Several account holders alleging a former Scott Credit Union employee misappropriated their funds have settled their consumer fraud and negligence claims.
St. Clair County Associate Judge Chris Kolker dismissed plaintiffs Mid City Development LLC, Amani Investments LLC and Deryl Brown on Sept. 19 after the parties reached settlements with defendants Scott Credit Union and Theodore Longust.
The plaintiffs filed their complaint on March 22, 2016, alleging violations of the Illinois Credit Union Act and breach of fiduciary duty.
According to the complaint, Longust worked at Scott Credit Union as a Business Relationship Manager from Nov. 7, 2005 to Dec. 8, 2014. During that time, the plaintiffs allege 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.
The plaintiffs also allege the defendants knowingly removed funds from their accounts without authorization, opened unauthorized lines of credit in their names, denied them access to their accounts and withheld their funds, among other allegations.
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.
On May 24, 2017, the suit filed by Mid City Development, Amani Investments and Brown was consolidated with a similar suit filed by Eugene Schill and former St. Louis Cardinals football player Dave Butz.
Butz played as a defensive lineman for the Cardinals for two seasons and for the Washington Redskins for 14 seasons.
Scott Credit Union previously answered the complaint filed by Butz and Schill through attorneys James Branit and Thomas Jacobson of Litchfield Cavo LLP. The defendant admits that Longust engaged in fraud and criminal activities but denies liability.
The defendant denies Longust was acting as an agent, servant or employee of Scott Credit Union when he participated in fraudulent or criminal conduct.
Instead, the defendant argues that as Business Relationship Manager, Longust “engaged in the business of providing commercial loans and commercial lines of credit to entrepreneurs throughout the region.”
The defendant also argues that it did not benefit from Longust’s conduct.
Kolker set a status conference for all pending motions involving the remaining parties on Oct. 16 at 9 a.m.
St. Clair County Circuit Court case number 15-L-234 and 16-L-162