Credit Union CEO Indicted for Loan Fraud Leading to Richmond City FCU’s Failure

March 21, 2025

Bob Coleman
Founder & Publisher

Credit Union CEO Indicted for Loan Fraud Leading to Richmond City FCU’s Failure

Richmond City Employees Federal Credit Union, a small credit union with 788 members in Richmond, Indiana, was closed by federal regulators in December 2022. The $8 million credit union reported a $500,000 loss for the quarter ending September 30th, leaving it with only 2.3% capital. 

The minimum capital requirement for a credit union is 7%.

$285,000 of that loss was attributed to a write-off of two fraudulent loans obtained by the CEO, Daniel Johnson.

In his role, Johnson’s duties encompassed virtually all operational functions as well as supervision and direction of two other employees. He had substantial authority in the credit union’s underwriting and processing of loans for members.

Credit Union employees were permitted to apply for loans from the credit union. However, those applications were required to be processed and reviewed by the Credit Union’s board of directors. Johnson lied to the Board about the identity of the borrowers and the intended use of the loan proceeds. The loans were never secured, and Johnson personally pocketed the $300,000 in unsecured loans.

Richmond City had a legal loan limit of $10,000 for unsecured loans and $150,000 for secured loans. Johnson created two fictitious accounts and claimed that the two loans would be secured by vehicles and a Winnebago RV.

Instead, Johnson used the funds to pay off personal debt at the credit union, part of his mortgage, student loans, and new credit card purchases.