A federal judge has recommended that the case of the prisoninmate suing a Michigan credit union he defrauded be dismissedbecause, among other things, it “transcends the frivolous.”

U.S. District Court Judge Robert Bell designated MagistrateJudge Joseph Scoville to handle pretrial motions in the litigationbrought by Michael Vorce, an inmate in federal prison who pledguilty to a fraud involving Lake Michigan Credit Union and subsequently sued the creditunion “on behalf of its members” alleging they were harmed by thecredit union's not detecting and preventing his fraud.

Vorce defrauded the credit union with falsified documents inpersonal and business loans relating to the purchase of boats.

He did not seek any money for himself but sought to have the$2.8 billion Grand Rapids-based credit union pay damages to its202,000 members.

Bell designated Scoville to handle the pretrial motions on Feb.13 and Scoville addressed the case in a report issued on Feb.20.

In the report, Scoville recommended Bell dismiss Vorce'scomplaint on the grounds that Vorce lacked standing to have broughtthe complaint in the first place.

“Plaintiff, the admitted perpetrator of a massive scheme todefraud the Lake Michigan

Credit Union, lacks standing to assert the claims of the membersof that credit union who suffered a loss as a result of plaintiff'scriminal conduct,” Scoville wrote in his report.

Further, Scoville wrote, even if Vorce had standing, he wouldnot have the ability to represent the class of credit union membersallegedly harmed.

“Consequently, even if plaintiff were deemed to have standing toassert claims on

behalf of the members of the Lake Michigan Credit Union, dueprocess concerns, as embodied in Fed. R. Civ. P. 23, would preventhim from being an appropriate representative of those absentparties. Plaintiff alleges no claim of his own, and his attempt tosue as representative of those he defrauded transcends thefrivolous,” Scoville concluded.

Lake Michigan CU issued a statement which praised the decisionand decried that the complaint was allowed to be lodged in thefirst place.

“Lake Michigan Credit Union is very pleased that the court soquickly and clearly saw that the potential lawsuit filed by MichaelVorce is baseless and frivolous,” the credit union said in astatement.

“Michael Vorce is a confessed felon serving a sentence infederal prison for criminal fraud and deceit against a number oflocal financial institutions, including Lake Michigan Credit Union.Mr. Vorce defrauded these financial institutions of $27 million, ofwhich LMCU lost $3.4 million. Lake Michigan Credit Union was one ofhis many victims. “It's also important to note that this is oldnews. Michael Vorce was arrested for his crimes in 2007 and wassentenced in 2009.”