CLEVELAND (8/9/12)--A local businessman from Albania was sentenced Tuesday in a federal court in Cleveland, Ohio, to nine years in prison for his role in a fraud ring that brought about the collapse in 2010 of Eastlake, Ohio-based St. Paul Croatian FCU.
Arben "Benny" Alia, 35, of Eastlake, who owns a local bar and grill and had pleaded guilty to money laundering, also was ordered to pay $3.5 million in restitution to the credit union. Alia is a native of Albania and is not a U.S. citizen. After serving his prison term, he will be deported (News Herald Aug. 7).
The National Credit Union Administration (NCUA) placed St. Paul Croatian FCU into conservatorship on April 23, 2010, and shuttered it the following May 1. Its collapse cost the National Credit Union Share Insurance Fund about $170 million.
The credit union's former CEO, Anthony Raguz, pleaded guilty to issuing more than 1,000 fraudulent loans totaling more than $70 million to 300 account holders and accepting more than $500,000 in bribes, kickbacks and gifts from the borrowers. (News Now May 14 and 31). His sentencing is scheduled for Nov. 20.
Alia was one of more than 19 individuals arrested in the case. He was one of the organizers but not a supervisor, and a gambling addiction contributed to the offense, said his attorney. Alia took out his first loan in 2005 from St. Paul to buy a restaurant, which he sold the following year. He continued to work there until he bought Milano's Bar and Grill in 2009. He agreed to forfeit his bar, liquor license and a 2007 Mercedes.
The alleged ringleader in the loan fraud scheme, Koljo Nikolovski, 49, of Eastlake and Skopje, Macedonia, was sentenced in May to 18 years in prison. He allegedly obtained about $2.9 million in loans at the credit union from 2003 through 2005 (News-Herald May 12).