David Saks: SWINDLER ZAI GETS SEVEN YEARS IN THE SLAMMER - MUST FORFEIT $23 MIL

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SWINDLER ZAI GETS SEVEN YEARS IN THE SLAMMER - MUST FORFEIT $23 MIL

Local Businessman A. Eddy Zai Sentenced to Seven Years in Prison, Ordered to Forfeit $23 Million for Role in Credit Union Scheme

U.S. Attorney’s Office February 05, 2013
  • Northern District of Ohio (216) 622-3600
 

Local businessman A. Eddy Zai was sentenced to more than seven years in prison and ordered to forfeit more than $23 million after he previously pleaded guilty to nine counts related to his participation in a fraud against St. Paul Croatian Federal Credit Union, law enforcement officials said.

“Mr. Zai held himself out to the community as a successful entrepreneur, when in reality, he was part of a conspiracy that resulted in one of the largest credit union collapses in history,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

“Eddy Zai’s sentence and restitution amount reflect his extensive involvement in bribing loan officials, submitting false documentation, and obtaining millions of dollars in loans for numerous non-operational businesses managed by him,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Field Office. “The FBI will continue to seek justice for victims of the SPCFCU collapse and any other financial fraud scheme where trust and faith have been unwittingly placed.”

Darryl Williams, Special Agent in Charge of the Internal Revenue Service-Criminal Investigations’ Cincinnati Office, said, “Honest and law abiding citizens are fed up with those who use deceit and fraud to line their pockets with other people’s money. Let these convictions stand as a warning to those who victimize the public that whether you are the main perpetrator of a fraud, or merely assist in its facilitation, the law will hold all guilty parties accountable.”

Zai, 44, of Pepper Pike, pleaded guilty last year to one count of conspiracy to commit bank fraud and bank bribery, two counts of bank fraud, three counts of money laundering, one count of bribery, and two counts of making false statements of financial institutions.

U.S. District Judge John Adams sentenced Zai to 87 months in prison, followed by five years of supervised release, and ordered him to pay more than $23 million in restitution.

Zai conspired with others, including Anthony Raguz, the former chief operating officer of the St. Paul Croatian Federal Credit Union (SPCFCU), to submit false loan documents to the credit union, defraud the credit union of approximately $16.7 million, and pay bribes and kickbacks to Raguz for using his position at the credit union to approve numerous loans to Zai and the entities and nominee companies he controlled, according to the indictment.

The conduct took place from December 2003 through March 2010, according to court documents.

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.

At the time, Zai owned, operated, and controlled The Cleveland Group LLC (aka the Cleveland Group of Companies) and its many related entities, which included: Cleveland Flooring & Designs Ltd.; Alpina Inc.; Cleveland Development Group LLC; The Cleveland Group, Environmental LLC; Cleveland Real Estate Group Inc.; The Cleveland Group Real Estate Division; The Cleveland Group, Excavating Division; Cleveland Management Group Inc.; The Cleveland Group, Construction Division; The Cleveland Group, Consulting Division; The Cleveland Group Ltd.; 417 Ltd.; 417 Limited; and Sutton Park Ltd.

Certain of these entities were created primarily to operate as a “safe haven” for credit union proceeds, while others performed little or no legitimate business despite having loan proceeds intented for Zai’s “business” ventures, according to court documents.

Zai engaged in a scheme to defraud the credit union by, among other things, submitting loan documents for and receiving loan proceeds on behalf of companies that ceased operations. He continued to seek and obtain loan proceeds in the name of non-operating entities even after he directed that no loan payments be made to the credit union.

This scheme to defraud the credit union resulted in an approximately $13.7 million loss, according to court documents.

Zai submitted numerous false loan documents to the credit union between March 2008 and July 2009 in order to influence the credit union’s decision to approve loans to the companies he controlled.

Zai gave Raguz numerous cash payments, usually in the form of $100 bills concealed in envelopes and hand-delivered to Raguz at the credit union’s offices and totaling more than approximately $5,000. The payments were made to both induce Raguz to approve additional fraudulent loan applications and to reward Raguz for having previously approved false loan applications, according to court documents.

This case is being prosecuted by Assistant U.S. Attorneys Bridget M. Brennan and Justin Herdman following an investigation by the Cleveland Field Office of the Federal Bureau of Investigation and the Internal Revenue Service-Criminal Investigation Division.

source: FBI



David Saks



Time&Temp Memphis

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Comment balloon 2 commentsDavid Saks • February 05 2013 08:14PM

Comments

Too bad we aren't seeing some of the Big Boys involved in the mortgage schemes getting serious jail time.

Posted by Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional, Palm Harbor, Dunedin, Clearwater, Safety Harbor (Charles Rutenberg Realty) over 7 years ago

They are getting serious jail time, Barbara Jo.

You have to dig through the cases when you click the red button to find them.

Real Estate Crimes

Posted by David Saks ((retired)) over 7 years ago

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