawer over time. He used the system to pay his taxes, car insurance and other non-credit union expenses.
The embezzlement was discovered after an investigation by the Michigan Department of Insurance and Financial Services (DIFS) found several financial irregularities, including overly high risk in its loan portfolio, lack of internal controls, inaccurate reporting and failure of management and the Board of Directors to address these problems. In 2016, following that investigation, VSCU was then ordered into a conservatorship where DIFS was directly responsible for the management of the credit union and Hayes was terminated.
Published: Mon, Apr 30, 2018
