Koljo Nikolovski, who had been indicted for taking out millions of dollars in fraudulent loans from the $240 million St. Paul Croatian FCU which were never repaid and led to the credit union's collapse in 2010, pleaded guilty on Monday to 18 counts of bribery, bank fraud and money laundering.

Of the $5.6 million in loans Nikolovski obtained, $2 million was sent to bank accounts in the Balkan republic of Macedonia, according to court filings in the Cleveland case.

Nikolovski, is scheduled to be sentenced in April and could spend up to nine years in prison.

Earlier this month, the credit union's former CEO, Anthony Raguz, pleaded guilty to bank fraud and agreed to testify against Nikolovski, who was scheduled to go to trial in February. In addition, six other people pleaded guilty to bank fraud, including Nikolovski's former wife, and agreed to testify against him.

Raguz has admitted to accepting $1 million in bribes in exchange for approving more than 1,000 loans totaling $70 million to borrowers who had no intention of repaying funds. He agreed to forfeit the $1 million.

In addition, Raguz admitted he made the loans without requiring collateral and knew the borrowers had few assets, no employment history and often used fictitious names.

The loans were ultimately signed over to Nikolovski.

The NCUA conserved and then closed the credit union, located in the Cleveland suburb of Eastlake, Ohio, in 2010. The failure cost the NCUSIF $170 million. At least eight other borrowers have also been charged in the case.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Credit Union Management