TRENTON, NJ - What began as a joint investigation between the FBI and the IRS known as “Operation Follow The Money,” resulted in the subsequent arrest of several individuals, in July 2009, including Sussex County resident, Crystal Paling.
On November 9, 2012, in a Trenton Federal Court, U.S. District Judge Peter G. Sheridan sentenced Paling, 52, of Sussex, to 37 months in prison, and imposed a three-year supervised probationary period. Paling was also ordered to pay $532,497 in restitution.
Paling is currently free on bond, and, according to Matthew Reilly of the United States Attorney District of New Jersey’s Office of Public Affairs, she has a scheduled reporting date for Federal Prison on January 15, 2013.
In March of 2012, Paling was found guilty of conspiracy to commit wire fraud, and money laundering, for her participation in a mortgage fraud scheme, that occurred in both New Jersey and Florida.
The FBI defines mortgage fraud as “any material misstatement, misrepresentation or omission relied upon by an underwriter or lender to fund, purchase or insure a loan.”
Per the original complaint, Paling and co-conspirators Daniel Verdia, 54, of Mahwah, N.J., Jaye Miller, of Pocono Lake, Pa., and Sandra Mainardi, 52, of Wayne, N.J., participated in a foreclosure bailout scheme working out of an office in Hasbrouck Heights, N.J. Between the periods of February and September of 2005 unsuspecting homeowners who were experiencing financial hardships, sought to either sell or refinance their homes.
Homeowners were told that they would have the opportunity to repurchase their homes once they were in a more financially stable position. The homes eventually went into default, and the victim homeowners received little monetary return, or no compensation at all for their homes. Paling and her co-conspirators all profited from these transactions estimated at $1 million dollars.
Paling facilitated these fraudulent transactions by recruiting buyers and sellers. She also falsified documents, and assisted in the transfer of monies.
As a result of her participation in these illegal activities and for breaking Federal Law, Paling will report to prison, at a location still to be determined. The Federal Bureau of Prisons Website shows the only two Federal Correctional Institutes (FCI) in New Jersey in Fort Dix, and Fairton, and neither correctional institute houses female inmates.
Paling’s defense counsel, headed by Alan L. Zegas, of the Law Offices of Alan L. Zegas of Chatham, N.J., did not return calls from The Alternative Press for comments about this case.
After the arrests of the defendants in 2009, Wesyan Dun, FBI Special Agent in Charge, said of the individuals involved, "Those who are engaged in foreclosure bailout schemes are opportunistic thieves.The defendants in this matter are charged with preying on the financially weak and desperate, our lending industry, and ultimately the taxpayers.To swindle people out of the roofs over their heads is just deplorable. But we will continue working with our partners in uncovering these schemes, bringing the fraudsters to justice, and educating the public."
In response to the outcome of the case, and the sentencing, FBI Special Agent Barbara Woodruff, a spokesperson for the FBI, provided a stern warning to would-be mortgage lawbreakers, “This sentence signifies the continued effort of the U.S. Attorney’s Office, and the FBI, to investigate and prosecute mortgage fraud. We want to send a message that when individuals knowingly defraud the public during the course of a mortgage transaction, the FBI and Law Enforcement partners are committed to holding them accountable in accordance with the law.”
In addition to Paling, Verdia pled guilty to one count of conspiring to commit wire fraud, and money laundering. He was sentenced to 30 months in prison. Miller pled guilty to one count of conspiring to commit wire fraud, and money laundering, and has been sentenced to six months in prison. Apolito pled guilty to tax evasion, and was sentenced to five years probation. Robert Gorman, 64 of Long Valley, N.J., another defendant in the case, pled guilty to subscribing to false tax returns, and has been sentenced to two years probation. Mainardi received a 46-month prison sentence for her plea in Florida Federal Court to one count of wire fraud.
Paling transferred funds from Verdia’s and Miller’s shell company, Capital Investment Strategies, using loan proceeds, which were intended for the sellers. She received kickbacks into her own shell company, XL Partnership, L.L.C.
The State of New Jersey Division of Revenue and Enterprise Services Business Record Service, lists XL Partnership, L.L.C., with an original business filing date of January 1997. A representative from the state confirmed for The Alternative Press, the entity number #0600034421, was in fact Paling’s business, listed at P.O. Box 91, in Hamburg, N.J. Paling, the State said, was the registered agent for her own business, and, the business was revoked by the State of New Jersey in May 2005, for non-payment of its annual report.
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