Scam artist Gina Palasini pleads guilty to fraud
ABERDEEN – The lion's share of charges against a woman accused of running a Ponzi scheme will be dropped as part of a plea agreement reached Tuesday.
Gina Palasini, 54, pleaded guilty to defrauding a man, Joseph Babb, through the U.S. mail by sending him a withdrawal form and supposed interest payment of about $3,300.
Palasini was indicted last year on 19 federal counts of fraud and money laundering over allegations that she earned more than a $1 million while operating the scheme. Prosecutors now believe her victims' losses were more than $2 million, Assistant U.S. Attorney Robert Coleman said.
Martha Huggart, whose father lost his life's savings to the scheme, said she was grateful that Palasini could no longer defraud any more victims.
"I'm torn because I know as a Christian I'm supposed to forgive, but what she did to my mom and dad is very hard," Huggart said.
As part of her plea agreement, Palasini pleaded guilty to the first of 19 federal charges and, in exchange, the other 18 were dropped. She also entered a plea supplement, which was filed under seal.
According to court records, Palasini encouraged Babb to purchase an annuity for $250,394, promising 10 percent interest over five years. Instead, Palasini invested the funds in nursing homes.
After Babb's death, his sons entered into a contract with Palasini in which she promised them 24 payments with interest. For four years, they received the payments, but in 2012, they stopped, leaving Palasini owing them about $108,000, court records show.
Palasini was arrested in 2014 during a Clarion-Ledger investigation into a scheme in which she claimed to help citizens obtain Veterans Affairs or Medicaid benefits. Instead, she took the money or spent it on other clients' interest payments, according to court records.
Palasini, who is Mississippi Supreme Court Judge Dawn Beam's sister, will be sentenced on Aug. 10.
Contact Mollie Bryant at mbryant2@gannett.com or (601) 961-7251. Follow @MollieEBryant on Twitter.