Property-rich NYC couple accused of welfare fraud

The parents of a 21-year-old student believed to be killed in a mob hit were indicted Wednesday on charges they stole welfare benefits while making nearly $500,000 in mortgage payments on at least 13 properties.

Carmine and Rosa Gargano concealed ownership of residential and commercial properties by transferring them to shell companies, the Brooklyn district attorney's office said.

They applied for and were granted Medicaid benefits, falsely claiming their monthly income was next-to-nothing, according to the attorney's office. They claimed to be earning $150 a week at one point, and claimed on another application that they made only $19,593 a year, prosecutors said. From August 2004 through February 2009, they collected $33,509 in Medicaid benefits.

At the same time, though, they were making more than $500,000 in mortgage payments per year through a corporation to six separate mortgagees with Chase or HSBC, prosecutors said. It wasn't clear where the money came from.

The couple pleaded not guilty at an arraignment Wednesday to charges of welfare fraud, grand larceny and offering a false instrument for filing. They were released on their own recognizance and were given a June 12 court date.

The couple's attorney, Joseph Mure, said his clients surrendered voluntarily, and that both of them had fallen ill at some point, had no insurance, and applied for Medicaid.

The Garganos' son, Carmine Gargano Jr., was a Pace University student who disappeared in 1994. He was not a mobster, but was believed to be killed because his cousin, who was in a rival family, got into a dispute with the Colombo crime family.

John Pappa, a Colombo associate, was at first suspected in the student's murder. Pappa is now in prison after being convicted in four other murders involving the Colombo family, but he denies involvement in Gargano's disappearance or killing.

In March, FBI investigators resumed digging in a Long Island field used by mobsters as a burial ground where investigators suspect Gargano and Colombo associate Richard Greaves may be buried. Greaves was believed killed in 1995 because bosses feared he might become an informant. So far, their remains have not been found.

Mure said the Garganos were not tied to the mob.

http://www.newsday.com/news/local/wire/newyork/ny-bc-ny--welfarefraud0520may20,0,4838438.story