CLEVELAND – NCUA filed suit yesterday against a leading Cleveland developer and his partner to recover almost $19 million in fraudulent loans they obtained through St. Paul Croatian FCU, the biggest credit union fraud ever.
The suit, filed in U.S. District Court for the Northern District of Ohio, names as defendants well-known developer A. Eddy Zai, his wife, his partner and father-in-law Ted Vannelli, and the group of businesses the two operated in the wake of the failure of the one-time $240 million credit union.
Both men have been charged in criminal indictments with paying Anthony Raguz, the CEO of St. Paul Croatian, with cash bribes to obtain the loans, and Vannelli has pleaded guilty and agreed to testify in the case.
The NCUA suit charges the group with opening credit union share accounts, taking out loans for their benefit or the benefit of nine companies led by Zai, and then failing to repay the bulk of the loans.
Already more than 16 people have pleaded guilty to bribing Raguz to obtain fraudulent loans, including Koljo Nikolovski, an international crime figure who was sentenced to 18 years in prison last week for arranging almost $6 million in loans, much of it siphoned to his overseas accounts.
NCUA has filed civil suits against more than 20 borrowers for restitution of the fraudulent loan proceeds.
Raguz has pleaded guilty to his role in the scheme and is cooperating with federal prosecutors in the case against Zai, as he did in the Nikolovski case.
The 2010 failure of St. Paul Croatian cost NCUA 170 million to resolve, making it the biggest credit union fraud ever.
