CLEVELAND (12/17/12)--Another man has been sentenced in the loan fraud ring that helped bring the collapse of St. Paul Croatian FCU, an Eastlake, Ohio--based credit union liquidated in 2010 in one of the nation's largest credit union failures.
Ted Vannelli, 66, of Willoughby, Ohio, was sentenced Thursday to five years of supervised release for his role in the fraud. He pleaded guilty in April to aiding and abetting and conspiracy (News-Herald.com Dec. 14). In exchange for his cooperation with authorities, the U.S. Attorney's Office dropped charges of bribery, financial institution fraud and false statements to a financial institution.
Vannelli, one of 19 people arrested in connection with the loan fraud ring, is a business partner and father-in-law of A. Eddy Zai, a businessman who pleaded guilty Nov. 5 to bank fraud and who is scheduled to be sentenced on Feb. 5. They operated several business entities allegedly created as a haven for illegal proceeds from the credit union in the loan scams, said the court indictment.
The credit union's former CEO, Anthony Raguz was sentenced to 14 years in prison and ordered to pay $72 million in restitution for allegedly issuing more than 1,000 fraudulent loans, totaling more than $70 million, to about 300 accountholders, in return for about $1 million in bribes, kickbacks and gifts from the borrowers (News Now Nov. 27).
According to Vannelli's indictment, he and Zai gave about $5,000 to Raguz to approve false loan applications. It was also alleged that Zai and Vannelli submitted false loan applications to Park View Federal Savings Bank, which lost $750,000 on its loans.
The National Credit Union Administration liquidated the credit union in early May 2010, saying it was insolvent. The collapse cost the National Credit Union Share Insurance Fund $170 million in losses, and NCUA has filed several lawsuits against individuals involved to recoup some of the losses.