Time moves onward toward the March 28 annual meeting that will decide whether Jerry Logan will retake a seat on the board of the $602 million Alabama One Credit Union.

Logan, who had resigned from the board 11 years ago, turned in enough signatures to be included on the ballot on Feb. 13. However, since receiving a letter confirming his eligibility, Logan said he hasn't received any communication regarding some important parts of the process.

“I know they are supposed to have a mailed ballot but we don't know who is supposed to count those ballots or whether there can be an independent observer to watch them being counted,” Logan said.

“We're also getting close to when ballots need to be sent out,” he added.

Logan said he wanted an independent observer assigned because the credit union had engaged its CPA to count ballots in previous elections.  Logan questioned how impartial balloting could be if someone who worked for the credit union counted the ballots and, crucially, decided ballot validity.

“I am not saying anything against the man,” Logan said, referring to the CPA. “I am sure he will do a fine job. But on something this important, I think we have to have complete transparency.”

Sarah Moore, administrator of Alabama's Credit Union Administration, pointed to the state's regulations which said the credit union's bylaws determine the election processes. However, she added that she had the power to act if it turns out that something about the balloting appeared suspect.

The race has grown in importance as the late 2014 check kiting scandal that sparked the board challenge was only the first in what could become a series of successively worsening problems for the credit union, according to legal records.

Read more: The water treatment loan that started to stink …

Not only did the Tuscaloosa, Ala., used car dealer and sometime real estate developer Danny Ray Butler take Alabama One for $1.275 million in the check fraud, but court records show the now bankrupt Butler owes Alabama One roughly $11.5 million in real estate and business loans and may owe the credit union much more.

A lawyer working for the credit union, Paul Poppins, maintained that the $1.275 million in bad checks had been covered, but declined to comment on the loans.

“You asked some specific questions about a member's loans with the credit union,” Poppins wrote in an email to CU Times. “As I am sure you are aware, the credit union is limited by law regarding what it can say about a member's account, regardless of the circumstances.”

Butler pleaded guilty to bank and wire fraud in February 2014 and was sentenced to three years in federal prison, according to court records.  He entered the federal correctional system on Sept. 19, after the court revoked his bond, finding that he had met, on behalf of a financial institution, with a witness to fraudulent behavior. According to the federal motion to revoke bond, Butler tried to convince the witness to retract a complaint he or she had made to bank regulators.

Butler, now residing in the Federal Correctional Institution in Talladega, Ala., could not be reached for comment before press time and his lawyer, Max Pulliam, of Birmingham, Ala., said he could not comment without Mr. Butler's permission.

Butler also filed for bankruptcy and his bankruptcy filing listed Alabama One as the holder of a $4.4 million mortgage on a 108 acre real estate holding in Fosters, Ala., described as a cabin, lodge, saloon and garage/work shed.

Sources familiar with the properties described the lodge as lavish, and the property has been rented at least once as a wedding and reception venue.

A second bankruptcy filing, for a water treatment plant and the 178 acres it sits on in Fosters, listed Alabama One as the mortgage holder on a $7.1 million note.

Both bankruptcy cases are currently pending and neither filing contains updated information about what each property or equipment might be worth. The credit union did not comment on when the proceedings might be finalized.

But as much as the two loans might cost Alabama One, the details of other civil cases suggest more trouble ahead.

Read More: Members accuse credit unions of straw loan scheme …

As of press time, five Alabama One members have filed complaints that alleged credit union employees committed fraud when they convinced members to take out loans to help Butler. One of the cases was settled confidentially. Sources familiar with the case said another case is very close to being settled, but three other are active and others are likely to be filed, the sources said.

According to the complaint filed in one of the settled cases, Jerry and Brenda Griffin joined Alabama One in 1976 when it was the BF Goodrich Employees Federal Credit Union and Jerry worked at the BF Goodrich plant. In about 2004, the Griffins said they made the credit union their primary financial institution and consolidated about $2 million in personal and business assets with Alabama One.

“The plaintiffs relied on Alabama One's agents and officers to advise them on various types of financial opportunities, loans and for personal and business transactions,” the couple argued in their complaint. “Therefore, (the credit union had) a fiduciary duty to disclose certain material facts when the plaintiffs reposed trust in Alabama One and relied on the bank for specific financial advice.”

According to the complaint, Jerry Griffin met Danny Ray Butler in 2009 when Butler's used car showroom was next to a dry cleaning business that Griffin owned. Although the two men knew each other, they didn't begin to have business dealings, the Griffins said, until the spring of 2010 when Tammy Ewing, Alabama One's manager of business lending, approached Griffin with an alleged business opportunity.

Ewing was one of the Alabama One employees temporarily suspended from her job at Alabama One by the Alabama Credit Union Administration in February 2014 in conjunction with an investigation of the credit union's dealings with Butler. The ACUA then rescinded the suspension two weeks later under legal pressure.

Butler needed a business loan, the Griffins claimed Ewing told Jerry, but Alabama One could not make him one because it was prohibited from making commercial loans at that time. Griffin assumed that was because of a recent merger Alabama One had recently concluded and because it had converted from a federal to state charter.

However, in the complaint the Griffins said it was because regulators had said the credit union could not make any more loans to Danny Ray Butler.

“Ewing also represented to Griffin that he could make a higher rate of return than he could receive with his monetary assets held in Alabama One,” the complaint read. “Ewing also represented to Griffin that she (Ewing) would complete the paperwork and Griffin would loan Butler the money. Ewing completed an unsecured note loaning $450,000.00 from Jerry Griffin to Danny Butler. To fund the transaction, Ewing drafted a secured six-month balloon note for $450,000.00 from Alabama One to Jerry Griffin. This note was secured by Griffin's approximate $900,000.00 held in a certificate of deposit account with Alabama One.”

That loan was repaid but, according to the complaint, in the fall of that year Ewing approached with a second offer that was not repaid. 

Instead, according to the complaint, Ewing advised Griffin to accept a 50% stake in a grocery store development Butler was working on and from there the complaint detailed a steady spiral of further involvement with Butler and the credit union that required a steadily rising amount of money and mortgaged property to cover Butler's debts.

Alabama One declined to comment on the Griffin case, which is approaching a confidential settlement. It also denied the complaint without adding any detail in its court filing. It further countersued the Griffins, arguing they did not make payments on some of the loans they took out in conjunction with Butler. 

The Griffins have also not commented past legal filings. Moore declined to comment on the investigation.

The U.S. Attorney's Office for the Northern District of Alabama has said the investigation into fraud related to Danny Ray Butler is ongoing.