Avon Lake Man Convicted of Crimes Related to Credit Union Collapse
An Avon Lake man was convicted by a jury on 27 criminal counts for illegally receiving more than $10 million from the St. Paul Croatian Federal Credit Union, actions which played a role in the credit union’s collapse, law enforcement officials said.
Gezim Selgjekaj, 43, was convicted on one count of conspiracy, five counts of bank bribery, six counts of money laundering and 15 counts of financial institution fraud. He was acquitted on a single count of bank bribery following a trial before U.S. District Judge Christopher Boyko.
Selgjekai is scheduled to be sentenced May 26.
St. Paul Croatian Federal Credit Union (SPCFCU) was placed into conservatorship in April 2010, when it served 5,400 members and was believed to have assets of more than $238 million. The National Credit Union Association discontinued operation of SPCFCU when it was determined to be insolvent, making it the largest credit-union failure in American history.
Selgjekaj owned, operated and controlled, in whole or in part, several business entities, which were created either primarily as “safe havens” for credit union proceeds or that performed little or no legitimate business despite receiving loan proceeds intended for Selgjekaj’s “business” ventures, according to the indictment.
Those business included: Jimmy’s Trucking; Top Quality Produce; RGV Enterprises; Alba Logistics; GPA Transport; J&F Properties; Lake County Farmers Market; Albkos Properties LLC; G&M Truck Repairs; Produce, Inc.; Fresh Fruit; Fresh Start Co.; East Side Farmers Market; RGA Enterprises, LLC and Ristorante Luciano, according to the indictment.
From 2003 through April 2010, Selgjekaj conspired with Anthony Raguz, who at the times was chief operating officer at SPCFCU, and others, to defraud the credit union, according to the indictment.
Selgjekaj submitted false and fraudulent loan applications to Raguz, including submitting loan requests in nominee’s names when Selgjekaj’s aggregate loan balances reached a level that could have drawn attention from auditors or members of the credit union’s board, according to the indictment.
From March 2003 through July 2004, for example, Selgjekaj received approximately $5 million in fraudulent loan proceeds from SPCFCU. Selgjekaj received another $3.6 million between 2004 and 2008, despite the fact that Selgjekaj was in federal prison for unrelated conduct. Even after defaulting on the $8.6 million in loans, Selgjekaj received an additional $2.9 million in loans from SPCFCU between 2008 and 2010, according to the indictment.
To influence and reward Raquz for providing him with the fraudulently obtained money from SPCFCU, Selgjekaj gave Raguz $40,000 in cash and five checks totaling $66,000, according to the indictment.
Overall, Selgjekaj’s conduct resulted in a loss to the credit union of more than $10 million, according to the indictment.
To date, more than 20 people have been convicted of criminal activity related to the credit union. Raguz was sentenced to 14 years in prison and ordered to repay $72.5 million last year.
This case was prosecuted by Assistant United States Attorneys Bridget M. Brennan and Robert W. Kern following an investigation by the Federal Bureau of Investigation and the Internal Revenue Service – Criminal Investigations.