Credit union exec gets prison for $1.5M embezzlement but must repay $1,000

By: - May 5, 2022 3:19 pm

A federal judge ruled there was no evidence Janine Keim personally benefited from the embezzlement. (Photo by Krisanapong Detraphiphat/Getty Images)

The former chief executive of a now-defunct western Iowa credit union was sentenced Wednesday to up to 15 months of federal imprisonment for a decades-long scheme to embezzle nearly $1.5 million, according to court records.

However, Janine Keim, 69, of Denison, was only ordered to repay $1,000 because federal prosecutors were unable to prove how much of that money she took for her own personal benefit from Consumers Credit Union in Denison.

Keim’s co-conspirator — her sister Brenda Jensen, 54, of Denison — was sentenced last year to three years in federal prison and ordered to repay $1.46 million, which was the total amount investigators determined was embezzled from the credit union.

Jensen had a well-documented “online shopping addiction,” court records show. For example, investigators noted she made more than $16,000 in online purchases during one month in 2015.

Keim only admitted to taking $1,000.

“The judge who sentenced Ms. Keim did rule that there’s no evidence she personally benefited from the cash loss she covered up in making her false statements,” said Tony Morfitt, a spokesperson for the U.S. Attorney’s Office for the Northern District of Iowa.

The theft scheme resulted in the credit union’s insolvency, and it merged with another credit union in May 2018, court records show.

Keim started working for the credit union in 1985 and Jensen in 1986. When they were fired in February 2018, Keim was the manager and Jensen was the head teller, according to court records.

“Keim and Jensen were able to conceal their embezzlement over the course of several decades by overstating the change fund general ledger balance and issuing fraudulent checks to cover ongoing activity,” an Ohio firm concluded in its 2018 audit of the credit union, a report of which was filed in federal court.

The audit commenced early that year and found that the embezzlement was concealed, in part, because Keim claimed the credit union was storing a large amount of cash at a local bank.

But investigators determined that her proof of that claim — a letter that dated from May 2012 showing the credit union had nearly $715,000 of cash at Bank Iowa — was fraudulent. The letter was purportedly signed by the bank’s president, but his signature on the letter was suspicious.

When confronted about the signature, “Keim immediately admitted she signed the name of Bank Iowa President Scott Brus on the letter,” according to court records.

Keim had further filed false reports with federal regulators “attesting to the financial soundness” of the former credit union, Morfitt said. She pleaded guilty last year to making false statements to the National Credit Union Administration.

Keim’s sentencing was delayed for months as prosecutors argued that she was still liable for the full restitution despite a lack of proof of her personal gains from the scheme. They sought more than six years in prison.

On Wednesday, Chief Judge Leonard T. Strand sentenced Keim to 15 months in prison, fined her $5,000 and ordered her to pay $1,000 in restitution.

The sentencing order indicated Keim had already paid the restitution.

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Jared Strong
Jared Strong

Senior reporter Jared Strong has written about Iowans and the important issues that affect them for more than 15 years, previously for the Carroll Times Herald and the Des Moines Register. His investigative work exposing police misconduct has notched several state and national awards. He is a longtime trustee of the Iowa Freedom of Information Council, which fights for open records and open government. He is a lifelong Iowan and has lived mostly in rural western parts of the state.

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