CLEVELAND (2/1/12)--A central figure in a loan scam that caused the collapse of St. Paul Croatian FCU, East Lake, Ohio--in one of the largest credit union failures in U.S. history--pleaded guilty Monday to 18 counts of bribery, bank fraud and money laundering.
Koljo Nikolovski, 49, a resident of both East Lake and Skopje, Macedonia, entered the plea in the U.S. District Court in Cleveland. The charges stemmed from his alleged role in a $2.5 million fraudulent loan scam in which he allegedly obtained several loans worth about $2.9 million from 2003 through 2005 from the credit union (Cleveland.com and News-Herald.com Jan. 31).
He allegedly placed the money in a personal bank account before wiring about $2.3 million to a bank in Skopje. Local media reported that he was not eligible for the loans because he had previously defaulted on loans totaling more than $1 million (Cleveland Plain Dealer Jan. 5).
Nikolovski was one of nine people charged in the case. He has been linked by Macedonian authorities to organized crime there. He is scheduled for sentencing on April 23.
Anthony Ragus, 51, of Mentor, former CEO of the defunct credit union, pleaded guilty earlier this month to issuing more than 1,000 fraudulent loans to more than 300 account holders from 2000 to April 2010, according to the Justice Department documents (News Now Jan. 4). He allegedly accepted more than $500,000 in bribes, kickbacks and gifts from people obtaining the fraudulent loans. His sentencing will be Feb. 24.
St. Paul Croatian FCU was placed into conservatorship on April 23, 2010, and closed the following May 1. It held $238.8 million in funds from 5,400 members when it collapsed, costing the National Credit Union Share Insurance Fund $170 million. The collapse has prompted lawsuits by the National Credit Union Administration seeking to recoup some of the losses (News Now Jan. 4).