In Grand Fashion
Episode 02 / 10.6.26
Stacey Shaw embezzled nearly $2.1 million from the credit union she ran, using six credit cards she had no authority to open. She raised the limit on one of them 89 times, to more than $1.7 million, and cut its minimum payment to fifty cents. In his first interview about the case, the former federal prosecutor who built it explains how investigators traced the charges. They found almost everything...except a reason.
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Previously, on Overdrawn
But it got to the point when they were yelling at my staff, my staff couldn't take it anymore and they'd leave. I lost four employees over it.
Darrell BradfordThey had given vehicle loans out and didn't keep the title.
Andy JanningI mean, you basically said you lost your entire staff. You basically had to rebuild from nothing, right?
Helen MarinkovicI worked by myself for probably two weeks by myself handling phones and doing things like that. And I think that was a stressful… That was the breaking point. That was the breaking point.
Darrell BradfordThat was one of the presents they gave us. Here, polish this.
Helen MarinkovicA lot of members, they would comment about the dirt and how filthy it was.
Andy JanningThe 712 credit union was gutted, from the inside, over a three-year period by the credit union's own chief executive, Stacey Shaw.
Lee Karl (former Assistant U.S. Attorney)She was fooling everybody involved with that credit union.
My name is Andy Janning, and this is Overdrawn, Episode 2: In Grand Fashion.
Let's start with the most obvious question...how?
How did Stacey Shaw, the CEO of the 712 Federal Credit Union, steal from a financial institution that is supposed to be guided by the members who own it, and regulated and examined by an agency of the federal government? How can that crime even happen? And how did it go on for so much, and for so long, that the credit union ceased to exist?
The government of the United States went looking for answers to those questions, and built a case against Shaw, who started working at the 712 Federal Credit Union on December 29, 2004. Part-time at first, two days a week. Somewhere between 2011 and 2012, she went full-time. On January 1, 2017, she became President and CEO.
Her last day in that role was February 28, 2020. She put all those dates in writing herself, in a letter to a federal judge.
What she did not put in that letter is why February 28, 2020 was her last day. For that, you have to ask the man who prosecuted her. Lee Karl, former Assistant United States Attorney.
This interview marks the first time he has spoken directly to the media about the investigation.
So the way the case started was… So I believe the NCUA was actually doing an audit or there was some regulatory body doing an audit of that credit union. And I think pretty early on they recognized something didn't seem quite right. And they attempted to schedule an interview with Ms. Shaw. And I think they even asked her maybe to show up with some documents, if I remember correctly. And at that point, she had to have known in her head that she was being caught or was in the process of being caught. So she just sort of blew them off. She literally, I don't think, ever came back to work after that initial outreach to schedule an interview with her. And the folks that were doing that audit recognized really quickly after that there was a problem.
I'm speculating a little bit because of my memory and how long ago this was. But what I know for sure, what I remember for sure is that once they reached out to her, she never returned to work. That was the end of her employment. And that is right around the time I think our investigations, we indicated in our charging document that the theft occurred from sometime in 2017 up until March of 2020.
The Charges
They found the credit cards. The credit cards, they discovered and saw the crazy outrageous balances on them. And then they immediately reached out to law enforcement. So they reached out, I think to multiple entities, including the FBI. So they reached out to the FBI and then of course the FBI reached out to our office and that's how the investigation got started.
In March of 2021, about a year after Shaw left 712, the United States Attorney explained the significance of those cards in a document filed with the District Court in Western Pennsylvania. In it, the government accused Shaw of three crimes.
The first is the felony. The government states that Shaw "embezzled, abstracted, purloined, or willfully misapplied" the credit union's money, "in excess of $1,000." How much in excess? From the Information filed with the court:
Stacey Shaw opened six credit cards issued by the International Brotherhood of Electrical Workers Local Union 712 Federal Credit Union, and fraudulently and without authorization raised the credit limits on each of the cards and made a combined $2,099,437.50 worth of charges and cash advances on the credit cards.
It's tempting to let that dollar figure become the center of gravity for this case. It is the only felony the government charged, and we'll spend most of our time on it. But the other two charges carry their own weight.
They were tax charges. Failure to file a return. The Information lists Shaw's gross income at just over $589,000 for 2018 and nearly $1.1 million for 2019, much of it money the government says she embezzled. Stolen funds are taxable in the year they're taken. A return was due for each year. She filed neither.
That is all the tax counts allege. They don't accuse her of filing a false return, and they don't accuse her of evasion. Failure to file is a misdemeanor, one count per year, each carrying up to a year in prison. The IRS put its loss at just over $519,000.
Three charges, and one person accused in all of them, her name in capital letters every time it appears, including on a felony that carried a maximum sentence of thirty years.
