EDWARDSVILLE, Ill.–Scott Credit Union, which is being sued by a former NFL player as part of a fraud lawsuit, has acknowledged that its former business relationship manager, Theodore Longust, embezzled funds and created fictitious loans, but has denied any liability for that criminal conduct.
Dave Butz, who played defensive line for the then St. Louis Cardinals for two years and who played for the Washington Redskins for 14 seasons, filed the lawsuit against Scott Credit Union and Longust. The Madison-St. Clair Record reported that Scott Credit Union answered the amended complaint filed by Butz and Eugene Schill, stating that it denies liability and that the issue of whether it and the defendants were required to comply with several federal laws and regulations are questions of law for the court to decide.
In its statement to the court, Scott Credit Union admits that Longust embezzled credit union funds, created fictitious loans, misapplied funds to pay loans with funds from other loans, increased credit limits on loans that did not have the requisite board approval, issued business loans without the required documentation or security and issued letters of credit without the required documentation and security, the Madison-St. Clair Record reported. It added that Scott CU has denied that Longust was acting as an agent, servant or employee of Scott Credit Union when he participated in fraudulent or criminal conduct.
Instead, the credit union said 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 Madison-St. Clair Record reported.
Scott Credit Union also filed seven affirmative defenses, including that it did not benefit from Longust’s conduct.
In its statement, Scott CU also argues that the plaintiffs “frequently communicated” with Longust while he was participating in fraud, the Madison-St. Clair Record reported, and the CU further suggested that Butz and Schill knew or suspected that Longust was involved in fraud and may have benefited from his conduct.
A status conference has been scheduled for May 18.