OHIO – Sixty-year-old Joe Spaqi submitted bogus loans and the operating chief officer of the now-closed St. Paul Croatian Federal Credit Union approved them, officials maintain.
Spaqi, of Cleveland, was arrested Wednesday. He was indicted on four counts of financial institution fraud and two counts of money laundering.
But not before he was able to get loans from the credit union totaling nearly $1 million, officials said.
Officials maintain that the credit union through thefts suffered about $170 million in losses. Nearly 20 people have been convicted of crimes related to fraudulent lending that resulted in the credit union’s failure, authorities said.
Authorities allege that Spaqi aided and abetted credit union chief operating officer Anthony Raguz and a relative identified only as P.S. in a scheme to defraud the credit union between 2005 and 2009.
Spaqi did this by requesting loans from the credit union through Raguz. He did not follow established procedures and made false statements to obtain these loans, according to the indictment.
Raguz approved multiple loans to Spaqi, Eclipse Bar and Grill (which Spaqi owned) or Luke Nue (an alias he used) which totaled approximately $965,422.
Those monies were paid in checks to Spaqi, Eclipse, Nue, P.S. and unrelated third parties.
As a result, the credit union and National Credit Union Administration suffered losses of approximately $965,422, according to the indictment.
Spaqi is also accused of depositing fraudulent loan proceeds from Eclipse Bar and Grill into a personal share accounts, according to the indictment.
The credit union, headquartered in Eastlake, was closed and then liquidated in 2010 after sustaining losses of approximately $170 million, making it one of the largest credit union failures in American history.
Raguz is currently serving a 14-year federal prison sentence. He is one of nearly 20 people have been convicted of crimes related to St. Paul Croatian Federal Credit Union.