CLEVELAND An international crime figure who received almost $6 million in phony loans from St. Paul Croatian FCU said he was duped into accepting a plea deal that resulted in an 18-year sentence behind bars twice the maximum nine-year term he had agreed to.
Lawyers for the Koljo Nikolovski, the purported Balkans crime lord and one of the biggest borrowers in the $185-million loan fraud, said a plea deal Nikolovski had agreed to before the judge’s May 2012 sentence called for no more than 108 months (nine years) in prison. Instead, the judge rejected the prosecutors’ recommended sentence and sent Nikolovski to prison for 216 months (18 years).
Nikolovski was the first big name caught in the huge fraud that sunk the $240-million Eastlake credit union. Since then, hundreds of rank-and-file members, and a handful of business borrowers, have been convicted of arranging loans through bribes and kickbacks to the credit union’s CEO, Anthony Raguz. Raguz, who made more than 1,000 loans under the fraud scheme, was sentenced to 14 years a shorter term than Nikolovski because of his cooperation with prosecutors.
Nikolovski was one of the bigger borrowers. He not only took out loans himself, but had several family members take out mortgages in amounts averaging $250,000 that they never intended to repay. Court records show Nikolovski, known in the Balkans as “Koljo the American” for his frequent trips back and forth to the U.S., wired almost $6 million of the proceeds from the various loans to bank accounts in Macedonia and Albania. NCUA and the U.S. Justice Department are working to get the money back as part of a restitution order Nikolovski agreed to in his plea. Prosecutors said when Raguz told Nikolovski he wanted to stop the flow of fraudulent loans, Nikolovski threatened to shoot him.
NCUA estimates the fraud and subsequent liquidation of St. Paul Croatian FCU cost the National CU Share Insurance Fund $185 million, making it the biggest credit union fraud ever.
