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TRENTON
- Attorney General Anne Milgram announced
that a Monmouth County man pleaded guilty
today to first-degree money laundering in
connection with a series of mortgage and
investment scams through which he and his
girlfriend stole approximately $2.9 million
from victims.
Spiro
Pollatos, 46, of Marlboro, pleaded guilty
to a charge of first-degree money laundering
before Superior Court Judge Salem Vincent
Ahto in Morris County. The charge was the
result of an investigation by the Division
of Criminal Justice Major Crimes Bureau.
Under
the plea agreement, the state will recommend
a sentence of 15 years in state prison,
with five years of parole ineligibility.
Pollatos must enter a consent judgment to
make full restitution to his victims and
must forfeit assets seized in the investigation.
An
investigation by the Division of Criminal
Justice determined that Pollatos conspired
with others, including his live-in girlfriend,
Crystal Velitschkow, 50, to steal approximately
$2 million through fraudulent loan services
for which he collected excessive fees and
commissions. In addition, Pollatos was charged
with inducing several victims to invest
approximately $890,000 to purchase the former
Yellow Rose Diner in Keyport. The deals
were bogus and the victims – including
an 80-year-old retiree who invested $500,000
– never got ownership of the business.
“This
defendant dealt in lies and deception, stealing
millions of dollars from his victims and
leaving behind a trail of financial devastation,”
said Attorney General Milgram. “With
this plea, he will face a lengthy prison
term. He also must pay restitution, starting
by forfeiting assets seized from him last
year in the investigation.”
From
January 2004 through March 2007, Pollatos
and Velitschkow funneled more than $2.7
million in criminal proceeds through a personal
bank account they controlled, using the
money to buy real estate, cars and boats
and pay personal expenses. Velitschkow pleaded
guilty on June 27 to second-degree money
laundering. She faces a sentence of 10 years
in state prison.
Pollatos
is scheduled to be sentenced on Nov. 15,
and Velitschkow is scheduled to be sentenced
on Nov. 11. They are being held in the Morris
County Jail in lieu of $2 million bail each.
Also
on June 27, Thomas Giannisis, 42, of Marlboro,
the owner of the Middletown Diner, pleaded
guilty to a third-degree charge of theft
by failure to make required disposition
of property received in connection with
the fraud involving the Yellow Rose Diner.
The state will leave his sentence to the
discretion of the court. His wife, Maria
Giannisis, 33, agreed to waive indictment
and be charged by accusation with the same
charge. She was admitted into the Pre-Trial
Intervention program.
The
case was investigated by Detective Sgt.
Louis A. Matirko of the Division of Criminal
Justice Major Crimes Bureau. It has been
prosecuted by Deputy Attorneys General Rodger
Wolf, Janet Bosi, Patrick Flor and Marysol
Rosero. Today’s plea was taken by
Deputy Attorneys General Rosero and Bosi.
Auditor Thaedra Chebra of the state Division
of Taxation and Chief Investigator Leona
Joyner of the Department of Banking and
Insurance Enforcement Bureau assisted in
the investigation.
State
investigators arrested Pollatos, Velitschkow,
Thomas Giannisis and three other defendants
on Dec. 19, 2007, on charges of conspiracy
to commit racketeering, theft and money
laundering. The state seized and placed
liens on seven bank accounts, five cars,
three boats, 12 pieces of real estate and
the Middletown Diner on Route 35 in Middletown.
Pollatos
was at the center of the schemes. Although
Pollatos lost his state mortgage broker’s
license after pleading guilty to theft in
May 2001 in a mortgage fraud scheme, he
began operating a business called Lenders’
Capital Mortgage Company in Hackensack,
which he licensed under the name of Velitschkow’s
brother-in-law, Thomas J. Prussack, 40,
of Keansburg. Prussack, one of the other
defendants charged in December, represented
himself as the owner.
Pollatos
targeted victims in the Greek community
who often were elderly. He advertised his
mortgage company in a Greek newspaper. Pollatos
offered to secure large loans for victims
who would not be able to get them in the
regular credit market. Pollatos and his
unlicensed co-defendants submitted false
information in processing loans and charged
clients excessive loan commissions and fees,
typically demanding the huge sums for the
first time at the loan closing. In some
cases, Pollatos stole the majority of the
loan proceeds. The defendants defrauded
clients of approximately $2 million through
such schemes.
In
one instance, Pollatos took an $85,000 commission
on a $245,000 home equity loan. In another,
he kept $133,000 in check proceeds that
he was supposed to use to pay down a first
mortgage for the borrower. He mortgaged
homes beyond their value and the owner’s
ability to pay. For example, he secured
$418,500 in loans on a Keansburg property
worth only $215,000.
In
offering loans, Pollatos and his co-defendants
operated under the names Lenders’
Capital Mortgage Company, Investors’
Mortgage Company, which was the business
tied to his 2001 guilty plea, and a third
phony name that was similar to the name
of a legitimate licensed firm. The schemes
caused financial devastation for at least
20 victims and had an adverse impact on
two financial institutions that provided
loans.
In
the fraud involving the Yellow Rose Diner,
Pollatos and Giannisis offered to become
partners with an 80-year-old retired food
supply salesman to run the diner. Through
Pollatos, the man mortgaged his home and
also obtained a home equity loan, investing
approximately $500,000 in loan proceeds
in the venture. While a $305,701 check from
the victim did go to the diner’s owner,
the sale of the business was not completed
and the victim never recovered his money.
While
Pollatos and Giannisis were still dealing
with the first victim, Pollatos secretly
solicited $150,000 from a second investor,
a woman, who also was told she could run
the Yellow Rose diner with them as partners.
The woman – believing she had purchased
the business without the real estate, but
with a lease on the building – completed
extensive renovations, only to be evicted
by the owner, who told her that her lease
was invalid.
The
other diner victims were Velitschkow’s
sister and brother-in-law, Prussack, who
gave Pollatos and Velitschkow $330,000 as
an investment in the diner. Pollatos and
Velitschkow spent the money on personal
expenses.
In
addition to Prussack, the other defendants
who were charged with Pollatos in the mortgage
fraud schemes were George Papas, 64, of
Ridgewood, Marco Sigona, 33, of Hackensack,
and Mario LaGrasta Jr., 35, of Little Ferry.
Though unlicensed, they assisted him in
soliciting and processing loans.
In
June, those four defendants – Prussack,
Papas, Sigona and LaGrasta – agreed
to waive indictment and be charged by accusation
with violation of the New Jersey Licensed
Lenders Act, a third-degree crime. They
were admitted by Judge Ahto into the Pre-Trial
Intervention Program, conditioned on their
providing truthful testimony in the state’s
investigation.
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