NCUA Files Lawsuit against Ohio Man in SPCFCU Fraud Case
NCUA has filed a civil lawsuit that seeks a $6.9 million judgment against Svetislav Vujovic of Brunswick, Ohio, who also has been indicted for allegedly embezzling more than $2.3 million in the $70 million fraud cased that led to the collapse of the St. Paul Croatian Federal Credit Union in 2010.
Filed Nov. 11 in U.S. District Court in Cleveland, the suit also names Vujovic’s wife, Rada, as a defendant, but she has not been charged with any crimes.
NCUA is seeking a monetary judgment against the Vujovics that amounts to “three times the value of the funds that were unlawfully converted (in excess of $2.3 million) by the defendants,” according to the lawsuit.
What’s more, NCUA’s 27-page lawsuit claims the Vujovics “have been and continue to be unjustly enriched by their retention and use of (SPCFCU) funds reflected in their various accounts totally in excess of $2.9 million.”
In September, Svetislav pleaded not guilty to a 14 count indictment that charged him with financial fraud, money laundering, making false statements to a federal credit union and giving commissions or gifts for procuring loans.
According to the federal indictment, Svetislav allegedly set up six businesses, Cleveland Comfort Corp., Balkan Enterprise Inc., Balkan Contracting, GNRS Properties LLC and SND Inc., to fraudulently obtain loans from 2004 to 2008.
The indictment also alleged that Vujovic gave $20,000 in cash payments to Anthony Raguz, the former CEO/president of SPCFCU, who was sentenced to 14 years in federal prison in November 2012 for his central role that led to one of the largest fraud cases in U.S. credit union history.
Raguz admitted to approving more than 1,000 fraudulent loans totaling $70 million to over 300 account holders at credit union from 2000 to 2010. He also accepted bribes totaling $1 million to approve loans, according to the original indictment.
Although SPCFCU was not permitted to issue commercial loans, it did issue “share-secured” loans, which meant that the borrower pledged funds on deposit as collateral with SPCFCU that matched or exceeded the loan amount, court documents show. However, SPCFCU would sometimes issue “reset loans” to its members. A reset loan issued to cover delinquent payments on old loans, according to the federal indictment.
The NCUA lawsuit claims Vujovic’s wife, Rada, jointly at times applied for and obtained shared-secured loans. But the Vujovics failed to maintain in funds in their SPCFCU account that matched or exceeded the loans of more than $420,000 they obtained from the credit union, according to NCUA’s suit.
When the Vujovics did not repay the loans, SPCFCU reset the loans by paying off the past due principal and interest and established a new account in the borrowers’ name equal to the prior principal plus accrued interest, court documents show. What’s more, when Vujovic’s loan accounts were reset, additional loans were extended for his benefit, the NCUA alleges.
Svetislav Vujovic allegedly repeated this fraudulent scheme through the businesses he controlled and embezzled more than $2.3 million, the NCUA suit said.
The NCUA has projected its loss in the SPCFCU case to be $186.4 million. The liquidation of the credit union has so far netted $22.6 million in recoveries from all areas including loan payments and liquidation of cash accounts.
The agency has filed 61 lawsuits against SPCFCU-related parties claiming more than $4 million in damages and said late last year that it had recovered $1.2 million so far.