Seven individuals in the Cleveland area have agreed to plead guilty to bank fraud charges in the 2010 failure of St. Paul Croatian Federal Credit Union and will testify against the main figure in the case, a purported international crime figure.
The government expects to call the individuals to testify in the trial of Koljo Nikolovski, an alleged Albanian crime figure who authorities say secreted more than $6 million of phony residential loan proceeds to personal bank accounts in his native Albania and adjacent Macedonia, according to court records.
The individuals have pled guilty under the condition they cooperate with federal prosecutors in the case, according to court documents. Consequently, prosecutors have requested the sentencing for the seven be continued until after the Nikolovski trial, which is scheduled to begin February 13 in Cleveland.
The massive loan fraud forced the National Credit Union Administration to take over the credit union, based in the Cleveland suburb of Eastlake, Ohio, in April 2010 at an estimated loss of $170 million to the National Credit Union Share Insurance Fund. The huge loss has prompted a flurry of lawsuits by NCUA seeking recovery of the fraudulent loan proceeds from the borrowers.
Among those who have agreed to plead guilty are Anthony Raguz, the former CEO of the $240 million credit union, and Rose Nikolovski, Koljo Nikolovski's ex-wife, who allegedly acted as one of dozens of straw borrowers in the case.
Raguz admitted to accepting $1 million in bribes in exchange for approving more than 1,000 loans totaling $70 million to straw borrowers who never intended to repay the funds that were ultimately signed over to Koljo Nikolovski.
As part of his plea agreement, Raguz will forfeit $1 million that will go to NCUA to help offset the massive losses in the case.
Under a proposed plea agreement, Rose Nikolovski has agreed to testify against her ex-husband and to forfeit $850,000 in Macedonian bank accounts.
Others who have agreed to plead guilty are: John Cendol, who is Rose Nikolovski's brother, Ruth Cendol, Edward Watral, Daniel Kocher and Jennifer Cerjan. All of the defendants are potential witnesses in the trail of Koljo Nikolovski.
At least eight other borrowers have also been charged in the case.
