CLEVELAND, Ohio— One of the biggest failures in credit union history continues to have reverberations 15 years after its liquidation.

In 2010, St. Paul Croatian FCU was liquidated when it had approximately $240-million in assets and 5,400 members. At one point, NCUA put a share withdrawal limit of $5,000 per week in place as members raced to pull funds. The credit union failed due to fraud by its then CEO and staff and the failure drew considerable media attention.

At the time, it was the largest credit union failure in U.S. history, causing a $170-million loss to the NCUSIF, $72.5 million of which was to criminal fraud. More than two dozen people were prosecuted, many of whom were sentenced to prison

More Than $1 Million Allegedly Owed

Now, a Cleveland-area businessman owes $1.1 million stemming from loans he took out for his restaurants from the St. Paul Croation Credit Union, according to a lawsuit cited by the Plain Dealer. 

Zdenko Zovkic who previously owned popular restaurants XO Prime Steaks, Seasons and Jade Steak & Sushi, among others, which have since closed has been hit with a judge’s order to force Zovkic and his former wife to use money from the $650,000 sale of their former home in Moreland Hills, Ohio, to pay toward the loans and to pay $177,000 in damages, according to the Plain Dealer. 

The report said the lawsuit filed last month in federal court in Cleveland by SMS Financial, which was appointed by NCUA to help claw back outstanding loans after the credit union’s collapse. 

First Suit in 2013

“Zovkic was first sued in 2013 over some $2 million in loans he took out over the years for his restaurants. He was accused of misrepresenting information on loan applications and paying off previous loans with money from new loans, according to the lawsuit,” the Plain Dealer reported.

It added Zokic settled that lawsuit in 2014 and agreed to pay back $1.1 million, plus interest. That didn’t happen, the new lawsuit says, according to the Plain Dealer.