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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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Spiro Pollatos, 46, Marlboro, New Jersey, pleaded guilty to a charge of 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. The guilty plea was entered 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.
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.
State investigators arrested Pollatos and Velitschkow on December 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, New Jersey, which he licensed under the name of Velitschkow’s brother-in-law, Thomas J. Prussack, 40, Keansburg, New Jersey. 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 addition to Prussack, the other defendants who were charged with Pollatos in the mortgage fraud schemes were George Papas, 64, Ridgewood, New Jersey; Marco Sigona, 33, Hackensack, New Jersey; and Mario LaGrasta Jr., 35, Little Ferry. Though unlicensed, they assisted him in soliciting and processing loans.
In June 2008, 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.
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. The 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.
“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 Anne 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.”
Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader
U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc.
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Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com
Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area.
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Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week.
Countrywide Tries to Pin Blame on Insurer Court House News
Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse.
Investors Say They Were Swindled in Property Scheme Fox 13 Now
Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches.
Greenfield Man Accused of Housing Scam The Republic
A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said.
Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire
Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes.
Ownership Rights to Get Another Look TBO.Com
State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County.
Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony
As reported by Anne Mitchell, who viewed the trial:
Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the...
Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony
Steve Middleton Testimony - Coverage Provided by Anne Mitchell
The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's...
Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination
According to Anne Mitchell, who is present in court for the trial:
Next Witness: Kelly Sanford
Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in...
Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued
According to Anne Mitchell, who is viewing the trial:
January 13, 2010
Witness: Rick Hayes
Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John...
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The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
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