TRENTON
- Attorney General Peter C. Harvey announced
that a Union County man has pleaded guilty
to numerous counts of theft and related
charges stemming from several insurance
and mortgage fraud schemes, including
a scam designed to rip-off a mortgage
company involved in the purchase of a
multi-million dollar residential property
located in Bergen County.
According to Vaughn L. McKoy, Director,
Division of Criminal Justice and Insurance
Fraud Prosecutor Greta Gooden-Brown, Paul
LoPapa, 58, Summit Road, Mountainside,
Union County, pleaded guilty before Bergen
County Superior Court Judge William C.
Meehan to charges contained in a State
Grand Jury indictment. The indictment
charged LoPapa with theft by deception
(3rd degree), falsifying records, and
forgery (4th degree). At the hearing,
LoPapa also pleaded guilty to a separate
criminal Accusation charging him with
four counts of theft by deception and
one count of attempted theft by deception
(3rd degree). When sentenced on June 17,
LoPapa faces up to 33 years in state prison
and a fine of up to $110,000.
In pleading guilty to the charges in the
State Grand Jury indictment, LoPapa admitted
that between Nov. 1, 1995 and Feb. 1,
1996, he purchased residential real estate
(mansion and guest home) located at 73
and 77 East Saddle River Road in Saddle
River, Bergen County. An investigation
by the Division
of Criminal Justice - Office
of Insurance Fraud Prosecutor determined
that LoPapa funded the purchase of the
Bergen County property through Castle
Rock Real Estate - a real estate partnership
controlled by LoPapa. The purchase was
accomplished by creating a fictitious
person - Joseph Georges - and representing
that Georges was willing to buy the real
estate from LoPapa for $4.9 million. The
investigation determined that LoPapa created
worthless promissory notes and other financial
documents to lure a mortgage lender to
back the purchase. Using the worthless
promissory note and $1 million in purported
cash, LoPapa induced a mortgage lender
to advance $3.35 million to finance and
acquire the Saddle River property. The
mortgage lender in turn, sold the worthless
note to an Arkansas mortgage broker. The
investigation further revealed that, immediately
after the bogus Georges transaction, LoPapa
transferred the property to his company,
Castle Rock Real Estate, Inc.
LoPapa
further admitted that between April, 1996
and January, 1997, he falsely inflated
a homeowner’s insurance claim in
the amount of $33,400 for artwork that
was purportedly damaged by a leaky roof
at the East Saddle River Road property.
LoPapa submitted the inflated claim to
the Great Northern Insurance Company.
An investigation by the Division of Criminal
Justice - Office of Insurance Fraud Prosecutor
determined that the artwork never existed.
When pleading guilty to the criminal Accusation,
LoPapa admitted that between April and
August, 2000, that he stole more than
$29,200 in loan application fees from
two victims. LoPapa represented that he
was a real estate investor and mortgage
broker employed by the Citadel Group of
Companies. LoPapa induced persons looking
for real estate loans to pay mortgage
application fees, which he (LoPapa) then
stole.
State Investigator Joseph Luccarelli and
Deputy Attorney General Nicole D. Rizzolo
of the Division of Criminal Justice -
Office of Insurance Fraud Prosecutor were
assigned to the investigation. Det. Sgt.
Brian Giannini of the New Jersey State
Police assisted in the investigation.
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