Judge's Aide Cops Plea To Federal Tax Charge; Admits Role In Eliasof North Jersey Flipping Operation

In Newark, New Jersey, The Star-Ledger reports:

• A legal assistant to Garfield's long-time municipal court judge pleaded guilty yesterday to federal tax fraud charges in connection with a widespread mortgage scam tied to the judge. Melanie Gebbia, 33, of Wanaque waived indictment and admitted preparing fake mortgage settlement documents in exchange for more than $50,000 in cash and checks that she never reported on her income tax returns.

• The subprime mortgage deals involved the sale of more than a dozen ramshackle residential properties in Paterson that were quickly sold at inflated prices to buyers with no money. Most of the houses ended up in foreclosure, leaving banks holding worthless loans. Gebbia worked for William Colacino Jr., an attorney who has served as Garfield's municipal court judge for more than 20 years. He has not been charged in the case and was only identified in court papers by his initials as an unindicted co-conspirator. However, a separate civil fraud lawsuit spelled out Colacino's role as the closing attorney in the sale of at least five of the Paterson properties.

The guilty plea was a result of an ongoing criminal investigation that has so far led to the indictment of several housing enforcement officials and caseworkers in Paterson on charges of bribery and conspiracy, and has also resulted in last week's guilty plea by local real estate agent Michael Eliasof, 63, of Mahwah to money laundering in orchestrating a series of fraudulent mortgages that netted him and others between $1 million to $2.5 million. For more, see Garfield judge's aide admits subprime mortgage fraud (no longer available online).

See also, Involved in Paterson real estate scheme (Herald News - 11-21-07) (no longer available online).

• "Well-known New York City criminal defense attorney Ronald L. Kuby said Gebbia had entered into a standard agreement to cooperate with the government in which the more the defendant produces for prosecutors, the greater the likelihood her sentence will be reduced. "Her job now is to produce evidence against others. The most likely 'other' here is the judge (Colacino)," Kuby said. "I'm not suggesting the judge has done anything wrong. I am suggesting that it sounds like the government thinks the judge did something wrong. You don't deal with the legal assistant so she can implicate the janitor. "If I were the judge (Colacino), I would start scraping together bail money." "

Editorial: Look what greed wrought (Herald News Editorial, 11-20-07) (no longer available online).

Go here for other posts on this ongoing investigation.