CLEVELAND, Ohio (2/28/12)--A federal court in Cleveland, Ohio, sentenced a woman to one day in prison for her role in a $2.5 million loan fraud ring that led to the collapse of Eastlake, Ohio-based St. Paul Croatian FCU--one of the largest credit union failures in history.
Ruth Cendol, 55, of Kirtland, Ohio, also was ordered by U.S. District Judge Christopher Boyko to pay restitution totaling $260,000 and was placed on three years of supervised release. She had pleaded guilty to one count of bank fraud. Court records alleged that Cendol was one several defendants who allowed illegal transfers to her loan account at the credit union (News-Herald Feb. 22).
More than 1,000 fraudulent loans totaling more than $70 million were allegedly made to 300 account holders from 2000 to 2010 (News Now Jan. 4).
The fraud scheme resulted in nine arrests, including two central figures in the ring: Koljo Nikolovski, 49, of both Eastlake and Skopje, Macedonia, who pleaded guilty to 18 counts of bribery, bank fraud and money laundering; and Anthony Raguz, 51, of Mentor, former CEO of the defunct credit union, who pleaded guilty to issuing the loans and accepting more than $500,000 in bribes, kickbacks and gifts from people obtaining the fraudulent loans. Raguz is scheduled for sentencing on June 11. Nikolovski's sentencing has been set for April 23.
The credit union was placed into conservatorship on April 23, 2010, and closed the following May 1. It held $238.8 million in funds from 5,400 members when it collapsed, costing the National Credit Union Share Insurance Fund $170 million. The collapse has prompted lawsuits by the National Credit Union Administration seeking to recoup some of the losses (News Now Jan. 4).