Former Kansas Mayor, Credit Union Manager Sentenced for $750,000 Embezzlement Scheme
The former manager of a credit union in Kansas is heading to federal prison for stealing more than $750,000 from her employer in a nearly 15-year embezzlement scheme.
71-year-old Rita Hartman was sentenced to 63 months behind bars. Hartman, who previously served as the mayor of Atchison, Kansas and was also on the Kansas Credit Union Council, pleaded guilty to one count of false entries in federal credit union records.
“For decades, Rita Hartman was a prominent, well-respected figure in Atchison, Kansas,” said U.S. Attorney Ryan A. Kriegshauser for the District of Kansas. “Instead of living up to the high regard that people in the community had for her, she exploited their trust and used it to perpetuate her embezzlement scheme and line her pockets with stolen funds.”
Hartman worked as the manager of Muddy River Credit Union for 30 years, where she had control over all aspects of the credit union’s finances. The credit union served the employees of a foundry in Atchison.
Customer Deposits Swiped
According to court documents. Hartman stole $346,000 in customer cash deposits between the years 2007 and 2021. She also allegedly credited $430,000 in deposits and loan payments to her or her relatives' accounts, and then falsified ledgers to conceal the theft. In addition, prosecutors say Hartman obstructed “efforts to uncover her fraud by submitting fraudulent documents to regulators and delaying a mandated audit.”
The theft caused Muddy River Credit Union to become insolvent, forcing it to merge with another credit union to continue operations.
“The defendant was entrusted with the fiscal responsibility of the credit union’s members. In using the money for her personal benefit, the defendant’s actions were a betrayal of that trust,” said Special Agent in Charge Stephen A. Cyrus of the FBI Kansas City Field Office. “This sentencing demonstrates the FBI’s longstanding commitment to working financial fraud investigations and to hold individuals accountable for their actions.”
In addition to the prison time, Hartman was ordered to pay more than $778,000 in restitution, with the judge directing all her state pension payments to go toward that repayment.