HOUSTON (CN) – Prosecutors said Friday that a top official in a Texas county’s treasury department stole $35,000 from a county credit union to pay a dominatrix who blackmailed him.
Gregory Wayne Lueb, 56, told law enforcement on Tuesday that he was in a submissive relationship with a dominatrix named “Mistress Cindy,” whom he had met on the internet, according to his criminal complaint.
“Mr. Lueb described that eventually Cindy began demanding money, which he provided according to her instructions. Mr. Lueb reported that Cindy continued demanding money and eventually began threatening to talk to his wife if he did not continue sending money,” Harris County Sheriff Sgt. J. McClure wrote in the complaint.
Harris County Treasurer Orlando Sanchez fired Lueb as his chief assistant Wednesday after he learned that authorities were investigating Lueb for his alleged theft of more than $35,000 from the Harris County Federal Credit Union.
Prosecutors charged Lueb with felony theft. If convicted, he faces up to two years in state prison. Harris County District Attorney Kim Ogg said at a news conference Friday morning that Lueb was arrested Thursday.
He made his initial appearance in court Friday morning before posting a $1,000 bond.
County employees bank at the credit union, which is in downtown Houston. It also holds every Harris County agency’s funds, Ogg said.
"We know he was stealing from Harris County employees because it's our money in the credit union,” Ogg said.
She said she wants an independent audit of every account Lueb touched.
Ogg said Lueb had access to the total of more than $3 billion in each Harris County department’s credit union accounts, and he could sign off on transfers up to $100 million.
A collections manager at the credit union reported suspected fraud on Lueb’s credit card account to Harris County sheriff’s officers last September, according to Lueb’s charging document.
The manager said several online payments were made to the account, and cash advances of more than $35,000 were taken out while the account was still credited with the payments.
But the payments were later canceled and the funds were returned to the payer accounts, a common scam known as check-kiting, Sgt. McClure wrote in his affidavit.
McClure said in the charging report that he learned payments to the accounts were made from Wells Fargo and Chase Bank accounts.
McClure said he spoke to those account holders, neither of whom lives in Texas.
“Both individuals denied knowing Mr. Lueb or giving authorization for their bank account funds to used to pay his credit card debt,” the charging document states.
Further investigation showed that from Sept. 29 to Nov. 23, 2016, payments made to Lueb’s credit card account were reversed eight times after the credited funds had been withdrawn, according to the complaint.
McClure said in the affidavit he interviewed Lueb on Monday.
“During the interview, Mr. Lueb became emotional and began to tell [McClure] that he needed help with a situation involving a woman named Cindy whom he had met on the website collarspace.com. … During the interview, Mr. Lueb described a submissive relationship with Cindy and indicated that she would order him to do things,” the affidavit states.
McClure said in the complaint that Lueb told him he had opened the credit union account after Cindy threatened to talk to his wife, and that Lueb said Cindy was directing the fraudulent payments to the account.
“Mr. Lueb stated that Cindy would tell him when a payment had been made so that he could take another cash advance against the credit account in order to wire the funds as she directed,” the affidavit states.
Sanchez, the county treasurer, said on Friday afternoon he does not think Lueb embezzled county funds.
“We are routinely audited by the Harris County Auditor’s Office, and the county is about to engage an external auditor. So there’s no reason to believe county money is involved … This seemed to be a private situation that spiraled out of control for this gentleman,” he said.
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