Michigan Attorney General Bill Schuette on Monday announced that Stanley Hayes, the former CEO of Valley State Credit Union, has pleaded guilty as charged to 13 felonies. Hayes, 45 of Saginaw, was charged after he stole $710,000 from the credit union.
"In his position as CEO, this man was expected to act in good faith," said Schuette. "Instead he used his position to help pay his personal expenses. This man's actions not only broke the trust given to him but also broke the law and now he is facing the consequences. 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 originally charged with the following in June 2017:
- Count 1-Continuing Criminal Enterprise (Racketeering), a 20 year felony.
- Count 2 and 3-Embezzlement by an agent over $20,000-$50,000, a 15 year felony.
- Count 4-10-Embezzlement by an agent over $1,000-$20,000, a 5 year felony.
- Count 11-13-Using a computer to commit a crime, a 20 year felony.
Hayes pleaded guilty on Monday, February 12, before Saginaw County Circuit Court Judge Andre Borello. He is scheduled to be sentenced on April 4.
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 bank 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, Valley State was then ordered into a conservatorship where DIFS was directly responsible for the management of the credit union and Hayes was terminated.
Published: Wed, Feb 14, 2018
