Time moves onward toward the March 28 annual meeting that willdecide whether Jerry Logan will retake a seat on the board of the$602 million Alabama One Credit Union.

Logan, who had resigned from the board 11 years ago, turned inenough signatures to be included on the ballot on Feb. 13.However, since receiving a letter confirming his eligibility, Logansaid he hasn't received any communication regarding some importantparts of the process.

“I know they are supposed to have a mailed ballot but we don'tknow who is supposed to count those ballots or whether there can bean independent observer to watch them being counted,” Logansaid.

“We're also getting close to when ballots need to be sent out,”he added.

Logan said he wanted an independent observer assigned becausethe credit union had engaged its CPA to count ballots in previouselections. Logan questioned how impartial balloting could beif someone who worked for the credit union counted the ballots and,crucially, decided ballot validity.

“I am not saying anything against the man,” Logan said,referring to the CPA. “I am sure he will do a fine job. But onsomething this important, I think we have to have completetransparency.”

Sarah Moore, administrator of Alabama's Credit UnionAdministration, pointed to the state's regulations which said thecredit union's bylaws determine the election processes. However,she added that she had the power to act if it turns out thatsomething about the balloting appeared suspect.

The race has grown in importance as the late 2014 check kitingscandal that sparked the board challenge was only the first in whatcould become a series of successively worsening problems for thecredit union, according to legal records.

Read more: The water treatment loan that started tostink …

Not only did the Tuscaloosa, Ala., used cardealer and sometime real estate developer Danny Ray Butler takeAlabama One for $1.275 million in the check fraud, but courtrecords show the now bankrupt Butler owes Alabama One roughly $11.5million in real estate and business loans and may owe the creditunion much more.

A lawyer working for the credit union, Paul Poppins, maintainedthat the $1.275 million in bad checks had been covered, butdeclined to comment on the loans.

“You asked some specific questions about a member's loans withthe credit union,” Poppins wrote in an email to CU Times.“As I am sure you are aware, the credit union is limited by lawregarding what it can say about a member's account, regardless ofthe circumstances.”

Butler pleaded guilty to bank and wire fraud in February 2014and was sentenced to three years in federal prison, according tocourt records. He entered the federal correctional system onSept. 19, after the court revoked his bond, finding that he hadmet, on behalf of a financial institution, with a witness tofraudulent behavior. According to the federal motion to revokebond, Butler tried to convince the witness to retract a complainthe or she had made to bank regulators.

Butler, now residing in the Federal Correctional Institution inTalladega, Ala., could not be reached for comment before press timeand his lawyer, Max Pulliam, of Birmingham, Ala., said he could notcomment without Mr. Butler's permission.

Butler also filed for bankruptcy and his bankruptcy filinglisted Alabama One as the holder of a $4.4 million mortgage on a108 acre real estate holding in Fosters, Ala., described as acabin, lodge, saloon and garage/work shed.

Sources familiar with the properties described the lodge aslavish, and the property has been rented at least once as a weddingand reception venue.

A second bankruptcy filing, for a water treatment plant and the178 acres it sits on in Fosters, listed Alabama One as the mortgageholder on a $7.1 million note.

Both bankruptcy cases are currently pending and neither filingcontains updated information about what each property or equipmentmight be worth. The credit union did not comment on when theproceedings might be finalized.

But as much as the two loans might cost Alabama One, the detailsof other civil cases suggest more trouble ahead.

Read More: Members accuse credit unions of strawloan scheme …

As of press time, five Alabama One membershave filed complaints that alleged credit union employeescommitted fraud when they convinced members to take out loans tohelp Butler. One of the cases was settled confidentially. Sourcesfamiliar with the case said another case is very close to beingsettled, but three other are active and others are likely to befiled, the sources said.

According to the complaint filed in one of the settled cases,Jerry and Brenda Griffin joined Alabama One in 1976 when it was theBF Goodrich Employees Federal Credit Union and Jerry worked at theBF Goodrich plant. In about 2004, the Griffins said they made thecredit union their primary financial institution and consolidatedabout $2 million in personal and business assets with AlabamaOne.

“The plaintiffs relied on Alabama One's agents and officers toadvise them on various types of financial opportunities, loans andfor personal and business transactions,” the couple argued in theircomplaint. “Therefore, (the credit union had) a fiduciary duty todisclose certain material facts when the plaintiffs reposed trustin Alabama One and relied on the bank for specific financialadvice.”

According to the complaint, Jerry Griffin met Danny Ray Butlerin 2009 when Butler's used car showroom was next to a dry cleaningbusiness that Griffin owned. Although the two men knew each other,they didn't begin to have business dealings, the Griffinssaid, until the spring of 2010 when Tammy Ewing, Alabama One'smanager of business lending, approached Griffin with an allegedbusiness opportunity.

Ewing was one of the Alabama One employees temporarily suspendedfrom her job at Alabama One by the Alabama Credit UnionAdministration in February 2014 in conjunction with aninvestigation of the credit union's dealings with Butler. The ACUAthen rescindedthe suspension two weeks later under legal pressure.

Butler needed a business loan, the Griffins claimed Ewing toldJerry, but Alabama One could not make him one because it wasprohibited from making commercial loans at that time. Griffinassumed that was because of a recent merger Alabama One hadrecently concluded and because it had converted from a federal tostate charter.

However, in the complaint the Griffins said it was becauseregulators had said the credit union could not make any more loansto Danny Ray Butler.

“Ewing also represented to Griffin that he could make a higherrate of return than he could receive with his monetary assets heldin Alabama One,” the complaint read. “Ewing also represented toGriffin that she (Ewing) would complete the paperwork and Griffinwould loan Butler the money. Ewing completed an unsecured noteloaning $450,000.00 from Jerry Griffin to Danny Butler. To fund thetransaction, Ewing drafted a secured six-month balloon note for$450,000.00 from Alabama One to Jerry Griffin. This note wassecured by Griffin's approximate $900,000.00 held in a certificateof deposit account with Alabama One.”

That loan was repaid but, according to the complaint, in thefall of that year Ewing approached with a second offer that was notrepaid.

Instead, according to the complaint, Ewing advised Griffin toaccept a 50% stake in a grocery store development Butler wasworking on and from there the complaint detailed a steady spiral offurther involvement with Butler and the credit union that requireda steadily rising amount of money and mortgaged property to coverButler's debts.

Alabama One declined to comment on the Griffin case, which isapproaching a confidential settlement. It also denied the complaintwithout adding any detail in its court filing. It furthercountersued the Griffins, arguing they did not make payments onsome of the loans they took out in conjunction withButler.

The Griffins have also not commented past legal filings. Mooredeclined to comment on the investigation.

The U.S. Attorney's Office for the Northern District of Alabamahas said the investigation into fraud related to Danny Ray Butleris ongoing.