DECATUR-A federal judge has dismissed bank fraud and conspiracy charges against a former businessman and a former president of Lauderdale County Teachers CU of defrauding the credit union of more than $6 million.
Prosecutors said during the opening of the trial that Melissa Killen, 39, who headed the $32 million Florence, Ala., credit union until last year, and Timothy Shelton, 53, structured more than 20 loans to enable the member to borrow more than $6 million to finance his business, Tennessee Valley Bottling Co. Killen allegedly approved the loans without ever meeting the applicants, then recorded all of the loans as real estate or personal loans when all the money was used for Shelton's business.
U.S. District Court Judge U.W. Clemon granted a motion from Killen's attorney to dismiss the charges against her. "There's no reasonable doubt that a jury could conclude that she participated in any conspiracy," Clemon said in granting the motion. Killen cried when the judge made his decision.
The bank fraud and conspiracy to commit bank fraud charges against Shelton also were dismissed.
The credit union has since revised its lending rules and no longer makes loans for its members to use for businesses purposes. Members also are no longer allowed to co-sign loans once they have reached their maximum borrowing limit as a primary borrower or co-signer.
