Failed Credit Union’s COO Guilty Of Bank Fraud

In one of the largest credit union failures in American history, St. Paul Croatian Federal Credit Union in Eastlake, Ohio, went into conservatorship and then forced liquidation in April 2010. That resulted in a $170 million loss to the National Credit Union Share Insurance Fund. 

Now, Anthony Raguz, the credit union's former chief operating officer, has pleaded guilty to six counts, including bank fraud, money laundering and bank bribery, for his role in the credit union’s demise.
 
Raguz issued more than 1,000 fraudulent loans totaling more than $70 million to more than 300 account holders at St. Paul from 2000 to April 2010, according to court documents. He accepted more than $1 million worth of bribes, kickbacks and gifts in exchange for the fraudulent loans, according to court documents.
 
He is one of 16 people who have been charged in U.S. District Court for their roles in the credit union collapse. Raguz is scheduled to be sentenced Jan. 4, 2012.
 
“People ought to know that senior bank officials are being held accountable,” said Steven M. Dettelbach, U.S. Attorney for the Northern District of Ohio. “Not every bank failure over the last five years is the result of criminal conduct, but when we find criminal conduct, we are absolutely dedicated to investigating and prosecuting those offenses.”
 
Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland office, said: “The St. Paul Federal Credit Union collapse resulted in one of the largest credit union failure ever investigated in U.S. history. This complex, large-scale investigation transcended international borders and will continue until all those involved are brought to justice.”
 
Raguz oversaw the issuing of loans to hundreds of account holders with little or no assets, income or employment history, according to court documents. He also oversaw scores of “loan resets” in which older loans were fraudulently repaid with new loans in the names of false nominees, including “Auto Truck Company” and “B.S. Construction,” according to court documents.
 
The money laundering counts stem from Raguz issuing checks totaling $371,800 drawn on his St. Paul account payable to The Vanguard Group, according to court documents.
 
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 IRS - Criminal Investigation, with the assistance of the Eastlake Police Department.