Administrative Order: In the Matter of Johnnie Earl Harrell, Jr.

21-0132-SR
Administrative Order: In the Matter of Johnnie Earl Harrell, Jr.
First Name
Jr., Johnnie Earl
Last Name
Harrell
Relationship
Former Employee
Institution
Welcome Federal Credit Union
City
Morrisville
State
North Carolina
Year
2021
Docket Number
21-0132-SR

CONSENT PROHIBITION ORDER

WHEREAS, the National Credit Union Administration Board ("NCUAB'") finds that grounds exist to initiate administrative prohibition proceedings against Johnnie Earl Harrell, Jr. (“Respondent”) pursuant to 12 U.S.C. § 1786(g), predicated on Respondent’s activities while serving as a former manager of Welcome Federal Credit Union (“WFCU”) (Charter# 24807).

WHEREAS, in the interest of cooperation and to avoid the costs associated with future administrative and judicial proceedings with respect to the above matter, Respondent, without admitting or denying any wrongdoing, desires to consent to the issuance of this Consent Order ("Order") issued pursuant to 12 U.S.C. §1786(g);

NOW, THEREFORE, it is stipulated by and between the NCUAB, through its duly authorized representative, and Respondent that:

ARTICLE I
JURISDICTION

  1. Pursuant to its authority under 12 U.S.C. § 1786, the NCUAB is the appropriate Federal agency to maintain an administrative action against an “institution-affiliated party,” as defined in 12 U.S.C. § 1786(r).
  2. Respondent was an employee of WFCU and was an “institution-affiliated party” of WFCU as that term is defined in 12 U.S.C. § 1786(r), having served in such capacity within six (6) years from the date of this Order. See 12 U.S.C. § 1786(k)(3).

ARTICLE II
NCUAB’S FINDINGS

The NCUAB finds, and Respondent neither admits nor denies, the following;

  1. Between October 2016 and August 2019, while serving as a manager of MHCU, Respondent embezzled funds from multiple members’ accounts through the sale of annuities by making cash disbursements to himself from members’ accounts. Respondent further misappropriated a member’s Home Equity Line of Credit for Respondent’s personal gain.
  2. On April 3, 2020, Respondent was charged in a Criminal Information with Embezzlement from a Credit Union in violation of 18 U.S.C. § 657. On June 24, 2020, Respondent plead guilty to charges.
  3. As described in paragraph 1, Respondent engaged in or participated in unsafe or unsound practices with WFCU, and breached his fiduciary duties owed to WFCU and its members.
  4. Respondent’s practices and branches of fiduciary duty caused WFCU to suffer financial loss and Respondent received financial gain and prejudiced the interests of the members of WFCU.
  5. Respondent’s practices and breaches of fiduciary duty involved personal dishonesty and/or unfitness to participate in the conduct of the affairs of a credit union.

ARTICLE III
ORDER OF PROHIBITION

Respondent consents to, and it is ORDERED that:

  1. Pursuant to 12 U.S.C. § 1786(g)(5), with respect to the institutions and agencies set forth in paragraph (2) of this Article, Respondent hereby agrees that he shall not:
    1. participate in any manner in the conduct of their affairs;
    2. solicit, procure, transfer, attempt to transfer, vote, or attempt to vote any proxy, consent, or authorization with respect to any voting rights;
    3. violate any voting agreement previously approved by the “appropriate Federal banking agency,” as defined in 12 U.S.C. § 1813(q); or
    4. vote for a director, or serve or act as an “institution-affiliated party,” as defined in 12 U.S.C. § 1786(r).
  2. The prohibitions in paragraph (1) of this Article, pursuant to 12 U.S.C. § 1786(g)(7)(A), apply to the following institutions and agencies:
    1. any insured depository institution;
    2. any institution treated as an insured hank under 12 U.S.C. § 1818(b)(3), (b)(4) or (b)(5);
    3. any insured credit union under the Federal Credit Union Act;
    4. any institution chartered under the Farm Credit Act of 1971;
    5. any appropriate Federal depository institution regulatory agency; and
    6. the Federal Housing Finance Agency and any Federal home loan bank.
  3. Pursuant to 12 U.S.C. § 1786(g)(7)(B), the prohibitions of paragraphs (1) and (2) of this Article shall cease to apply with respect to a particular institution if Respondent obtains the prior written consent of both the NCUAB and the institution’s “appropriate Federal financial institution’s regulatory agency,” as defined in 12 U.S.C. § 1786(g)(7)(D).
  4. This Order shall be enforceable to the same extent and in the same manner as an effective and outstanding order that has been issued and has become final pursuant to 12 U.S.C. § 1786.

