LOUISVILLE, Ky. (WDRB) – The Louisville-based Presbyterian Church (U.S.A.) defamed a top executive during an investigation into an unauthorized nonprofit entity and bank account that handled church funds, the official alleges in a lawsuit filed last week.

Roger Dermody, the organization's deputy executive director for missions, claims church administrators found no evidence that he acted unethically, but "repeatedly published false statements" about his alleged misconduct and refused to correct the errors.

The statements were "false and defamatory" and "exposed Dermody to public hatred, ridicule, contempt or disgrace," the lawsuit alleges.

The suit, which is pending in Jefferson Circuit Court, seeks unspecified damages and a jury trial.

The Presbyterian organization does not comment on pending litigation, a spokeswoman said in an email.

At issue is a nonprofit corporation that was started without the approval of Presbyterian officials to oversee a sanctioned ministry project in Dermody's arm of the organization, according to the lawsuit. Dermody wasn't aware that staff members had created the nonprofit or transferred funds to it, the suit claims.

The money was later accounted for, and no employees attempted to misuse the funds, according to the lawsuit.

Denomination officials told the Presbyterian Outlook magazine that Dermody had committed "unspecified 'ethics violations,'" that were later referenced by a Presbyterian minister during a sermon, the lawsuit claims.

"There is no ethics violation, they know that," Steve Pence, Dermody's attorney, said in an interview. "And to say that there was is false and is defamatory and my client intends to get damages from that."

The Presbyterian Outlook reported Monday that Dermody and three other people linked to the investigation no longer work for the church organization.

The Outlook also reported that the Presbyterian organization has spent about $850,000 in legal fees on its investigation; the lawsuit alleged more than $500,000 had been spent.

Pence, a former U.S. Attorney and Kentucky Lt. Gov., said Tuesday morning that he believed Dermody remained employed.

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