Typically in a case like this, the person knows well in advance or under investigation. It's not like something you'd see on TV where you run out and arrest them right away. Especially in a case where we know that the crime is stopped. So if it's a continuing violation, of course we need to stop it immediately. But here she was already gone. We knew we she was gone. So we were conducting our investigation, which quite frankly was pretty quick. There wasn't, like I said, this wasn't an extraordinarily difficult money trail to follow. And once we were sure we knew what happened, what she had done, how she spent the money, those types of things, if my memory serves me correctly, we reached out to her to try to schedule some sort of interview. And I think it was at that point she retained an attorney and then we started to negotiate through the attorney.
Thirty-two days after the Information was filed, on April 16, 2021, Shaw appeared before Judge Marilyn J. Horan by video. She waived her right to a grand jury. She pleaded guilty to the embezzlement count and to the tax count for 2019, the larger of the two years. The government moved to dismiss the 2018 count, and the court did. The plea agreement went into the court file the same day.
Thirty-two days from accusation to guilty plea. In the federal system, that is a case that was never going to be a fight.
But no indictment and no trial means no public testimony from a board member, an employee, an NCUA examiner, or anyone from the union hall explaining what they knew and when. What exists instead is a file the two sides assembled: a charging document, a plea agreement, sentencing memoranda from each side, and letters written to a judge.
By the time the public first heard that Stacey Shaw had been accused of anything, the ending was already being written.
The Trail
Some prosecutors spend years untangling shell companies and wire transfers to answer where embezzled money goes. Lee Karl had it easier.
The one thing that was actually sort of quite simple about the case was her manner of theft. She just kept raising these credit card limits. And what made it easy for us, which isn't always easy in an embezzlement case, is trying to figure out what happened to the money. But here, there were credit card statements for every single month over those three plus years that she was doing this. So it wasn't challenging from a tracing standpoint to figure out where the money went because you figure monthly statements over the course of three months or three years, you're talking about maybe 36 statements, maybe 40 statements that we had to review. And when you looked at the statements, it's hard to explain or imagine, but she was literally just blowing the money, just buying things, but not really things of value that would be worth recouping, but just spending extravagantly on meals and pets and just whatever it might be.
I think I listed a number of the things in the sentencing memorandum, but alcohol and just all sorts of things, travel, hotel rooms, things that you can't claw back or get back. But it was easy to trace because it was all right there in the credit card statements. And in this particular case, I can tell you, we had… I worked this case with three extraordinarily experienced agents. The FBI agent is somebody I worked with extensively. She's fantastic. I worked… we had the IRS involved in this case. That agent I've worked with extensively. He's tremendous. And we had the United States Marshal Service. They have a financial investigator that we use, and I've worked with him numerous times over the years. And all three of these folks, and myself, so four of us pored over the records trying to see if there's anything of great value we could claw back. And there was just nothing. I mean, she literally had blown the money.
Four people went through the statements looking for something to claw back and came up empty. The one category of spending that truly disappears, cash, turned out to be the smallest part of the story.
Yeah, I mean, the cash advances were not extensive. It wouldn't have been hundreds of thousands of dollars in cash advances. They were smaller level cash advances. And those are obviously the one things that are impossible to trace once the cash comes into her pocket. We don't know where it goes. But that being said, these were not massive cash advances that you would be using to buy a car or a piece of property or anything of significant value in that regard.
The Memo
Nine months later, in January 2022, the government put what those four people found into writing.
With regard to the embezzlement, the Defendant's conduct was shocking.
It runs through the outline of Stacey Shaw's career.
The Defendant was a longtime employee who began working for the credit union in approximately 2004. During the later stages of her employment, she was elevated to President and CEO. The Defendant was a highly trusted employee who had access to the sensitive financial systems of the credit union.
Then the gloves come off.
The Defendant, however, abused her position in grand fashion. Over the course of a relatively short time period, she opened 6 unauthorized credit cards and repeatedly, without authorization, raised the credit limits, while also lowering the minimum monthly payments. For example, for her credit card ending in 2444, she raised the credit limit approximately 89 times to a credit limit in excess of $1.7 million. Meanwhile, she lowered the mandatory monthly payment to $.50 (fifty cents). Each time she provided herself with additional credit, she blew the funds on largely frivolous purchases. A small sampling of the purchases include, but is not limited to, the following:
The government names fifteen businesses where Stacey Shaw used the cards.
Apple iTunes; Wine and Spirits; Weischedel Florist; Netflix; Magical Nails; Nintendo; Amazon Prime Video; Tractor Supply Company; Marriott Hotels; Hilton Hotels; Omaha Steaks; Container Store; Barnes and Noble; Fancy Plants and Bloomers; Castle Toys and Games; numerous pet store purchases and numerous restaurant purchases.
