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TRENTON - Attorney General
Anne Milgram and Criminal Justice Director
Deborah L. Gramiccioni announced that a Monmouth
County man was sentenced to state prison today
in connection with a series of mortgage and
investment scams through which he stole approximately
$2.9 million from victims.
Spiro Pollatos, 46, of Marlboro,
was sentenced to 13 years and six months in
state prison, including four years and six
months without possibility of parole, by Superior
Court Judge Salem Vincent Ahto in Morris County.
Pollatos pleaded guilty on Oct. 17 to a charge
of first-degree money laundering. Under the
plea agreement, he was required to enter a
consent judgment to pay restitution to his
victims and forfeit assets seized in the investigation.
“This defendant caused
financial devastation for many victims,”
said Attorney General Milgram. “We are
committed to vigorously investigating and
prosecuting financial fraud, as this lengthy
prison sentence demonstrates.”
An investigation by the Division
of Criminal Justice Major Crimes Bureau 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 about $890,000 to buy the
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.
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 to pay personal expenses.
Velitschkow was sentenced
on Dec. 19, 2008 to 10 years in prison by
Judge Ahto. She pleaded guilty on June 27,
2008 to second-degree money laundering.
On Jan. 9, Thomas Giannisis,
42, of Marlboro, the owner of the Middletown
Diner, was sentenced to 180 days in jail as
a condition of a four-year term of probation
by Judge Ahto. He pleaded guilty in June to
third-degree theft by failure to make required
disposition of property received in connection
with the fraud involving the Yellow Rose Diner.
He also entered a consent judgment to pay
$73,400 in restitution.
Giannisis’ 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 sentencing
hearing was handled by Deputy Attorney General
Rosero. 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, advertising 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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