CLEVELAND – NCUA, which estimates losses of as much as $170 million on the collapse of St. Paul Croatian FCU, is in line to receive payments due on several downtown Cleveland properties totaling $16.7 million under a plea deal with a local financier convicted of swindling the one-time $240 million credit union.

The deal calls for A. Eddy Zai, the 44-year-old president of the Cleveland International Fund, will direct monthly payments due his fund from several downtown projects, including the Flats East Office and Retail buildings, Westin Hotel, American Greetings Headquarters and University Hospitals Healthcare Systems, into an escrow account until it reaches the $16.7 million loss Zai caused the credit union. Then the funds will be paid to NCUA as part of the biggest restitution in the agency’s history.

NCUA did not respond to several requests for comment.

Zai pleaded guilty last week to bribing the CEO of St. Paul Croatian FCU to obtain $19 million in fraudulent loans, one of several fraud schemes engineered by the CEO, Anthony Raguz. Raguz has also pleaded guilty to the massive fraud and is scheduled to be sentenced Nov. 26, when his cooperation in the prosecution of Zai and purported Balkans crime figure Koljo Nikolovski in the case is expected to draw him a reduced sentence.

Two of Zai’s co-defendants, his father-in-law Ted Vannelli, 66, of Willoughby, and accountant Zrino Jukic, 41, also have pleaded guilty. Vannelli admitted conspiring to commit bank fraud and aiding and abetting Zai in the bribery of Raguz.

Jukic pleaded guilty to fraud and money-laundering charges, for which he could receive up to three years in prison and be required to pay more than $1 million in fines and $1 million in restitution.

More than two dozen other borrowers have pleaded guilty to accepting loans from Raguz they never planned to repay, in exchange for bribes.

 

Subscribe Now

Authoritative analysis and perspective for every segment of the credit union industry

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.