In less than three years, the defendant stole approximately $2.1 million with her credit cards, but there is nothing of significant value for the United States to recoup. The funds are simply gone. Furthermore, and importantly, this criminal behavior only stopped because the Defendant got caught.
Moreover, the Defendant's theft and greed was devastating. …
In short, the defendant embarked on a long course of embezzlement and fraud that stretched nearly three years. This was not aberrant behavior or a one-time mistake. It was premeditated, systematic criminal activity.
According to the government, the fallout extended beyond 712.
As discussed by Lisa York in the victim impact statement, the credit union had to be liquidated. Additionally, the National Credit Union Administration Board absorbed a majority of the loss through its insurance fund. Ms. York further explained how the loss may have a ripple effect across the country, as the Board may ask other credit unions to pay higher fees to reimburse the Board's insurance fund.
Did the National Credit Union Administration Board ask other credit unions to pay higher fees because of 712's liquidation? According to publicly available information, the answer is no.
The National Credit Union Share Insurance Fund that Lisa York was describing, the one operated by the NCUA, has assets measured in the billions. $19.1 billion at the end of 2020, to be exact. It exists to absorb exactly this kind of loss. It covered 712's liquidation without charging any of the other 5,099 federally insured credit unions in existence in 2020 a single dollar in premiums.
The fund has a statutory floor. If its equity ratio falls, or is projected to fall, below 1.20 percent, NCUA has to respond, either by assessing premiums or adopting a restoration plan. Stacey Shaw's theft, the theft that erased an entire institution and displaced its members, never moved it.
What was an extinction-level event on Sassafras Lane was, to the Share Insurance Fund, a few decimal points.
The government's language is consistent with what a sentencing memo is for. It is an argument that the harm was grave and far-reaching, written to "assist the Court in imposing a fair, reasonable, and just sentence."
Which explains the vocabulary: theft...greed...shocking...abused her position in grand fashion. The government hasn't held back so far, and it has more to say.
The Sentence
On why Stacey Shaw doesn't deserve leniency:
The Defendant does not have any history or characteristics that warrant a break in her sentence. … She was gainfully employed for many years and presumably lived a crime-free life until the age of approximately 44 when she inexplicably started to steal from the credit union.
On what her sentence needs to say:
Given the seriousness of the Defendant's conduct, and the length of time over which the embezzlement occurred, the United States respectfully submits that a sentence within the guideline range is warranted to promote respect for the law and to provide just punishment.
On deterrence, hers and everyone else's:
With regard to third party deterrence, this type of destructive white-collar crime needs to be, and can be, deterred. This crime required significant thought, effort, and planning. Unlike a spur-of-the-moment, heat-of-passion crime, the actors in this type of crime have time to, and often do, consider the consequences. As such, these crimes are particularly susceptible to deterrents. Moreover, given that the defendant committed criminal activity for nearly three years, she needs to be adequately deterred from future criminal activity.
Inside the plea agreement, Stacey Shaw had agreed to pay it all back.
$2,099,437.50 for what she took from the credit union. $519,394 for what she owed the IRS. A combined $2,618,831.50, owed to the National Credit Union Administration, to the United States Treasury, and to CUMIS Insurance Society, an affiliate of TruStage.
The Plan
That is the government's case. Lee Karl calls the manner of theft simple, and he means it as a compliment to the paper trail.
But inside the simplicity is a question the paper never answers. In Karl's experience, embezzlers have plans. They have exits. He went looking for Stacey Shaw's.
And obviously pure speculation on my point. But with every embezzlement case, and certainly with this one, I often ask myself and the agents I'm working with is like, 'What was the end… like, what was the plan here?' You would think if somebody's going to embezzle money, they would have a way that they think they're going to ride off into the sunset without getting caught. And oftentimes, and including this case, there is no happy ending. There's not going to be a way for her to ride off into the sunset without getting caught. I mean, she was in complete control of that credit union. So as long as she was working there, she was going to be able to keep it hidden. But eventually, as happened here, eventually she was going to get caught. I mean, she would've had to basically die working there to not get caught or be charged because the day she would've resigned or quit or retired, the next person in would've found the theft. So it's a great question. What her ultimate plan was, if she had a plan to get away with this, it's unclear. It's certainly not on its face. You can't make sense of it, how she thought she might get away with this. But in so many embezzlement cases, when somebody's in complete control of the finances, it takes something unique to get them caught. And here it was an audit.
No exit that anyone could find, and a theft the next person at her desk would have discovered. So did the case, according to the man who prosecuted it, have a hidden vice or a deeper conspiracy at its heart?
