FBI Charges Avon Lake Man for Receiving $11 Million in Fraudulent Loans

An Avon Lake man was charged with 28 criminal counts for illegally receiving more than $11 million from the St. Paul Croatian Federal Credit Union (SPCFCU), the FBI said Jan. 3.

Gezim Selgjekaj, 41, of Avon Lake, was charged with one count of conspiracy, six counts of bribery, six counts of money laundering, and 15 counts of financial institution fraud for his actions which played a role in the credit union’s collapse, law enforcement officials said.

The credit union, which served 5,400 members, was placed into conservatorship in April 2010 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.

“This case is yet another sad chapter in the story of the demise of an important community institution,”  Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, said. “The credit union’s leader and his associates enriched themselves on the backs of thousands of honest and hard-working members.”

Selgjekaj owned, operated and controlled 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.

Ohio Secretary of State’s Office lists Selgjekaj’s address as 747 Hunt Club Way in Avon Lake.

“This defendant created several fictitious businesses as safe havens for the illegal siphoning of fraudulently obtained loan proceeds,” said Stephen D. Anthony, Special Agent in Charge of the FBI’s Cleveland Field Office. “The FBI will continue to seek justice for the shareholders that placed their trust and faith in the management of this lending institution.”

Multi-year conspiracy

From 2003 through April 2010, Selgjekaj conspired with Anthony Raguz, who at the time 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.

In one instance, Selgjekaj received approximately $5 million in fraudulent loan proceeds from SPCFCU. He received another $3.6 million between 2004 and 2008, even though he was in federal prison for an unrelated charge. Selgjekaj managed to receive an additional $2.9 million in loans from SPCFCU between 2008 and 2010, even after defaulting on the $8.6 million in loans, according to the indictment.

According to the indictment, to influence and reward Raquz for providing him with the fraudulently obtained money from SPCFCU, Selgjekaj allegedly gave Raguz $40,000 in cash and five checks totaling $66,000.

Overall, Selgjekaj’s conduct resulted in a loss to the credit union of more than $11 million, according to the indictment.

Also charged were Arthur Hoxha, 40, of Rocky River, with one count of financial institution fraud; and Judmir Capoj, 36, of North Olmsted, with two counts of submitting false statements to a financial institution.

Selgjekaj has not been arraigned yet.

This case is being handled by the United States Attorneys Office.