A longtime CEO of the New Haven County Credit Union was sentenced Tuesday to one day of imprisonment and ordered to perform 50 hours of community service for defrauding the financial institution.
James Farrell, 55, of East Haven, also will be on supervised release for two years.
U.S. District Court Judge Stefan R. Underhill imposed the sentence in a proceeding in Bridgeport.
Farrell served as the credit union’s CEO from 1992 to June 2015, and he remained with the company to assist his replacement until March 2016.
According to the U.S. Attorney’s office, Farrell also worked providing financial and bookkeeping services to the Rib House, a restaurant in East Haven, between 2010 and 2016.
The restaurant had a business account with the credit union, and Farrell routinely deposited cash sales and paid invoices in his role with the restaurant.
In August, Farrell pleaded guilty to one count of bank fraud, admitting to defrauding the credit union by transferring money from its general ledger account to the restaurant’s account.
Farrell allegedly did so in order to help the restaurant meet its financial obligations, such as paying for operating expenses, food, liquor and taxes.
According to federal prosecutors, Farrell made the fraudulent transfers for about five years, from 2011 to 2016. Approximately $602,909 was transferred, with the bulk of it going to the restaurant’s account and a portion for Farrell’s personal benefit. Farrell replenished $370,278 to the credit union, but there was still a shortfall of $232,631, prosecutors said.
Farrell has since paid full restitution to the credit union, according to the government.
Assistant U.S. Attorney Ray Miller asked for a sentence that would deter others from committing similar crimes.
“The defendant’s crime constitutes a serious offense,” Miller wrote, in a pre-sentencing memorandum. “At its core, it is a breach of trust. This scheme was not a crime of impulse or a momentary lapse in judgment. The fraudulent transfers occurred over a period of five years.”
About $14,000 of the money taken by Farrell went to pay his family’s cell-phone bills and $9,000 went for his own use, according to Miller.
Farrell’s attorney, Joseph W. Martini of the Southport firm of Spears, Manning & Martini, said his client accepted full responsibility for his actions and cooperated with authorities. Martini asked the judge for leniency, noting his client had no prior criminal record.
“Mr. Farrell has made no excuses for his wrongful conduct and he blames no one other than himself,” Martini wrote, in a pre-sentencing memorandum to the court.
According to Martini, Farrell’s motivation had been to help the restaurant, which is owned by a friend. Farrell’s intention had been to borrow funds and repay them, but the restaurant never had enough cash flow to repay the money, Martini wrote.
