The Alabama Credit Union Administration has lifted suspensions on three employees from the $608 million Alabama One Credit Union as it continues to investigate member claims of loan fraud.
Larry Morgan, administrator of the ACUA, told CU Times an investigation is underway at the state-chartered Alabama One, but he emphasized the Tuscaloosa-based institution remains open.
Numerous members filed two civil lawsuits alleging Alabama One and some of its employees concocted a straw loan scheme that defrauded members and benefited Tuscaloosa businessman Danny Ray Butler, the ACUA said.
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Butler was indicted last year on bank fraud charges, including a check-kiting scheme that caused Alabama One to lose about $1.275 million, according to court documents.
He signed a plea agreement with federal prosecutors on Feb. 27 stating he would provide information about others he claimed had knowledge of his crimes, according to the U.S Attorney's Office.
One day later, the ACUA issued suspension notices to four Alabama One employees: John Dee Carruth, manager/CEO; Martie Patton, COO; Tammy Ewing, business lending manager; and Celina Hood, a teller.
The ACUA also appointed Doug Key, president/CEO of the $133 million Mutual Savings Credit Union in Birmingham, as interim CEO at Alabama One on Feb. 28, Morgan said.
Three of the suspended employees — Carruth, Patton and Ewing — filed a civil lawsuit March 3 against the ACUA and Morgan, claiming they were wrongfully suspended and seeking a temporary restraining order that would allow them to return to work, according to court documents.
Hood, the fourth suspended employee, did not join the suit because she opted to file an appeal, said Birmingham attorney Joel Dillard, who represents Hood.
The suspensions against Carruth, Patton and Ewing were lifted March 13 after a Montgomery judge told the ACUA to state a reason for the suspensions if they were to remain in place, according to the civil lawsuit.
"The three suspensions involved in the civil lawsuit were rescinded while the ACUA's investigation continues and the fourth suspension is under appeal," said David Martin, a Montgomery attorney who represented ACUA in the lawsuit filed by the three reinstated employees.
However, of the four employees, only Patton is free to return to work at the credit union, Martin said. Carruth, Hood and Ewing remain on administrative leave with full pay and benefits, according to the ACUA.
The credit union still faces separate civil lawsuits filed by numerous members who allege that Alabama One encouraged them to take out loans in their name and then loan the money to Butler, according to court documents.
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