EDWARDSVILLE, Ill.–A lawsuit by a number of members of Scott CU here, including one former NFL player, that alleged a former employee had misappropriated funds has been settled.
According to St. Clair County court documents, Associate Judge Chris Kolker has dismissed plaintiffs Mid City Development LLC, Amani Investments LLC, and Deryl Brown after the parties reached settlements with the defendants, Scott Credit Union and former employee Theodore Longust.
As CUToday.info reported earlier, the plaintiffs filed suit in March of 2016 alleging violations of Illinois Credit Union Act and breach of fiduciary duty.
What Plaintiffs Allege
According to the complaint, Longust worked at Scott Credit Union as a business relationship manager from November of 2005 through December of 2014. During that time, the plaintiffs alleged in the suit that Longust embezzled credit union funds, created fraudulent loans, paid loans through application of funds from other loans, increased credit limits on loans that did not have board approval and issued business loans without the required documentation.
In addition, the plaintiffs further alleged funds had been knowingly removed from their accounts without authorization, unauthorized lines of credit in their names had been opened, access to their accounts had been denied, and their funds withheld.
As a result, the plaintiffs allege they endured obstacles in their ability to legitimately borrow money, start new business ventures and uphold their professional reputations. They allege they are now personal guarantors for millions of dollars in fraudulent lines of credit that are in arrears.
In 2017, that suit was consolidated with a similar suit filed by Eugene Schill and former St. Louis Cardinals football player Dave Butz, according to court records.
Scott Credit Union had initially responded to the suit by denying Longust was acting as an agent or employee of the credit union when he engaged in the allegedly improper conduct. Instead, the credit union said, Longust had “engaged in the business of providing commercial loans and commercial lines of credit to entrepreneurs throughout the region.”
A status conference has been set for Oct. 16 in local courts.