Loan Officer Manipulated Internal Systems to Inflate HELOC Limit and Slash Interest Rate Over Six Years
A former loan officer at MassMutual Federal Credit Union has been sentenced to 18 months in federal prison for defrauding the institution out of nearly $1 million through a long-running home equity line of credit (HELOC) scheme.
Brian Socha, 45, of Brookfield, Mass., was sentenced by U.S. District Court Judge Mark G. Mastroianni in Springfield, Mass., to 18 months in prison, followed by two years of supervised release. He was also ordered to pay $902,541.15 in restitution for bank fraud.
According to federal authorities, Socha admitted to defrauding MassMutual Federal Credit Union while employed there as a loan officer. Over a six-year period, he hacked into co-workers’ computers on more than 20 occasions to raise the credit limit and reduce the interest rate on the HELOC secured by the home he owned with his wife.
Prosecutors said Socha increased the HELOC credit limit from $135,500 to $995,000 and lowered the interest rate from 7.25% to 1.99%, well below market levels. The stolen funds were used for his personal enjoyment and lifestyle.
United States Attorney Leah B. Foley and Ted E. Docks, Special Agent in Charge of the Federal Bureau of Investigation’s Boston Division, announced the sentence. Assistant U.S. Attorney Caroline Merck of the Springfield Office prosecuted the case.
MassMutual Federal Credit Union is a not-for-profit financial cooperative formed in 1962 by 35 employees of the Massachusetts Mutual Life Insurance Company to serve its employees. The credit union now has more than 13,000 members and serves MassMutual employees, MassMutual Financial Professionals, their family members and others who work on MassMutual campuses. The institution is owned and operated by its membership, with a volunteer board of directors elected by members.
