CLEVELAND – A popular business man has been indicted on charges of fraudulently obtaining almost $17 million in loans from St. Paul Croatian FCU, the one-time $240 million credit union that went bust in 2010.
Eddy Zai, 43, was charged with 34 counts related to unpaid loans at the credit union, which failed under the weight of a massive loan scheme engineered by its CEO Anthony Raguz. In a federal indictment unsealed this morning, Zai was charged with paying Raguz bribes to obtain the loans.
“He’s going to be charged in court today at noon,” said Michael Tobin, spokesman for the U.S. Attorney’s Office, told the Credit Union Journal this morning.
Zai is one of 19 individuals charged in the massive loan scheme which cost the National CU Share Insurance Fund $170 million in losses, the biggest credit union fraud ever.
Last week, Koljo Nikolovski, the purported head of a Macedonian crime syndicate, pleaded guilty to obtaining $6 million in fraudulent loans from the credit union. His ex-wife and nephew have also pleaded guilty to charges in the scheme.
The Iranian-born Zai runs a variety of businesses, including the Cleveland International Fund that raised $45 million for the Flats East Bank development and is seeking overseas support for construction projects at University Hospitals. Zai companies also built local residential developments Lake Breeze, Aria's Way and Bank's Landing and Zai is also involved with the Cleveland Bio Fund, which has pushed for potential investors in Northeast Ohio.
Also indicted with Zai are Ted Vannelli, 66, of Willoughby, who is Zai's father-in-law and former business partner, and Zrino Jukic, 41, of Cleveland, who co-owned a company with Raguz which funneled loans to Zai.
The indictment charges that when Zai neared the maximum allowable loan limits at the credit union he obtained additional loans through nominees in order to avoid detection by the credit union’s board and NCUA examiners. Other times he obtained loan proceeds without submitting any loan documentation, the indictment charges.
The charges also allege that Raguz, without any authority to do so, provided other lenders with Stand-By Letters of Credit from St. Paul Croatian which pledged credit union funds if Zai defaulted on loans from those lenders.
In exchange, Zai paid Raguz cash bribes in $100 denominations delivered in envelopes to Raguz at his office at the credit union, the indictment charges.
