Former Trumbull County Commissioner Ted M. Vannelli remains free on a $20,000 unsecured bond awaiting sentencing after pleading guilty to two charges linking him to a fraud and money laundering scheme that reportedly collapsed an Eastlake credit union.
A federal grand jury in Cleveland returned a 37-count indictment in February against Vannelli, 66, of Willoughby, his son-in-law, A. Eddy Zai, and local accountant Zrino Jukic, with 25 of those charges linking them with participating in a fraud against St. Paul Croatian Federal Credit Union, formerly in Eastlake. They were among 19 charged in the scheme, at least half of whom have been convicted.
Zai, a prominent Pepper Pike financier, is accused as the mastermind of the scheme in which fraudulent loan applications were submitted to the St. Paul Croation Federal Credit Union. It led to $16.7 million in fraudulent loans, which were not repaid and the credit union's eventual failure.
Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, called it ''a conspiracy that resulted in one of the largest credit union collapses in history. This has been a long and thorough investigation and will continue."
Zai and Vannelli are accused of paying the St. Paul CEO with $100 bills hand-delivered in envelopes in exchange for his approval of the loans, according to the indictment.
Vannelli faced one count each of bank bribery, conspiracy, bank fraud and making a false statement to a bank. He pleaded guilty before federal Judge John R. Adams to bank bribery and conspiracy April 10.
Zai, 43, of Pepper Pike still faces two counts conspiracy, two counts bank fraud, one count bank bribery, 11 counts money laundering, 17 counts making false statements to a bank, one count making false statements to federal agents.
Jukic, 41, of Cleveland still faces one count each of bank fraud and money laundering.
The conduct took place between December 2003 through March 2010, according to the indictment.
Vannelli was a Trumbull County commissioner from 1979 until 1982, when he lost a bid for re-election to former Hubbard Mayor Arthur U. Magee in the 1982 Democratic primary.
The former commissioner also built a 22-room mansion in 1980 on 65 wooded acres with three ponds on state Route 534 just north of Southington Center. Vannelli lost the property in foreclosure and it was bought for $300,000 at a sheriff's sale in 1989 by boxer Mike Tyson when he was heavyweight champion of the world.
The house remains on the market today for $1.3 million and has been the scene break-ins by vandals.