Last week nine individuals, including the credit union’s CEO Anthony Raquez was charged in a federal indictment with accepting $500,000 in kickbacks in exchange for approving millions of dollars in loans they had no intentions of repaying. Eight other individuals, including a purported international crime figure, Koljo Nikolovski, Nikolovski’s wife and nephew, were charged with taking out the loans. Authorities said Koljo Nikolovski wired millions of dollars from the loans to bank accounts in Skopje, Macedonia, which have yet to be recovered.CLEVELAND – NCUA alleged this week that St. Paul Croatian FCU, the one-time $240 million credit union liquidated last year, helped finance an $8 million real estate Ponzi scheme that bilked dozens of parishioners at St. Paul Croatian Church here.
Documents filed this week in U.S. Bankruptcy Court indicate the credit union, along with Fifth Third Bancorp of Cincinnati and JP Morgan Chase were the major lenders for Integrity Financial AZ, LLC which raised millions of dollars in 2008 and 2009 to purportedly fund speculative real estate developments in Tonopah, Arizona, a town 55 miles west of Phoenix. Authorities have filed criminal and civil complaints against the company claiming it was a so-called Ponzi scheme in which early investors–most of them parishioners at St. Paul Croatian Church-- were paid returns from later investors to make it appear the scheme was paying off.
NCUA claims the scheme was partially funded by the credit union, one of the biggest failures in recent years, and that Stanley Paulic, one of the main partners of Integrity Financial, still owes the estate of the failed credit union $1.2 million in unpaid loans. NCUA has asked the bankruptcy court to reject a bid to dismiss the credit union loans as part of Paulic’s Chapter 7 filing.
The allegations are the latest involving St. Paul Croatian, which NCUA estimates will cost the National CU Share Insurance Fund $170 million in losses, one of the insurance fund’s biggest losses ever.
Last week nine individuals, including the credit union’s CEO Anthony Raquez was charged in a federal indictment with accepting $500,000 in kickbacks in exchange for approving millions of dollars in loans the borrowers had no intentions of repaying. Eight other individuals, including a purported international crime figure, Koljo Nikolovski, as well as Nikolovski’s wife and nephew, were charged with taking out the loans. Authorities said Koljo Nikolovski wired millions of dollars from the loans to bank accounts in Skopje, Macedonia, which have yet to be recovered.