ARTICLE IV
CLOSING

  1. By executing this Order, Respondent waives:
    1. the right to a Notice of Intention to Prohibit Further Participation under 12 U.S.C. § 1786(g);
    2. all rights to a hearing and a final agency decision pursuant to 12 U.S.C. § 1786(g), and 12 C.F.R. Part 747;
    3. all rights to seek judicial review of this Order;
    4. all rights in any way to contest the validity of this Order; and
    5. any and all claims for fees, costs, or expenses against the United States, the NCUAB, or any officer, employee, or agent of the NCUAB, related in any way to this enforcement mailer or this Order, whether arising under common law or under the terms of any statute, including, but not limited to, the Equal Access to Justice Act, 5 U.S.C. § 504, and 28 U.S.C §2412.
  2. Respondent shall not cause, participate in, or authorize WFCU or any subsidiary or affiliate of WFCU to incur, directly or indirectly, any expense relative to the negotiation and issuance of this Order except as permitted by 12 C.F.R. Parts 701 and 750.5. In addition, Respondent shall not, directly or indirectly, obtain or accept any indemnification (or other reimbursement) from WFCU or any subsidiary or affiliate of WFCU with respect to such amounts except as permitted by 12 C.F.R. § 750.5 and Part 701; provided, however, Respondent may not obtain or accept such indemnification with respect to any civil money penalty.
  3. Respondent acknowledges that he has read and understands the premises and obligations of this Order and declares that no separate promise or inducement of any kind has been made by the NCUAB or any officer, employee, or agent of the NCUAB to cause or induce Respondent to agree to consent to the issuance of this Order and/or to execute this Order.
  4. This Order constitutes a settlement of any proceedings arising out of the facts. omissions, or violations described in the NCUAB's Findings (Article II of this Order). The NCUAB agrees not to institute the proceedings referenced in the first whereas clause of this Order for the specific acts, omissions, or violations described in Article II of this Order unless such acts. omissions. or violations reoccur. However. the specific acts, omissions, or violations described in Article II may be used by the NCUAB in future enforcement actions to establish a pattern of misconduct or the continuation of a pattern of misconduct.
  5. This Order shall not be construed as an adjudication on the merits and, except as set forth in paragraph (4) of this Article, shall not inhibit, estop, bar, or otherwise prevent the NCUAB from taking any action affecting Respondent if, at any time, the NCUAB deems it appropriate to do so to fulfill the responsibilities placed upon the NCUAB by the several laws of the United States.
  6. Nothing in this Order shall preclude any proceedings brought by the NCUAB to enforce the terms of this Order, and nothing in this Order constitutes, nor shall Respondent contend that it constitutes, a waiver of any right, power, or authority of any other representatives of the United States or agencies thereof, including inter alia the Department of Justice, to bring other actions deemed appropriate.
  7. This Order is intended to be, and shall be construed to be, a final order issued pursuant to 12 U.S.C. § 1786, and expressly does not form, and may not be construed to form, a contract binding on the United States, the NCUAB, or any officer, employee, or agent of the NCUAB. Respondent expressly acknowledges that no officer, employee, or agent of the NCUAB has statutory or other authority to bind the United States, the NCUAB, or any other federal bank regulatory agency or entity, or any officer, employee, or agent of those entities, to a contract affecting the NCUAB’s exercise of its supervisory responsibilities.
  8. This Order is "issued with the consent of the institution-affiliated party concerned," pursuant to 12 U.S.C. § 1786(j)(2).
  9. The terms of this Order, including this paragraph, are not subject to amendment or modification by any extraneous expression, prior agreements, or prior arrangements between the parties, whether oral or written.
  10. The provisions of this Order are effective upon issuance by the NCUAB, through its duly authorized representative, whose hand appears below, and shall remain effective and enforceable, except to the extent that, and until such time as, any provisions of this Order shall have been amended, suspended, waived, or terminated in writing by the NCUAB, through its duly authorized representative.

WHEREFORE, in consideration of the foregoing, Johnnie E. Harrell, Jr. and the National Credit Union Administration Board hereby execute this Consent Prohibition Order. This Order is comprised of eight pages, including the signature page, and is effective on the date of its issuance.

/s/


Johnnie E. Harrell, Jr.
Respondent

9/8/2021


Date

IT IS SO ORDERED.

NATIONAL CREDIT UNION ADMINISTRATION BOARD

/s/


Keith Morton
Regional Director
Southern Region

9/8/2021


Date

Last modified on
09/30/21