NJ AG: Fugitive Pair Abused Trust In $600K+ Sale Proceeds Ripoff From Financially Unsophisticated Homeowners Facing Foreclosure

In Trenton, New Jersey, The Trentonian reports:

• A pair of suspected frauds from Ewing charged with stealing $600,000 in a mortgage foreclosure scam that targeted poor people are fugitives of justice, New Jersey authorities said [last week] in calling on the public to turn in the pair. Wayne Betha, 39, and friend Joann Smith, 42, were indicted by a state grand jury on theft, money laundering, conspiracy and tax charges [last week] for allegedly ripping off 11 families forced to sell their homes [...].(1)

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• “These defendants are charged with preying on people who had to sell their homes due to financial hardship, taking advantage of their trust and lack of financial sophistication,” said state Attorney General Anne] Milgram. “They stole from people who had little of nothing to spare.” Smith and Betha allegedly took the profit from home sales and put them in their own personal accounts for their use, deceiving the sellers into believing that they were not entitled to all of the profits from their home sale. Most of the sellers, who were not identified, were having serious financial problems and could not continue paying their mortgage.(2)

For more, see Milgram: Frauds stole $600K from the poor and are on run.

From the Office of the New Jersey Attorney General:

• Indictment: State of New Jersey v. Smith, et al.,
• Press release: Ewing Couple and Their Real Estate Firm Indicted on Charges They Stole Over $600,000 from Home Sellers (Also charged with defrauding mortgage companies of more than $600,000).

(1) The state attorney general alleges that the two, acting as real estate agents, stole more than $600,000 from clients who signed on to have Smith sell their homes. They’re also charged with defrauding three mortgage companies of $641,800 by falsifying the earnings of applicants for three home loans, the story states. Also indicted was their real estate company, S&B Properties Management and Maintenance, which allegedly was run from Smith's home.

(2) According to the NJ AG, the couple allegedly used a variety of schemes to fraudulently divert proceeds from the home sales into bank accounts maintained by Smith and S&B, which they allegedly used to launder the stolen funds. They represented to sellers and title companies that monies were owed to them for expenses, including property renovations and repairs that were never done and exorbitant consultant fees that they claimed the sellers had authorized. Many of the checks issued by the title companies handling the property sales were written to the home sellers, but Smith convinced the sellers to sign the checks over to her for payment of business expenses and fees. It is alleged that, in several instances, the defendants falsely indicated on HUD forms and tax forms that the sellers directly received all of the profits from the home sales.

They also omitted to tell sellers that they were agreeing in mortgage closing documents to pay large, unauthorized “seller’s concessions or seller’s assists” to the buyers. The victims were not financially sophisticated. They did not understand the details of the property closings and, because of their financial woes, were anxious to be free of the obligation of paying mortgages they could no longer afford. Smith and Betha allegedly took advantage of these facts to steal the victims’ profits from the home sales.