St. Paul Croatian Produces New Fraud Defendant
Nearly four years after the collapse of St. Paul Croatian Federal Credit Union, federal prosecutors in Cleveland announced Wednesday they have indicted yet another person who allegedly bilked the failed Eastlake, Ohio-based credit union out of $3.7 million, using some of the funds to buy and sell property in downtown Cleveland.
Sato Satka, 65, of the Cleveland suburb of Lakewood, was charged with one felony count each of conspiracy, bank fraud and bank bribery. He is scheduled to be arraigned March 13 in Cleveland’s U.S. District Court.
Prosecutors allege Satka conspired with others, including Anthony Raguz, the former president/CEO of SPCFCU who was sentenced to 14 years in federal prison in November 2012.
Satka paid bribes and kickbacks to Raguz for using his position at the credit union to approve numerous loans to Satka through family members and business he controlled, according to the indictment.
From 1999 through 2004, Satka, through his businesses and family members, received more than $4.4 million in loans from SPCFCU, but he made little or no monthly payments to the credit union, federal prosecutors said.
As a result, the loans fell into default. Raguz concealed this information from the board of directors and examiners through resets to make it appear the loans were not in default, according to the indictment.
In October 2003, Satka purchased Cleveland commercial property for $460,000.
Then, in November 2004, Satka recruited a yet-to-be-charged person identified in court documents as J.P. to apply for multiple fraudulent loans from SPCFCU.
According to court documents, Satka sold the commercial property he bought for $460,000 to J.P.’s company, Metropolitan Restaurant Systems, for $3 million.
To induce Raguz to approve J.P.’s loan, Satka handed Raguz a brown paper bag filled with $90,000 in cash. Satka allegedly told Raguz that the money was for the approval of J.P.’s loan, and it could be used to settle Satka’s loans to SPCFCU, court documents show.
Raguz approved a total of $3.7 million in loans to 10 enterprises controlled by J.P., of which approximately $3.6 million was used to pay off loan balances on accounts held by Satka, his relatives or businesses that he controlled.
However, J.P. made no payments on the $3.7 million in loans he received, according to the indictment.
About two dozen people have been convicted of embezzling more than $71 million from SPCFCU. The credit union was placed into conservatorship by the NCUA 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 hold $239 million in assets.