CLEVELAND – Seven more people were indicted this morning in connection with a massive loan fraud that sunk St. Paul Croatian FCU, a one-time $240 million credit union, last year.
The new indictments make a total of 16 charged in the $170 million fraud, the biggest ever among credit unions.
“Federal and local investigators continue to peel away at the layers of fraud and corruption that were visited upon this financial institution,” said Steven Dettelbach, U.S. Attorney for the Northern District of Ohio. “This investigation is ongoing, and will not stop until we have run down every lead.”
The individuals allegedly obtained fraudulent loans they never intended to repay by bribing the credit union’s CEO, Anthony Raquez, who has also been charged in the scheme. According to the new charges, Arben Alia, 34, obtained a $4.5 million loan from the credit union by paying Raquez a $100,000 bribe. Alia obtained these loans, in part, to fund various gambling excursions as well as to purchase and renovate Milano’s Bar and Grill in Willowick, Ohio. The indictment charges Alia with five counts of money laundering, including the purchase of Milano’s Bar and Grill in Willowick, Ohio.
In the related case, Skender Demir, 36, was charged with paying Raquez a $50,000 bribe to obtain $1.6 million in loans by making false representations and promises, including that the loan proceeds would be used to start a business. Demiri obtained most of the loans after having already defaulted on previous loans issued to him by the credit union. The indictment alleges that St. Paul Croatian Federal Credit Union lost approximately $1.6 million as a result of Demiri’s fraudulent conduct, according to the charges.In the related case, Skender Demir, 36, was charged with paying Raquez a $50,000 bribe to obtain $1.6 million in loans by making false representations and promises, including that the loan proceeds would be used to start a business. Demiri obtained most of the loans after having already defaulted on previous loans issued to him by the credit union. The indictment alleges that credit union lost $1.6 million as a result of Demiri’s fraud, according to the charges.
Also charged in the case is Koljo Nikolovski, a purported international crime figure, who allegedly wired more than $5 million in loan proceeds to Macedonia where he is believed to be the head of a crime syndicate. Nikolovski is in federal orison awaiting trial in the case.NCUA took over St. Paul Croatian, based in the Cleveland suburb of Eastlake, in April 2010, then liquidated it a week later as evidence of the massive loan fraud began to surface. Several credit unions and at least two local churches have lost hundreds of thousands of dollars in uninsured deposits in the failure.
