An Ohio community banking company that claims its former chief operating officer embezzled it out of more than $20 million is suing an insurer for refusing to pay on the loss.Last fall $316 million-asset Belmont Bancorp in Bridgeport, Ohio, sued the former executive, William Wallace, claiming that he had defrauded it through a "complex financial scheme." And last week it sued Progressive Casualty Insurance Corp. of Cleveland for refusing payment on a $4.75 million fraud bond.

Belmont claims Mr. Wallace made a series of "improper, dishonest, imaginary and fraudulent loans" to a New Philadelphia, Ohio, building company, Schwartz Homes Inc., which went out of business last April. The money, which was supposed to help Schwartz customers finance new homes, went directly to Schwartz executives instead, Belmont said.

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