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CU System
St Paul Croatian FCU Fraud Ring Member Sentenced
CLEVELAND (3/20/13)--A man who pleaded guilty to working with a loan fraud ring that brought about the collapse in 2010 of Eastlake, Ohio-based St. Paul Croatian FCU has been sentenced Monday to 27 months in prison and ordered to pay $1 million in restitution.

Marko Nikoli, 35, was sentenced in a U.S. District Court in Cleveland. He had pleaded guilty to two counts of bank fraud and one count of money laundering. The latter charge stemmed from the purchase of a $60,000 Mercedes Benz (News-Herald.com March 18).

One of nearly two dozen persons arrested in connection with the fraud, Nikoli is the nephew of Koljo Nikolovski, considered the ringleader for the fraud scheme. Niklovoski, of both Eastlake and Macedonia, is serving an 18-year prison term in connection with more than $2.9 million in fraudulent loans.

The loan scheme involved more than 1,000 loans for more than $70 million combined to about 300 accountholders at the credit union.  The credit union's CEO, Anthony Raguz, is serving a 14-year prison sentence and was ordered to pay $72 million for pocketing bribes, kickbacks and cash gifts related to the loans.

The National Credit Union Administration placed the credit union into conservatorship in April 2010 and liquidated it a week later, saying it was insolvent. The conservatorship reflected $170 million in losses to the National Credit Union Share Insurance Fund in one of the biggest credit union failures in U.S. history.


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