TUSCALOOSA, Ala. — At least one person wasn't surprised by the Alabama Credit Union Administration's decision to conserve Alabama One CU: its former CEO.
In fact, speaking through his attorney, the $598-million CU's now-ousted CEO John Dee Carruth said he was expecting it.
"Yesterday's action is exactly what we feared would be the result of the illegal conspiracy that we alleged among the defendants in the lawsuit that Alabama One and I filed on June 29 of this year, and it is unwarranted and unfair," Carruth said in a statement released by his attorney. "The regulator has made a number of general and broad allegations but has refused to provide us with the sufficient details to respond to them."
Carruth's attorney, Jeven Sloan, a Birmingham, Alabama-based partner at Loewinsohn Flegle Deary LLP, said that when the order of conservatorship was entered, his legal firm was terminated as the representative of Alabama One Credit Union, but continues to represent Carruth on an individual basis as a plaintiff in his federal lawsuit against ACUA Administrator Sarah Moore, former ACUA Administrator Larry Morgan and other state officials.
"We are trying to figure out how to proceed and how this conservatorship will impact our ongoing litigation in federal court," Sloan added.
In his statement, Carruth said what he found especially disturbing by the state regulator's action "is that numerous good employees, and our long- term volunteers, who have devoted their lives to the credit union, have been summarily discharged. Our safe and sound financial institution, which has been repeatedly praised by the state for our compliance mechanisms, has now been put in this position because of the alleged conspiracy among politically-connected attorneys, public officials, and the very office charged with defending community institutions like ours. We will fight this decision with every ounce of our effort and expect to prevail."
For the regulator's part, Moore's only comment was to confirm that Carruth is no longer running the CU, which is now being overseen by the ACUA.
Separately, a spokesman for the NCUA explained that the state regulator (ACUA) is "running the show."
"Our role is [as] the insurer, [which includes] reminding people their accounts are protected by the Share Insurance Fund," he added.
The move Thursday by the ACUA is only the latest salvo in an ongoing conflict between the state regulator, Alabama state officials and the Tuscaloosa-based credit union.
In April the credit union filed a petition in state court alleging that Moore did not post the necessary bond to become administrator, nor did she take and file a constitutional oath — both of which are required by Alabama state law. The credit union asserted in the petition that Moore did not follow the proscribed steps after she was appointed to take over as administrator of the ACUA and therefore Moore had "vacated her office" and "all actions taken after vacating her office are void."
In late June, Alabama One CU also filed a federal lawsuit against various senior state officials alleging conspiracy and abuse of power.
In return, ACUA has accused Alabama One CU of financial mismanagement and other improprieties, including making questionable loans to a local businessman named Danny Ray Butler, who is currently serving a federal prison sentence for fraud.
