CLEVELAND – A federal court has agreed to stay consideration of NCUA’s $19 million suit against local developer A. Eddy Zai until criminal judges against Zai in the collapse of St. Paul Croatian FCU are resolved.

NCUA sued the well-known developer in May for recovery of funds Zai borrowed from the one-time $240-million credit union – allegedly using kickbacks and bribes paid to the credit union’s CEO Anthony Raguz. NCUA claims the Cleveland developer and his companies opened share accounts at the Eastlake credit union, then used the accounts to secure development loans to benefit of nine companies led by Zai, and then failed to repay the bulk of the loans.

More than 16 people have pleaded guilty to bribing Raguz to obtain fraudulent loans, including Koljo Nikolovski, an international crime figure who earlier this year was sentenced to 18 years in prison for arranging almost $6 million in loans, much of it siphoned to his overseas accounts. But Zai is by far the biggest borrower accused in the scheme.

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.


 

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