Woman Pleads Guilty to Money Laundering for Assisting Boyfriend in $3 Million Mortgage and Investment Scams
TRENTON – Attorney General Anne Milgram and Acting Criminal Justice Director Deborah Gramiccioni announced that a Monmouth County woman pleaded guilty to money laundering today in connection with a series of mortgage and investment scams allegedly orchestrated by her boyfriend through which they stole more than $3 million from victims.
An investigation by the Division of Criminal Justice determined that Spiro Pollatos, 45, of Marlboro, allegedly conspired with others, including his live-in girlfriend, Crystal Velitschkow, 50, to steal more than $2.5 million through fraudulent loan services for which he collected excessive fees and commissions. In addition, he allegedly induced 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.
The investigation determined that from January 2004 through March 2007, Pollatos and Velitschkow funneled more than $2.7 million in alleged criminal proceeds through a personal bank account in her name, using the money to finance purchases of real estate, cars and boats, and to pay other personal expenses.
According to Acting Director Gramiccioni, Crystal Velitschkow, 50, of Marlboro, pleaded guilty today to second-degree money laundering before Superior Court Judge Salem Vincent Ahto in Morris County. Under the plea agreement, she faces a sentence of 10 years in state prison. The judge scheduled her sentencing for Aug. 1.
“We charge that this couple ruthlessly stole millions of dollars from their victims, frequently preying on members of the Greek community who, in some instances, entrusted the defendants with everything they owned,” said Attorney General Milgram. “Today Ms. Velitschkow admitted her part in the fraudulent schemes, for which she faces a lengthy state prison sentence.”
Also today, 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 today into the Pre-Trial Intervention program.
State investigators arrested Pollatos, Velitschkow, Thomas Giannisis and three other defendants on Dec. 19 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 two diners – the Middletown Diner on Route 35 in Middletown and the former Yellow Rose Diner, now the Village House Neighborhood Restaurant on Route 36 in Keyport.
Pollatos allegedly 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, 47, 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 allegedly 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 allegedly stole the majority of the loan proceeds. It is alleged that the defendants defrauded clients of more than $2.5 million through such schemes.
In one instance, Pollatos took an $85,000 commission on a $245,000 home equity loan. In another, he allegedly 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.
“This is a complex case involving at least 20 victims and numerous financial transactions,” said Acting Director Gramiccioni. “The investigators and attorneys involved skillfully unraveled the defendants’ tangled web of fraud to ensure that they will be brought to justice.”
The case was investigated by Detective Sgt. Louis A. Matirko of the Division of Criminal Justice Major Crimes Bureau. It is being prosecuted by Deputy Attorneys General Rodger Wolf, Janet Bosi, Patrick Flor and Marysol Rosero. The case was referred to the Division of Criminal Justice by the state Department of Banking and Insurance. Investigator 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.
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.
It is alleged that 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 $240,000 as an investment in the diner. Pollatos and Velitschkow allegedly spent the money on personal expenses.
In addition to Prussack, the other defendants charged with Pollatos in the mortgage fraud schemes are George Papas, 64, of Ridgewood, Marco Sigona, 32, of Hackensack, and Mario LaGrasta Jr., 35, of Little Ferry. Though unlicensed, they allegedly assisted him in soliciting and processing loans.
Three of those defendants agreed this week 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. Papas was admitted into PTI on Tuesday, and Prussack and LaGrasta were admitted into PTI today.
Pollatos and Velitschkow are each being held in the Morris County Jail. Bail for Pollatos is set at $2 million.
Pollatos is charged with first-degree money laundering, second-degree conspiracy to commit racketeering, and second-degree theft. Sigona is charged with second-degree conspiracy to commit racketeering. He is free on $5,000 bail.
The charges against those defendants are merely accusations and they are presumed innocent until proven guilty.
The first-degree money laundering charge carries a maximum sentence of 20 years in state prison and a criminal fine of up to $500,000. Second-degree crimes carry a maximum sentence of 10 years in state prison and a criminal fine of $150,000.
Third-degree crimes carry a maximum sentence of five years in prison and a $15,000 fine.
