Another person was charged Wednesday by Cleveland federal prosecutors for allegedly embezzling nearly $1 million from the St. Paul Croatian Federal Credit Union, which was liquidated by the NCUA in 2010 after the Eastlake, Ohio, cooperative lost more than $170 million.
A six-count federal indictment charged Joe Spaqi, 60, of Cleveland of four counts of financial institution fraud and two counts of money laundering, according to Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
Spaqi, who was arrested by federal agents Wednesday, allegedly aided and abetted Anthony Raguz, the former president/CEO of St Paul Croatian, and a relative identified only as P.S., in a scheme to defraud the credit union between 2005 and 2009.
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Spaqi carried out the scheme by requesting loans from the credit union through Raguz. He did not follow established procedures and made false statements to obtain these loans, according to the indictment, according to court documents.
Raguz approved multiple loans to Spaqi, Eclipse Bar and Grill, which Spaqi owned, or Luke Nue ,an alias he used, which totaled approximately $965,422. These funds were paid in checks to Spaqi, Eclipse, Nue, P.S., and unrelated third parties.
Spaqi is also accused of depositing fraudulent loan proceeds from Eclipse Bar and Grill into his personal share accounts, according to the indictment.
Nearly 20 people have been convicted of crimes related to the massive fraudulent loan scheme that resulted in one of the largest credit union failures in U.S. history, according to federal prosecutors.
Raguz is currently serving a 14-year federal prison sentence after he admitted to approving more than 1,000 fraudulent loans totaling $70 million to approximately 300 account holders at the cooperative from 2000 to 2010. He also accepted bribes totaling $1 million to approve loans.
Federal authorities have said the collapse of St Paul Croatian led to a complex, large-scale, international investigation that will continue until all those involved are brought to justice.
The NCUA said it lost $186.4 million because of the credit union's collapse.
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Peter Strozniak
Credit Union Times reporter covering credit union operations, fraud, M&As, leagues, business continuity, and breaking news.
