CLEVELAND – A local church – stuck with a $1.5 million loss after the failure of St. Paul Croatian FCU – has filed legal papers with a federal court to obtain rights to the lost funds from $3.3 million in restitution being channeled to NCUA.
The church, Holy Love Ministries, was the biggest victim of the massive fraud, which is projected to cost NCUA $170 million in losses. Some of those losses were expected to be erased by an estimated $3.3 million one of the fraud’s chief architects, Macedonian crime figure Koljo Nikolovski, has agreed to repatriate from his Macedonian and Albanian bank accounts.
But the tiny church has petitioned the U.S. District Court for the Eastern District of Ohio, to divert almost half of the Nikolovski funds – $1.5 million – to repay it for the loss of its deposits.
The church had more than $1.7 million deposited with St. Paul Croatian in April 2010 when NCUA took the one-time $240-million credit union over. The regulator liquidated it a few days later as the scope of the massive fraud emerged. As part of the liquidation process, NCUA paid most depositors up to the federal deposit insurance limit of $250,000, leaving Holy Love with a $1.5 million loss.
The tiny church appealed the ruling to the NCUA Board, which rejected the plea. It then filed a civil suit against NCUA seeking payment of the lost funds.
So far, 12 individuals, including Nikolovski, have been convicted of a massive fraud by which they obtained tens of millions of dollars in loans they never intended to repay. Anthony Raguz, the former CEO of St. Paul Croatian, has pleaded guilty to accepting more than $500,000 in bribes to approve the fraudulent loans.
“Restitution is an appropriate sanction in this case given the magnitude of Holy Love’s losses and that Holy Love has received but a small fraction of the total loss in the form of insurance from [NCUA], and that the defendants have not paid any of what they stole from Holy Love,” wrote the church’s lawyer in the court pleading.
