Youngstown Daily Legal News

Conviction upheld in multi-million dollar money laundering scheme

ANNIE YAMSON
Special to the Legal News
Published: February 17, 2017

A federal court of appeals recently ruled that the "voluminousness" of the government's evidence against an Albanian immigrant who ran a massive fraudulent loan operation was "astounding."

A panel of three judges in the 6th U.S. Circuit Court of Appeals held that Gezim "Jimmy" Selgjekaj was properly convicted and sentenced to 25 years in federal prison for fraudulently obtaining loans from the St. Paul Croatian Federal Credit Union with the help of Anthony "Tony" Raguz, the credit union's chief operating officer.

Court documents state that Selgjekaj and two of his business partners, Arthur Hoxha and Judmir Capoj, repeatedly bribed Raguz who, in return, issued unauthorized loans to Selgjekaj and conducted a massive cover-up operation at the credit union.

"Defendant never had to intention, nor the ability, the repay the loans," Judge Richard Suhrheinrich wrote in the opinion he authored on behalf of the court of appeals.

Selgjekaj was charged in the U.S. District Court for the Northern District of Ohio with 28 offenses including conspiracy to commit financial institution fraud, bribery and money laundering.

Hoxha and Capoj were charged as codefendants and pleaded guilty as did Raguz, who was charged separately.

Selgjekaj, however, chose to take his case to trial and was found guilty on all counts with the exception of one bribery charge.

"The government presented overwhelming evidence at trial of a conspiracy, countered only by defendant's claims of innocence from the stand," Suhrheinrich wrote. "Raguz's testimony established that, because defendant bribed him, he approved and issued numerous unauthorized loans for defendant and his various businesses, which no financial institution in its right mind would have approved."

According to a government loan and cash flow analysis, Selgjekaj's companies did not have the financial wherewithal to even make monthly interest payments on the loans, which eventually resulted in a total loss amount of $10.5 million.

The testimony of Raguz and Hoxha also indicated that, even after he was arrested, Selgjekaj continued to call the shots from behind prison walls.

"Defendant alleges the evidence is insufficient to show he intended to conspire with Raguz because Raguz engaged in some of the same fraudulent practices for other wrongdoers," Suhrheinrich wrote. "Further, (Selgjekaj) argues he had insufficient knowledge of how Raguz and his staff hid the fraud from the credit union board and regulators, and that these actions cannot be attributable to defendant."

The appellate panel called the arguments "meritless" and noted that even if Selgjekaj was unaware of the credit union backroom dealings, it would not mitigate or absolve his guilt.

"Each conspirator is responsible for the acts of his coconspirators, so long as the act, constituting a substantive crime, was a reasonably foreseeable consequence of the conspiracy," Suhrheinrich wrote. "Fraudulent accounting practices are reasonably foreseeable acts of disguising bank fraud and are therefore attributable to defendant."

In his brief to the appellate court, Selgjekaj argued that there was insufficient evidence of his intent to defraud the credit union and he essentially pinned the blame on Raguz, alleging that he simply asked Raguz for loans and that Raguz granted them.

In response, Suhrheinrich wrote that Selgjekaj's argument not only "ignores conspiracy and corporate law, but also the staggering amount of evidence presented by the government."

The appellate panel refused to reiterate all of the prosecution's evidence but did point to evidence presented at trial that Selgjekaj took out loans in the name of defunct and nonexistent businesses and proof of "loan kiting" when Selgjekaj obtained new loans in order to make payments on old ones in an effort to prevent his debts from appearing delinquent.

Testimony from an FBI special agent established that Selgjekaj was running a "shell game" in which he would simply move money around to make his loans look current.

Selgjekaj was also given an obstruction-of-justice enhancement for repeatedly perjuring himself at trial.

The court of appeals concluded that the evidence against Selgjekaj was overwhelming and that his sentence, which was greater than the other scheme participants was appropriate.

Judges David McKeague and Jeffrey Sutton joined Suhrheinrich to form the majority.

The case is cited United States v. Selgjekaj, Case No. 15-4425.

[Back]