CLEVELAND Three more individuals were indicted yesterday for allegedly arranging more than $11 million in phony member business loans from St. Paul Croatian FCU as part of the biggest credit union fraud ever.
Gezim Selgjekaj, 41, who owned several businesses, was charged with one count of conspiracy, six counts of bribery, six counts of money laundering and 15 counts of financial institution fraud. The businesses, which allegedly were created as mere conduits for phony MBLs, included: Jimmy’s Trucking; Top Quality Produce; RGV Enterprises; Alba Logistics; GPA Transport; J&F Properties; Lake County Farmers Market; Albkos Properties LLC; G&M Truck Repairs; Produce Inc.; Fresh Fruit; Fresh Start Co.; East Side Farmers Market; RGA Enterprises LLC; and Ristorante Luciano, according to the indictment.
“This defendant created several fictitious businesses as safe havens for the illegal siphoning of fraudulently obtained loan proceeds,” said Stephen Anthony, special agent in charge of the FBI’s Cleveland Field Office.
Also charged were Arthur Hoxha, 40, of Rocky River (one count of financial institution fraud); and Judmir Capoj, 36, of North Olmsted (two counts of submitting false statements to a financial institution). The one-time $240 million credit union collapsed in April 2010 after NCUA discovered a huge fraud engineered by its CEO, Anthony Raguz, which is projected to cost the National CU Share Insurance Fund more than $185 million to resolve.
Raguz pleaded guilty to a variety of related charges and was sentenced in November to 14 years behind bars, a lenient sentence granted because of his testimony against a multitude of borrowers. Among them was Cleveland financier A. Eddy Zai, who pleaded guilty to obtaining $19 million in phony loans in exchange for bribes paid to Raguz. Zai is scheduled to be sentenced later this month.
From 2003 through April 2010, Selgjekaj conspired with Raguz and others to defraud the credit union, according to the indictment.
Selgjekaj submitted false and fraudulent loan applications to Raguz, including submitting loan requests in nominee’s names when Selgjekaj’s aggregate loan balances reached a level that could have drawn attention from auditors or members of the credit union’s board, according to the indictment.
From March 2003 through July 2004, for example, Selgjekaj received approximately $5 million in fraudulent loan proceeds from SPCFCU. Selgjekaj received another $3.6 million between 2004 and 2008, despite the fact that Selgjekaj was in federal prison for unrelated conduct. Even after defaulting on $8.6 million in loans, Selgjekaj received an additional $2.9 million in loans from SPCFCU between 2008 and 2010, according to the indictment.
To influence and reward Raguz for providing him with the fraudulently obtained money from St. Paul Croatian, Selgjekaj gave Raguz $40,000 in cash and five checks totaling $66,000, according to the indictment. Selgjekaj’s conduct resulted in a loss to the credit union of more than $11 million, according to the indictment.
To date, 29 people have been charged with criminal activity related to the credit union and NCUA has filed more than 40 civil suits in an attempt to recover loans made to borrowers under false pretenses.