Credit Union administrators break silence about alleged fraud - ABC 33/40 - Birmingham News, Weather, Sports

Credit Union administrators break silence about alleged fraud

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TUSCALOOSA - AL -

    There were more complaints this weekend surrounding allegations of internal fraud at Alabama One credit union in Tuscaloosa.

    Tensions rose after some bank customers or members felt administrators were leaving them in the dark by refusing allow for questions during the credit union's annual meeting Saturday.  "Questions need to be asked about all of these dealings," said member Jerry Logan

    The cloud of suspicion rose several years ago when some bank members accused the bank of manipulating them to share their line of credit with businessman Danny Ray Butler...but, they were not told Butler was already deep in debt.

    Logan says he wanted to ask questions about the status of the investigation Saturday but a board member for Alabama One moved to end the meeting.  "She said there are people here tonight that want to talk about things that we don't need to discuss in this room.  They shut the meeting down at that point," Logan explained.

    The credit union's C.EO, John Dee Crutch broke his silence Tuesday with ABC 33/40.  He says they did eliminate the question session at the annual meeting Saturday.  But, he says it was done because of a specific group of people who attended.  "...individuals who appeared to be organized by a group of plaintiff's attorneys who have made some pretty serious false allegations against the credit union," said Carruth.

     In a written statement, Carruth specifically named Jay Smyth, a Tuscaloosa attorney representing at-least four plaintiffs who are suing Alabama One claiming the credit union mislead them to engage in the bad business dealings with Danny Butler.

     In a interview Tuesday, Smyth maintained "Had it not been for the representation made by management at Alabama One, some of our clients would have never been involved in any business dealing with Mr. Butler."

     However, Carruth the credit union director insists it never was a middleman in those bad debts.  "No one has acted as a middleman.  A credit union doesn't get to be the credit union we are by stuff like that happening in the credit union," Carruth said.

    Both sides now say the truth will prevail as the civil lawsuits move forward.

    Carruth and three other credit union employees were suspended last month by Larry Morgan, now the former head of the Alabama Credit Union Administration.  However, all four - included Carruth have since been reinstated.

    In a surprising move, Larry Morgan the ACUA abruptly resigned Monday.   Calls to his office were not returned.