Several Indicted Over Credit Union Fraud Scheme

Charges tied to one of largest credit union collapses in history
   CLEVELAND – 5/19/2011 – A federal grand jury in Cleveland returned a 22-count indictment against six individuals in connection with a major fraud against St. Paul Croatian Federal Credit Union in Eastlake, Ohio, according to a May 13 announcement by Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio.
   In a related case, a separate three-count indictment was filed against a North Ridgeville, Ohio, man, also stemming from activities at St. Paul Croatian Federal Credit Union. The credit union went into conservatorship and then forced liquidation in April 2011. That resulted in a $170 million loss to the National Credit Union Share Insurance Fund, making it one of the worst failures in history, according to a subsequent audit.
   “Federal and local investigators continue to peel away at the layers of fraud and corruption that were visited upon this financial institution,” U.S. Attorney Dettelbach said. “This investigation is ongoing, and will not stop until we have run down every lead.”
   The first indictment alleges that Arben Alia fraudulently obtained several loans from St. Paul Croatian Federal Credit Union, with the assistance of Anthony Raguz, its former chief operating officer, totaling approximately $4.5 million from 2006 through 2009. The indictment further alleges that Alia obtained some of these loans in concert with the named co-conspirators, who are Alia’s friends and in-laws. The indictment alleges that Alia obtained these loans, in part, to fund various gambling excursions as well as to purchase and renovate Milano’s Bar and Grill in Willowick, Ohio.
   The indictment further charges Alia with corruptly giving Raguz approximately $100,000 in exchange for Raguz approving and facilitating the issuance of fraudulent loans to himself and his friends and in-laws.
   Raguz, of Mentor, Ohio, is one of nine people who were indicted in March 2011 and accused of bank fraud for their roles in the credit union collapse.
   Those charged in the new indictment, including their ages, last known residences, and the charges filed against them are as follows:
  • Arben Alia, 34, Eastlake, 11 counts bank fraud, 1 count bank bribery and 5 counts money laundering.
  • Ilir Marku, 34, Willowick, 3 counts bank fraud and 2 counts money laundering.
  • Vaso Shani, 36, Eastlake, 1 count bank fraud and 2 counts money laundering.
  • Alban Sulkaj, 35, Clinton Twp., Mich.,1 count bank fraud and 1 count money laundering.
  • Zoge Ahmetaj, 68, Eastlake, 1 count bank fraud and 2 counts money laundering.
  • Qerim Ahmetaj, 74, Eastlake, 1 count bank fraud and 1 count money laundering.
   The indictment charges Alia with five counts of money laundering, including the purchase of Milano’s Bar and Grill in Willowick. Marku, Shani, Zoge Ahmetaj and Qerim Ahmetaj are also charged with money laundering. The indictment also seeks the forfeiture of any and all illegal proceeds, including Milano’s Bar and Grill, as well as any substitute assets equal to the amount of illegally obtained loan proceeds.
   In the related case, Skender Demiri was charged with one count of financial institution fraud, one count of bribery in connection with the business dealings of a financial institution and one count of money laundering.
   Demiri, age 36, lives in North Ridgeville according to court records.
   That indictment alleges that from June 24, 2004, through March 2, 2010, Demiri, aided and abetted by Anthony Raguz, the former chief operating officer of St. Paul Croatian Federal Credit Union, fraudulently obtaining several loans totaling approximately $1.6 million from the credit union.
   Demiri obtained most of these loans by making false representations and promises, including that the loan proceeds would be used to start a business, according to the indictment. The indictment also charges that Demiri obtained most of the loans after having already defaulted on previous loans issued to him by the credit union. The indictment alleges that St. Paul Croatian Federal Credit Union lost approximately $1.6 million as a result of Demiri’s fraudulent conduct.
   The indictment also charges Demiri with corruptly giving Anthony Raguz numerous checks and cash payments totaling approximately $50,000 to induce and reward Raguz for approving and facilitating the approval of the fraudulent loans to Demiri.
   The indictment also charges Demiri with three counts of money laundering, including a September 2009 wire transfer in the amount of $150,000 from his Fifth Third account to a bank account at Volksbank Göppingen eG, Germany.
   The indictment also contains three separate forfeiture specifications for all of the fraudulently obtained proceeds and, if those proceeds are not able to be forfeited, any substitute assets that are equal to the amount of those proceeds.
   This case is being prosecuted by Assistant U.S. Attorneys John D. Sammon and Bridget M. Brennan, following an investigation by the Cleveland Offices of the FBI and the Internal Revenue Service, Criminal Investigation Division, with the assistance of the Eastlake Police Department.
   Source: U.S. Department of Justice release and the Financial Fraud Enforcement Task Force.