CLEVELAND – A purported Macedonian crime kingpin obtained millions of dollars in fraudulent loans from the now-defunct St. Paul Croatian FCU after he threatened to shoot the credit union’s CEO and his family, federal authorities alleged today in documents filed with the federal court.
Federal prosecutors claim Koljo Nikolovski was solely responsible for convincing nine credit union members—five who were family members—to borrow $5.9 million from the credit union then funnel the funds to him. Nikolovski had “exclusive decision making authority over who would act as nominees; the amount of money nominees would receive for their participation; the number and amount of loans to request from St. Paul; the amount paid to (CEO Anthony) Raguz for providing fraudulent loan proceeds to Nikolovski and his nominees and the disbursement of loan proceeds,” prosecutors say.
When Raguz balked at extending additional fraudulent loans in 2009, “Nikolovski threatened to shoot Raguz and Raguz’s family.” “Out of fear for his life and the lives of his family members, Raguz agreed and, ultimately approved Nikolovski for an additional $2.7 million in fraudulent loan proceeds,” the Feds said.
“Ultimately, Nikolovski went to the credit union and told Raguz that he followed Raguz home and knew where Raguz’s family lived,” say the prosecutors. “Nikolovski then told Raguz that “people call him crazy and that he is known to shoot people.”
“Nikolovski then threatened to “shoot Raguz” and other members of his family if he either refused to provide the loan, or told anyone about the loans Nikolovski previously received,” the court papers say.
Nikolovski had been paying Raguz bribes to approve the fraudulent loans. Raguz has pleaded guilty to accepting bribes and has agreed to testify against others in the scheme, including at least five members of Nikolovski’s family. Among them are his ex-wife Rose Ann Nikolovski, her brother John Cendol, Jr., Cendol’s wife Ruth Cendol, and Koljo Nikolovski’s nephew, Marko Nikoli, all of whom have pleaded guilty to loan fraud. At least $70 million of fraudulent loans were eventually approved by Raguz.
The loan scheme sunk the one-time $240 million credit union and NCUA projects the failure will cost the National CU Share Insurance Fund $170 million to resolve, making it the biggest credit union fraud ever.
Nikolovski-- known in Macedonia as “Koljo the American” for his time spent traveling back and forth to the U.S—never worked a day in his life, but lived a life of luxury, wearing Rolex watches, driving Mercedes and BMWs, flying to expensive gambling trips, and flashing piles of cash, according to prosecutors. Millions of dollars from the St. Paul Croatian loans were wired to banks in Albania and Skopje, Macedonia, where authorities believe Nikolovski headed a local crime syndicate. While he was married to Rose Ann Nikolovski, he would regularly walk into her two-person beauty salon in Cleveland’s Eastlake suburb and take cash out of the register, but never held a job, according to prosecutors.
On the December 2010 day Nikolovski was arrested at his home by U.S. Marshals he was accompanied by two Serbian police officers and a Serbian nightclub bouncer, all of whom had accompanied Nikolovski on his return flight to the U.S. to an Erie, Penn., gambling casino prior to his arrest, prosecutors said.
When authorities searched Nikolovski’s home under a search warrant they found several loan statements bearing nominee names and Nikolovski’s address.
Nikolovski is scheduled to be sentenced May 1.
