A federal grand jury indicted a St. Paul Croatian FCU member for bank fraud and money laundering that cost the credit union $2.5 million and led to its eventual closing.
A Cleveland grand jury indicted Koljo Nikolovski on two counts of bank fraud and one count of money laundering and alleged that he fraudulently received bank loans totaling $2.5 million by "falsely listing the names of other persons as the applicants and intended recipients of these loans."
Nikolovski was ineligible to receive loans because he had already defaulted on more than $1 million in loans he had received.
The money laundering transaction stems from his wiring $2.3 million in loan proceeds from his account at a Cleveland area bank to a bank in Skopje, Macedonia.
Nikolovski lives in Eastlake Ohio and in Skopje. There was no phone listing for him in the Ohio directory assistance.
"The collapse of the St. Paul Croatian Federal Credit Union was a tremendous hardship in this community and requires a thorough investigation," U.S. Attorney Steven M. Dettelbach said in a statement. "Today's charges demonstrate that we intend to get to the bottom of any criminal wrongdoing that may have contributed to the failure of this financial institution, no matter where the evidence leads."
The NCUA liquidated St. Paul FCU on May 1, a week after placing it into conservatorship. According to its last financial report filed in April, its stated net worth ratio was 12.6%; its delinquent loan ratio was 4.3%. Prior to that, the credit union hadn't reported delinquent loan data in the four previous reports.
According to that financial report, he credit union's loan portfolio increased by 3% during the first three months of 2010. Its real estate loans fell by 71.1% and its unsecured loans fell by 46.9% but its other loans increased by 32.4%.
The report showed that 16.5% of its real estate loans were delinquent by more than one month and 0.72% of those loans were delinquent by more than two months Its return on assets was 2.31%.
Before the agency announced the closing of the credit union, it announced that b Region III Director Alonzo Swann was being transferred to be special assistant to NCUA Executive Director David Marquis. Swann subsequently retired from the agency.
The credit union had almost 5,400 members.