Malta bank officer sentenced in embezzlement case

2012-11-26T22:30:00Z 2012-11-27T13:43:09Z Malta bank officer sentenced in embezzlement caseBy JAN FALSTAD jfalstad@billingsgazette.com The Billings Gazette

One of Montana’s largest bank fraud cases ended Monday with a former top officer at a Malta bank being sentenced to nine years and two months in federal prison for embezzling nearly $3.7 million to cover personal debts.

U.S. District Judge Sam Haddon of Great Falls sentenced Malta native Rhonda Lee DeVries after a decade of sophisticated credit card fraud and embezzlement from First Security Bank of Malta, where she served as vice president of operations.

“She tearfully accepted the sentence and expressed profound regret and sorrow for everything she did and took full responsibility for her actions,” said her defense attorney, Mark Parker of Billings.

The judge also sentenced DeVries to three years of probation and ordered the now unemployed woman to pay back $3.8 million, including interest. She was immediately taken into custody.

Federal guidelines called for a sentence between 93 months and 121 months. DeVries received 110 months.

Assistant U.S. Attorney Carl Rostad in court records recommended a 120-month sentence, saying the scheme went on for more than a decade. "It was methodical, devious, sophisticated and involved countless acts of theft and deception," he said in a sentencing recommendation.

The crime, Rostad continued, "has seriously jeopardized the continued existence of a community financial institution, thereby putting at risk the futures of the bank's employees, the financial security of its shareholders and the availability of credit for a small agricultural community."

In a victim impact statement, the bank's directors and owners asked the judge to consider that DeVries was a long-term officer who participated in officer and committee meetings "giving her abundant knowledge to recognize that a theft of this magnitude would jeopardize the bank's existence."

Depositors at First Security bank are insured by the Federal Deposit Insurance Corp. for up to $250,000 on most accounts, so their deposits should not be affected by the fraud.

"There is every indication that First Security of Malta will survive as a bank. The bank and its board of directors have taken significant steps to improve the financial condition, including the injection of more than $1 million in capital and instituting new policies and procedures," said state banking commissioner Melanie Hall.

In August, on her 51st birthday, DeVries pleaded guilty to one count of bank fraud and embezzlement by a bank officer and to charges of credit card fraud and money laundering.

The fraud began in 2001 after a credit card company declined her request for additional credit, “which jeopardized her ability to keep existing accounts from going into default, cancellation, and collection,” according to the Montana U.S. Attorney’s Office. While trying to cover $40,000 in personal credit card debt, DeVries created four fraudulent credit card accounts at First Security, one with a $900,000 limit and three with borrowing limits topping $1 million. DeVries kept “meticulous records” and used long series of “Zs” in the account names to minimize the risk of discovery, according to court documents.

An independent credit card servicing company finally uncovered some fictitious transactions and reported the discrepancies to bank president Gary Howell in April. He called the sheriff, who called in the FBI to investigate.

The bank currently has assets of nearly $32 million, according to the banking commissioner.

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