The former bank manager of the Portland Police Federal Credit Union, who was also a former police officer, faces up to 30 years in prison for embezzling more than $400,000.

John C. Barry, 69, of Portland, pleaded guilty Wednesday before Judge Nancy Torresen in U.S. District Court in Portland to charges of embezzlement and making false entries in credit union records.

Barry was the manager of the small credit union, which had more than 900 members, including employees of the police department and the Cumberland County Sheriff’s Office among its membership.

Between 2009 and 2013, Barry transferred more than $400,000 into his and family members’ accounts for their personal use, according to court records. At the same time, Barry filed reports with regulators that showed the credit union was in better financial health than it actually was. The case was investigated by the FBI.

Barry is the second former credit union manager to plead guilty in connection with the theft.

William J. Murphy, 75, of Gray, the credit union’s chief financial officer, pleaded guilty in October to making false entries in the credit union records.

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Court records in both men’s case state that Murphy was interviewed by a federal agent in May as the FBI built its case against them.

Murphy told the agents that he falsified banking records because he knew that if the credit union’s calculations of assets to debits put its net worth ratio under 4 percent, the National Credit Union Administration would shut it down, Assistant U.S. Attorney Donald Clark wrote in nearly identical prosecution documents in both Murphy’s and Barry’s case files.

“At some point, the (Murphy) told the (Barry) that the PPDFCU’s net worth was at 4 percent. In an effort to increase the net worth, the manager moved money out of certain members’ accounts at the end of the month and moved the money back at the beginning of the next month,” Clark wrote. “(Murphy) knew that he was submitting false information to the NCUA in the call reports, but was doing it to keep the PPDFCU afloat. He also knew that the call reports were submitted under oath, and said: ‘we all make mistakes.'”

The National Credit Union Administration discovered suspicious activity in November 2013 during an annual audit, court records say.

The audit revealed that from July 1, 2009, to Nov. 26, 2013, the credit union’s manager embezzled more than $400,000, Clark wrote.

Barry was allowed to remain free on his own recognizance, Clark said in a phone conversation on Wednesday. Conditions of Barry’s release included that he surrender his passport and not obtain any new international travel documents.

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Barry’s attorneys, Neale Duffett and Mark Dion, did not immediately respond to messages left on each of their phones.

Clark declined to say whether anyone else faces charges as a result of the investigation.

Like Barry, Murphy was also allowed to remain free while the case against him remains pending.

Both men face up to 30 years in prison, five years of supervised release and fines for as much as $1 million each.

As a result of Barry’s and Murphy’s actions, the National Credit Union Administration on Dec. 1, 2014, helped the much larger TruChoice Federal Credit Union acquire the Portland Police Department Federal Credit Union, said the U.S. Attorney’s Office in a written statement.

John Murphy, president of the Maine Credit Union League, said in October that although he is not familiar with the specifics of the alleged acts at the police credit union, members did not lose their funds because they remain federally insured. John Murphy is not related to William Murphy.


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