CLEVELAND – A Balkans crime figure who threatened to shoot the CEO of St. Paul Croatian FCU if he didn’t continue to approve fraudulent loans was sentenced this afternoon to 18 years in prison for the multi-million scheme that helped cause the biggest credit union fraud ever.
Koljo Nikolovski—known as “Koljo the American” for his travels back and forth between his native Macedonia and the U.S.—was also ordered to pay nearly $6 million in restitution to help defray the estimated $170 million cost by NCUA to resolve the failure of the one-time $240 million credit union.
Authorities said Nikolovski enlisted numerous straw borrowers, including is ex-wife and four other family members, to borrow mortgages of around $260,000 from the credit union by bribing the credit union’s CEO Anthony Raguz. Each of the straw borrowers earned $5,000 for the loans they never intended to repay and passed the proceeds on to Nikolovski, who wired as much as $5 million of it his bank accounts in Skopje, Macedonia.
When Raguz began to balk at the loan scheme Nikolovski threatened to kill and his family, authorities said.
But the originator of the massive loan scheme is unclear because Raguz has also admitted his role in approving as much as $17 million of fraudulent loans to a well-known local developer, A. Eddy Zai, and former local politician Ted Vannelli, Zai’s father-in-law. Vannelli has pleaded guilty to bribing Raguz with envelopes stuffed with $100 bills and is cooperating with prosecutors in the investigation.
The straw borrowers in Nikolovski’s scheme, including his ex-wife, brother-in-law, sister-in-law and nephew, have all pleaded guilty and agreed to pay restitution for their loans and to serve a week in prison.
St. Paul Croatian was taken over and liquidated by NCUA in the spring of 2010 and is believed to be the biggest credit union fraud ever.
