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Lakewood man indicted for $3.7 million credit union Fraud

FOR IMMEDIATE RELEASE
March 5, 2014

A Lakewood man was indicted on three counts for his role in a conspiracy to defraud a now-failed credit union out of $3.7 million, some of which he used to buy and sell a property in downtown Cleveland, law enforcement officials said.

Sato Satka, 65, was indicted on one count each of conspiracy, bank fraud and bank bribery.

Satka conspired with others, including Anthony Raguz, the former Chief Operating Officer of the St. Paul Croatian Federal Credit Union (SPCFCU), to defraud the credit union. Satka paid bribes and kickbacks to Raguz for using his position at the credit union to approve numerous loans to Satka, and the entities he controlled and associates, according to the indictment.

From 1999 through 2004, Satka, his family members and businesses he controlled received more than $4.4 million in loan proceeds from SPCFCU, but little or no legitimate monthly payments were made to the credit union. As a result, the loans were in default, but in order to avoid detection from the credit union board, Raguz ordered “resets” to make it appear the loans were not in default, according to the indictment.

Satka controlled several enterprises, including F&S Satka Enterprises LLC, Sako Satka Parking West 3, Satka Parking Summer, Satka Parking Bolivar, Satka Parking Prospect and Titanic II, according to the indictment.

In October 2003, he purchased a commercial real estate property at 1350 West 3rd Street, Cleveland, for $460,000, according to the indictment.

J.P. is a person known to the Grand Jury but not charged herein. He purportedly controlled several non-operating entities, including: Metropolitan Restaurant Systems, Buckeye Cartage, Play Magazine, Celebrity Limousine, Victor/John Model & Talent, Jay Kay Records, and others, according to the indictment.

Around November 2004, Satka recruited J.P. to apply for multiple fraudulent loans from SPCFCU. On Nov. 5, 2004, approximately 13 months after Satka purchased the West 3rd Street property for $460,000, he sold it to J.P.’s company, Metropolitan Restaurant Systems, for $3 million, according to the indictment.

To induce Raguz to approve J.P.’s loan in November 2004, Satka handed Raguz a brown paper bag filled with $90,000 in cash and stated the money was for the approval of J.P.’s loan so that those proceeds could be used to settle Satka’s loan obligations to SPCFCU, according to the indictment.

Raguz proceeded to issue approximately $3.7 million in loans to 10 entities controlled by J.P., of which approximately $3.6 million was used to pay off loan balances on accounts held by Satka, his relatives or businesses he controlled. J.P. made no legitimate attempts to repay any of the loans and SPCFCU incurred a loss of $3.7 million, according to the indictment.

SPCFCU, located in Eastlake, was placed into conservatorship by the National Credit Union Administration on April 23, 2010. One week later, the NCUA liquidated SPFCFU and discontinued its operations after determining the credit union was insolvent. At that time, SPCFCU served about 5,400 members and was believed to have assets of approximated $239 million.

About two dozen people, including Raguz, have been convicted of crimes for conduct that led to the credit union’s collapse.

An indictment is only a charge and is not evidence of guilt.  A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

If convicted, the defendant’s sentence will be determined by the court after review of factors unique to this case, including the defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violation.  In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

This case is being prosecuted by Assistant U.S. Attorney Bridget M. Brennan following an investigation by the Cleveland office of the Federal Bureau of Investigation and the Internal Revenue Service, Criminal Investigation Division.

 

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