CLEVELAND (11/27/12)--The former CEO of the defunct St. Paul Croatian FCU has been sentenced to 14 years in prison and ordered to pay $72 million in restitution for pocketing bribes, kickbacks and cash gifts as a part of a multimillion-dollar loan scam that caused one of the biggest credit union failures in U.S. history.
Anthony Raguz, 52, the former CEO of the Eastlake, Ohio-based credit union, was sentenced Monday morning in the U.S. District Court in Cleveland (The Plain Dealer and Cleveland.com Nov. 26). He had pleaded guilty in September to six counts of bank fraud, money laundering and bank bribery (News Now Nov. 26).
Raguz allegedly issued more than 1,000 fraudulent loans totaling more than $70 million to about 300 accountholders at the credit union and accepted more than $1 million in bribes, kickbacks and gifts from the borrowers. He has already forfeited that $1 million, said the newspaper. Earlier accounts had said his take was more than $500,000.
The sentence was part of a plea bargain Raguz made last year. He cooperated with federal prosecutors, and more than 20 people were convicted in the collapse. However, U.S. District Judge Christopher Boyko rejected prosecutors' request that Raguz receive punishment in the mid-range of federal sentencing guidelines. Boyko said that the damage Raguz caused outweighed his contribution to the prosecution of other defendants.
Raguz apologized to the victims, to members of the credit union and to the 10 employees who lost their jobs because of the crime, said the Plain Dealer.
The loan scam ring was allegedly led by Kiljo Nikolovski of Eastlake and Skopje, Macedonia, who is serving 18 years in prison for the fraud.
The National Credit Union Administration placed the credit union into conservatorship in April 2010 and liquidated it a week later in early May, saying it was insolvent. The credit union's collapse caused $170 million in losses to the National Credit Union Share Insurance Fund. NCUA has filed lawsuits against several individuals involved in the scam to try to recoup some of the losses.