No, it didn't. And we typically look for things like that. So many embezzlement cases you find are driven by gambling addictions, drug addictions, life-altering events that cause somebody to steal money. Sometimes it's pure greed, just wanting to live above your means. And we're always looking for the motive if there is one, but this is a case where it would just fall into the category wanting to live above your means. She didn't… we had no evidence of a gambling problem or even gambling activity. Certainly no indications of drug addiction or anything like that. So when you look at those credit card statements, you see somebody who just liked to spend daily on things she wouldn't otherwise be able to afford. So it was just really just a case where she wanted to live above her means.
Three times in a single answer, Karl comes back to the same idea. She wanted to live above her means.
If that's the explanation, the scale is still extraordinary. According to the Amended Judgment in her criminal case, Shaw's charges and cash advances on the cards came to nearly $2.1 million from in and around May 2017 through March 31, 2020. Roughly thirty-five months. That works out to about $2,000 for every day of the scheme, in the kind of here-today-gone-tomorrow purchases the prosecution listed, the everyday habits that fill and fuel middle-class suburban life.
Even the United States government, which documented her spending down to the half-dollar and built a case to put her in prison for up to three decades, reached for one word when it got to the reason. She "inexplicably" started to steal.
The government could document what she took and where most of it went. What its sentencing memorandum never identifies is why Stacey Shaw began stealing when she did.
Did her defense offer a reason? That's next time on Overdrawn, where we'll hear the first public statements from the attorney who represented Stacey Shaw. We'll hear, in her own words, her plea for leniency from the judge.
And we'll examine one of the strangest elements of this story yet, one that her defense attorney said
So that's a hard one to give you a direct answer on.
Overdrawn is reported and produced by me, Andy Janning. Music by Epidemic Sound and Blue Dot Sessions. Special thanks to Sarah Cooke at The Credit Union Connection, and to Friends of the Podcast LaCorp and TwoScore.
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Where this episode's facts come from
Every factual claim in this episode traces to a document or an on-record interview. Public records and published coverage are linked below. Federal court filings are available through PACER.
Court record
- United States v. Stacey Shaw, No. 2:21-cr-00102-MJH U.S. District Court, Western District of Pennsylvania (PACER) The docket. The Information was filed March 15, 2021. On April 16, 2021, by video before Judge Marilyn J. Horan, Shaw waived indictment and pleaded guilty to Counts One and Three. She was sentenced January 19, 2022, when Count Two was dismissed on the government's motion.
- Information ECF No. 1, March 15, 2021 The charging document: one count of embezzlement from a federal credit union and two counts of willful failure to file tax returns, quoted in Act One.
- Plea agreement Filed with ECF No. 8, April 16, 2021
- United States' Sentencing Memorandum ECF No. 28, January 12, 2022 Quoted in Acts Three and Four. Ellipses in the transcript mark the two places where the read-aloud quotes skip sentences.
- Letter from Stacey Shaw to the court Filed with ECF No. 30, January 14, 2022 The source of the dates of her employment, from December 29, 2004 until February 28, 2020.
- Judgment and amended judgments ECF Nos. 33, 34 and 39, January and September 2022 The sentence and the restitution order of $2,618,831.50.
- Former Credit Union CEO Pleads Guilty to Embezzling, Failure to File Taxes U.S. Attorney's Office, Western District of Pennsylvania, April 2021
- Former Federal Credit Union President Sentenced to More than Four Years in Prison for Embezzlement and Failing to File Taxes U.S. Attorney's Office, Western District of Pennsylvania, January 19, 2022
- CEO's Theft Leads to Closure of Credit Union FBI, February 2022
Law
- 18 U.S.C. § 657, Lending, credit and insurance institutions Federal criminal code The embezzlement statute, with a maximum sentence of 30 years when the amount exceeds $1,000.
- 26 U.S.C. § 7203, Willful failure to file return Internal Revenue Code A misdemeanor, punishable by up to one year in prison per count.
- 12 U.S.C. § 1782, Share Insurance Fund administration Federal Credit Union Act Includes the requirement for a restoration plan when the fund's equity ratio falls, or is projected to fall, below 1.20 percent.
The union hall
- Electrician Union Hall DRAW Collective, May 28, 2025 The architect's description of IBEW Local 712's new office building and union hall in Beaver, which replaced the union's prior hall.
NCUA data
- 2020 Annual Report NCUA Share Insurance Fund assets of $19.1 billion and 5,099 federally insured credit unions at the end of 2020.
- Quarterly Data Summary, Fourth Quarter 2020 NCUA
and questions
Tell me if something here is wrong.
If you believe something in this episode is inaccurate, be specific about what it is and, where you can, what it should say instead. A sourced challenge gets checked against the underlying document and answered. Corrections are noted here and in the episode description.