And he was there, front and center, when it all nearly came toppling down over what he calls a mistake turned state government conspiracy. After years of regulatory inspections, lawsuits and mud-slinging, Carruth said he now has what he needs to prove that he is not only innocent of fraud, but that state officials including those in the Governor of Alabama's office conspired together to go after credit union dollars – and he shared that evidence with CU Times.

Humble Yourselves

What do the Bible, the Governor of Alabama, a weekly Saturday morning breakfast get-together, the FBI and Alabama One all have in common? The answer, Carruth said, is in potentially hundreds of emails sent to and from attorney Justice D. “Jay” Smyth, III. They included or discussed Smyth's friend and former law partner, who is now the chief legal advisor for the governor of Alabama; Alabama Governor Robert Bentley; aides for both of those individuals; State Sen. Gerald Allen (R-Tuscaloosa), Alabama Credit Union Administration Administrator Sarah Moore; an FBI agent; a retired judge and several others.

Each email included a scripture reference from the Apostle Peter, and many included references to weekly Saturday outings.

The initial problem can be traced back as far as 2009, when regulators began questioning business loans Alabama One made to Danny Butler, a man now serving time in prison for kiting checks.

Carruth acknowledged that Alabama One exceeded the regulatory cap on the percentage of loans to a single member, and said it was a mistake.

“Regulators felt like we had loaned too much money to one member or one group of members,” he said. “Ultimately, we had violated that. We made a good-faith decision in making those loans but it appears we did exceed [the aggregate].”

While Alabama One corrected its violation, it faced five lawsuits from members who said the credit union connected them to Butler, and that they were financially harmed through straw loan schemes.

As the credit union fought those lawsuits, and after it worked to be in compliance with state and federal regulations, it received letters in April 2013 from the NCUA and ACUA commending the financial institution for getting things back on track so quickly, and complying with the letter of understanding and agreement, Carruth said.

“The regulators asked us to reduce that concentration,” he said. “In record time, we reduced the concentration and even got congratulatory letters.”

That's why he was surprised to look up from his office on Feb. 28, 2014, to see the now-former administrator of the ACUA, Larry Morgan, and several state troopers rounding the corner, headed straight for his office.

Carruth said, in hindsight, it all makes sense now.

Under the Mighty Hand of God

Smyth was handling all five lawsuits on behalf of members against Alabama One. Carruth said Smyth and his partners pushed for the credit union to settle, believing it wouldn't want a PR nightmare on top of its existing issues with regulators. But Alabama One did put up a fight, Carruth said, because its board felt the lawsuits were frivolous and unjustified.

On Oct. 31, 2013, Smyth emailed Pam Chesnutt, executive assistant to David Byrne, chief legal advisor for the governor. The subject line read, “Alabama One.” Smyth wanted to set up a meeting with Byrne and Bentley.

“I wanted to let you know that we are trying to work out a meeting for November 7 or 8,” Chesnutt replied.

Smyth also sent an email that morning to Byrne, Judge Bernard Harwood, Smyth's law firm partner Al Lewis and attorney Bobby Cockrell. The email said Smyth had discussed “new facts” with ACUA general counsel Mark Williams and said Williams would be available for a meeting, along with Morgan.

It was the first in what is now a long list of emails that Carruth said prove Smyth, the ACUA and state officials conspired together to attempt to force Alabama One to pay millions in lawsuits or face unwarranted suspensions.

In a confidential memo dated Nov. 8, 2013 from Smyth to Allen, Smyth said he reached out to FBI Special Agent William Tootle, Williams and Byrne laying out a case for significant financial loss against his clients due to Alabama One and what Smyth called the credit union's “ongoing fraud.”

Throughout the dozens of emails obtained by CU Times, each one ending with a scripture and often with the friendly saying “roll tide,” Smyth emailed information about his clients to various state and federal officials, even advising the ACUA on how to investigate Alabama One and its lawyers on what action should be taken against the credit union's executives.

A request to the FBI Birmingham Field Office for information on what action, if any, the FBI took after receiving the various emails was not returned.

In several emails, Smyth referred to meetings with the governor, who did not return requests for comment from CU Times. Smyth referred to the governor as “no doubt wanting the ACUA to pick up where it left off in 2009,” and that the governor had requested more information on the situation.

CU Times also attempted on multiple occasions to reach Byrne and Allen.

According to the emails, Morgan began to withdraw his support for the investigation of Alabama One and subsequent suspension of Carruth; in response, Smyth suggested asking Morgan to attend a meeting with the governor and urged state officials to get Morgan on board.

On Nov. 19, 2013, Smyth detailed a plan to Chesnutt, in which Bentley, Harwood, Williams and Allen would attend a private meeting to “decide what actions would seem to be most appropriate for the state of Alabama.”

In an email dated Nov. 25, 2013, Smyth thanked Byrne for making “the meeting with the governor productive.”

On Nov. 26, Smyth sent an email to Bentley and several others to thank him and said, “the substantial time and effort which your staff has put into the investigation and evaluation of Alabama One Credit Union situation is quite obvious.”

According to a letter from the governor's office, Bentley later denied a request to meet with members of Alabama One who requested a chance to tell their side of the story.

Carruth said state regulators did back off from the credit union after it made the necessary corrections, and, for a period of time, things were quiet.

He also said he didn't know what was brewing via email during that peaceful time.