CLEVELAND (11/26/12)--Another man has pleaded guilty for his role in a massive loan fraud scheme that led to the collapse of Eastlake, Ohio-based St. Paul Croatian FCU. Meanwhile the credit union's former CEO is scheduled to be sentenced today for his involvement in what became one of the largest credit union failures in history.
Marko Nikoli, 33, pleaded guilty in a U.S. District Court in Cleveland last week to two counts of bank fraud and one count of money laundering, which stem from a purchase of a $60,000 Mercedez Benz (News-Herald.com Nov. 20). Nikoli was one of at least 19 defendants arrested in the case. Many of them were paid to apply for the fraudulent loans. His sentencing is scheduled for March 18.
Nikoli is nephew of the alleged ringleader in the scam, Koljo Nikolovski of Eastlake and Skopje, Macedonia. Nikolovski is serving 18 years in prison for the fraud, which involved more than 1,000 fraudulent loans for more than $70 million to roughly 300 accountholders at the credit union (News Now Nov. 8).
The credit union's CEO, Anthony Raguz, also has pleaded guilty--to six counts of bank fraud, money laundering and bank bribery. He allegedly admitted issuing the loans and accepting more than $500,000 in bribes, kickbacks and gifts from the borrowers. His sentencing hearing, originally set for last Tuesday was rescheduled for today.
The National Credit Union Administration placed the credit union into conservatorship on April 23, 2010, and liquidated it a week later after determining the credit union was insolvent. The failure cost the National Credit Union Share Insurance Fund about $170 million. NCUA has filed a number of lawsuits against the parties involved in the loan scam to try to recoup some of the losses.