Saturday, December 20, 2008

Justice in Jefferson

The housing bubble helped with scams. So much money was flying around so fast that sometimes it was hard to know what was legit and what was not. Somethings stand out as definitely not - like an $85,000 commission on a $245,000 home equity loan. One of the perpetrators of this crime, and a slew of others, was sentenced yesterday. Now we have one less mortgage scammer running free in Northern New Jersey. The Daily Record brings us the info in an article titled Woman gets 10-year term in $2.7M mortgage scam. Lets take a look -

A 50-year-old woman who aided her boyfriend in a $2.7 million mortgage scam so they could enjoy homes, luxury cars and boats was sentenced Friday to 10 years in state prison despite her claims of being influenced and abused by the ex-beau.

Morganville resident Crystal Velitschkow pleaded guilty in June to money laundering, with the understanding that the state Attorney General's Office was recommending a 10-year term behind bars. Defense lawyer Joseph Ferrante on Friday made a pitch for a seven-year term to Superior Court Judge Salem Vincent Ahto in Morristown, but the judge said he believed the decade stint was warranted.

"Her conduct and that of Mr. Pollatos has wreaked havoc on these people," the judge said of some 20 victims, many elderly Greek people, who Velitschkow and boyfriend Spiro Pollatos, 45, swindled from 2003 to December 2007. Some of the victims live in Morris County.

Pollatos, who has a prior conviction for theft by deception related to a mortgage fraud, was the mastermind who set up a company called Lenders Capital Mortgage Co. of Hackensack, which preyed upon unsophisticated investors.

So that is what happened. But what about the back story. Lets take a look at some of the scams -

Authorities said that Pollatos embarked on a slew of scams that allowed him to funnel more than $2.7 million through a Commerce Bank account in Velitschkow's name.

To get the money, he targeted victims in the Greek community and advertised his mortgage company in a Greek newspaper.

He offered to secure hefty loans for victims who could not otherwise get them, and then charged clients excessive loan commissions and fees.

In one case, Pollatos got an $85,000 commission on a $245,000 home equity loan. Another time, 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 well beyond their value, including one case in which he urged a borrower to secure $418,500 in loans on a Keansburg property that was worth only $215,000.

There were probably many more out there that did the same thing but just with lower numbers. Instead of pocketing $85,000 they may have just taken just an extra $5000-$10,000. The way that money was flying around during the bubble allowed for dishonest people to take funds, as well as normally honest people to take a little extra off the top. The floodgates to fraud were open during the bubble. Wonder how many more like this couple are out there.

1 comment:

Anonymous said...

Spiro Pollatos and his girlfriend got what they deserved. Justice delayed, Justice served. We are all victims in the case. People should not have invested and refinanced his first home through these people. These people are thieves and they are getting long prison terms. We would like to thank the FBI, the New Jersey Attorney General and the United States Attorney's Office as well as the State Police for uncovering this fraud scheme. Lots of the victims in the scheme, most of them elderly and uneducated Greeks, invested and trusted their money with this bogus mortgage subprime sector lending company but can't express their feelings in writing or words because they simply luck some education. As an educated Greek-American that I am, I can speak on the behalf of these victims. If you defraud someone this way, you go to jail. In this case Justice was delayed, Justice served. Lets put an end into this kind of fraud and corruption.
We are after such kind of scams to serve the rights of borrowers. Thank You !!