A growing number of people are telling federal investigators they lost money in a scheme orchestrated by Gina Palasini, a Mississippi fugitive arrested Aug. 29 in Palm Springs, California.
Palasini had operated a series of businesses claiming to help seniors obtain Medicaid or veterans benefits. Sometimes clients transferring their life savings to her to reduce assets to qualify for benefits. Palasini pledged to give money back, but sometimes didn’t.
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Sunflower County Sheriff James Haywood tells The Clarion-Ledger (http://on.thec-l.com/1BEzgXN) she will be extradited Monday to his county, where she faces felony bad-check charges.
She’s also due in Wayne County for sentencing on a felony false pretense charge to which she pleaded guilty in 2013. She remained free under order to reimburse victims, but never did.
The U.S. Postal Inspection Service says it’s investigating Palasini for wire fraud.
“There are more victims than we can even get ahold of,” said Memphis-based U.S. Postal Inspector Kyle Parker.
Parker would not say exactly how many people allegedly lost money to Palasini but confirmed it’s “well over” the nearly one dozen interviewed by The Clarion-Ledger.
“A lot of these people are at the age right now where if they knew their whole life savings was gone, they’d be ruined,” Parker said. “It’s a very delicate situation. We don’t know how much longer these people have.”
Transferring funds served two purposes: With little or no assets, clients qualified for government benefits they otherwise would not have received. And they thought Palasini put their money into interest-earning accounts from which they could withdraw cash at any time. Upon a client’s death, designated beneficiaries would get the assets.
Parker called it a Ponzi scheme in which Palasini allegedly used one client’s money to pay for withdrawals made by other clients. But she appears to have spent most of the cash on herself and on high-priced gifts, including vehicles and vacations, which she gave to family and friends. When she couldn’t afford to pay a client, she made up excuses or simply wrote bad checks that bounced.
Clients who threatened to sue sometimes got a bit of their money back in installments, Parker said, but those payments usually stopped after a few months.
A few victims eventually did sue and even won judgments, including one for $155,000 in DeSoto County Circuit Court last year, but Palasini has not faced trial on any of them.
Other victims say their financial losses pale in comparison to the trouble Palasini caused them with Medicaid or the Department of Veterans Affairs. Investigators say she jeopardized several of her clients’ ability to obtain government benefits by withholding paperwork or using enrollment tactics that amount to fraud.
This prompted the VA Office of the Inspector General to join the U.S. Postal Inspection Service on the case, Parker said.
