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North Bergen Man Indicted for Mortgage, Insurance and Tax Fraud

The New Jersey Attorney announced that a North Bergen man was indicted for Theft by Deception and related charges arising from a mortgage fraud and insurance fraud scheme related to a multi-million dollar residential real estate deal on property located in Saddle River, New Jersey.
The Attorney General said that Paul LoPapa, 54, of North Bergen, Hudson County, was named in a 15-count State Grand Jury indictment yesterday charging him with Theft by Deception and Misconduct by a Corporate Official, both charges of the second degree; one count of Attempted Theft by Deception, three counts of Failure to File New Jersey Income Tax - Resident Return, three counts of Failure to Pay New Jersey Gross Income Tax with Intent to Evade, all charges of the third degree; and two counts of Falsifying Records and four counts of Forgery, all charges of the fourth degree.

The investigation was conducted by the Division of Criminal Justice’s Office of Insurance Fraud Prosecutor and by the New Jersey State Police.

If convicted of all counts, LoPapa faces up to 20 years in State prison and more than $100,000 in criminal fines.

According to Acting Insurance Fraud Prosecutor John J. Smith, the indictment alleges that between November 1, 1995 and February 1, 1996, LoPapa, through his real estate partnership known as Castle Rock Real Estate, purchased residential real estate located at 73 and 77 East Saddle River Road in Saddle River, Bergen County. A mansion and a guest house are located on the property. It is alleged that LoPapa funded the purchase of the real estate by representing that a person named Joseph Georges, who was a fictitious person, was willing to buy the real estate from LoPapa for $4.9 million. It is further alleged that LoPapa created the false impression that Georges gave LoPapa $1 million cash and a promissory note for $3.9 million to buy the Saddle River property, and LoPapa used Georges’ worthless promissory note and the purported $1 million cash, which cash was really never paid to LoPapa, to induce a mortgage lender to agree to advance the funds needed to purchase the property. It is also alleged that LoPapa later transferred the worthless promissory note to the mortgage lender for $3.35 million to finance and to acquire the Saddle River property. The mortgage lender in turn, sold the worthless note through the banking system to FSB Mortgage, of Little Rock, Arkansas.

Immediately after the bogus Georges transaction, LoPapa transferred the property to his company, Castle Rock Real Estate, Inc.

The indictment also alleges that LoPapa committed Attempted Theft by Deception between April 17, 1996 and January 7, 1997, by falsely inflating a homeowner’s contents insurance claim and created a false 1997 corporate federal tax return and submitted it to Dun & Bradstreet, in order to induce Dun & Bradstreet to report that LoPapa’s corporation, Castle Rock Real Estate, Inc. had gross receipts and sales in excess of $15 million and ordinary income in excess of $4 million so Castle Rock Real Estate would appear to be a financially sound corporation.

The indictment also alleges that LoPapa falsified a receipt for a fictitious Certificate of Deposit which was purportedly given to Castle Rock Real Estate, Inc. in order to deceive another attorney about the financial position of Castle Rock Real Estate, Inc. Similarly, the indictment alleges that LoPapa forged two letters and two affidavits purportedly issued by an attorney in order to deceive the credit agency about LoPapa and Castle Rock Real Estate, Inc.’s financial condition.

Finally, the indictment alleges that LoPapa failed to file New Jersey Income Tax resident returns for tax years 1996, 1997 and 1998, and that LoPapa failed to pay New Jersey Gross Income Tax with the intent to evade those taxes for tax years 1996, 1997 and 1998.

The Division of Criminal Justice’s Office of Insurance Fraud Prosecutor previously filed other criminal charges in connection with this investigation. Attorney Salvatore DeLello was charged on August 10, 1999, with Criminal Bribery, Forgery, Falsifying Records and False Swearing for notarizing the signature of the fictitious Joseph Georges on a deed in connection with the Saddle River real estate fraud. On October 1, 1999, he was sentenced to three years probation and $30,000 in criminal fines.

The investigation was conducted by Det. Sgt. Brian Giannini of the New Jersey State Police. Deputy Attorney General Lee Barry of the Office of Insurance Fraud Prosecutor within the Division of Criminal Justice was in charge of the investigation and presented the case to the grand jury. The indictment was handed up to Superior Court Judge Maria Sypek in Mercer County. The case was allocated to Bergen County for trial.

It should be noted that an indictment is merely an allegation. The defendant is presumed to be innocent of the charges unless and until the State proves him guilty beyond a reasonable doubt.

1. thanks

   Posted by  on  08/04  at  01:12 AM