DENVER — In a scathing lawsuit filed in the United States District Court, District of New Jersey, Everest National Insurance Company charges Robert Sutton, former CEO of Centrix Financial LLC and other former Centrix officials with fraud and conspiracy. The charges relate to Centrix's operation of its Portfolio Management Program (PMP) and the A-rated insurance coverage that provided default coverage for the subprime auto loans that credit unions funded.

The lawsuit claims three essential frauds were committed, referred to as The Lyndon Fraud, The Universal Fraud and the VSI Fraud. In an amended complaint, Sutton charges that Everest has engaged in "a continued pattern of overreaching and coercive conduct" and essentially blames NCUA for crippling its business, forcing it to declare bankruptcy.

Credit Union Times has learned that Sutton and representatives from Everest have scheduled a meeting for May 17 at the Denver courthouse to discuss the crossing lawsuits, including a breach of contract complaint against Sutton and a reinsurance company indirectly owned and controlled by him named Founders Insurance Company Limited. They say he failed to deposit $76 million into a trust account as required by the reinsurance agreement.