Anthony Raguz -- the Mentor man whose fraudulent loans caused the St. Paul Croation Federal Credit Union to collapse -- was sentenced to 14 years in federal prison Monday morning.
Raguz, 52, was the chief operating officer of the credit union from 2000 to 2010. During that time he issued more than 1,000 fraudulent loans worth more than $72 million, Assistant U.S. Attorney John Sammon said.
He was also received between $500,000 and $1 million worth of bribes, kickbacks and gifts in exchange for the fraudulent loans.
His actions helped cause one of the largest credit union failures in American history and the credit union's ensuing liquidation cost the National Credit Union Share Insurance Fund $170 million.
Raguz , in Sept. 2011.
However, since authorities approached Raguz in 2010, he has cooperated with the investigation.
Sammon told U.S. Northern District Court Judge Christopher Boyko that the U.S. Attorney's Office has successfully prosecuted more than 20 people in this case, largely because of Raguz's cooperation.
"From the outset of the investigation, (Raguz) has fully admitted his conduct. He has never denied or even minimized," Sammon said.
"He provided essential details about the groups we have prosecuted."
Raguz spoke during his sentencing and attributed his actions to greed initially and then fear of getting caught and losing everything.
"I was driven by my ego and greed, and my rational thinking was clouded by my fear of losing my job and my stature in the community," he said.
He apologized to the people who gave to the credit union, his employees who lost their job and the NCUSIF who he cost millions of dollars.
"A day doesn't go by where I don't think of their anguish, their suffering and their anger," Raguz said.
Boyko compared Raguz to Dr. Jekyll and Mr. Hyde during the sentencing.
"There seems to be one Anthony Raguz who everyone loves and no one can believe he did this. Then there's another Anthony Raguz that crept out of the dark and did do this," the judge said.
Boyko also noted that Raguz had no criminal convictions before the fraud cause.
"No criminal history, but you went from zero to 200 mph, nothing to the big time," Boyko said.
The credit union had $238 million in assets. The judge attributed that to the trust people had in the institution -- a trust Boyko violated.
"There were a lot of hardworking people putting money in there," Boyko said. "That shows me a lot of people trusted this institution because it was their people."
Boyko said that violation of trust and the magnitude of the fraud were the decisive factord that led him to give Raguz one of the more stringent punishments he could.
He sentenced Raguz to 14 years in federal prison and then three more under supervision.
He also ordered Raguz to pay more than $71 million in restitution. (Raguz has already paid $1 million.)
Twenty-five percent of Raguz's earnings while in prison will go to paying the restitution; 10 percent, during his three years of supervision and to be decided by the court from thereon.
Boyko noted that none of this multimillion-dollar fraud case could have occurred without Raguz.
"Without you, the money does not move. You were the one approving the loans," he said.