New Jersey Couple indicted with Mortgage Fraud
The New Jersey Attorney General, Anne Milgram in a press release announced the indictment of Joann Smith, 44 and Wayne Betha, 39 and the real estate company, S&B Property Management and Maintenance LLC. Smith and Betha are both from Ewing, New Jersey and have been charged with mortgage fraud involving eleven residential homes. The counts against the couple include money laundering, conspiracy, theft by deception, failure to file corporate tax returns and other crimes. The couple has warrants out for their arrests and they remain at large at this time.
Smith and Betha did on homeowners who were close to foreclosure and were under financial distress. Smith and Betha took complete advantage over these individual homeowners who trusted them to assist them in selling their homes during a time of financial hardship.
The indictment alleges that Smith and Betha between August of 2006 and February of 2008 conspired to commit theft by deception when they agreed to sell homes for distress homeowners. The indictment states that Smith and Betha stole over six hundred thousand dollars from homeowners in their scheme to defraud. They diverted proceeds from the sales into bank account controlled by them including their personal bank accounts. They told homeowners that they were not entitled to portions of the proceeds from the sale of the home. The homeowners involved believed Smith and Betha; on one occasion Smith returned to the seller and request a portion of the proceeds be returned as the funds should have gone to repairs that Smith and Betha did on the home. Smith and Betha had not done any repairs to the home.
The scheme of going back to the seller for refund of services is not the only scheme that Smith and Betha used. They also told sellers and title companies that monies were owed to them as expenses. The claimed the expenses were renovations and repairs on the properties; no renovations or repairs were ever done. They assured title companies that the extreme consultant fees were approved by the sellers in order to acquire the funds. Smith and Betha noted on HUD 1 forms and tax forms that the sellers received all the proceeds from the seller of the homes. The omitted from telling the sellers that they were agreeing to inflated closing costs and seller concessions to the buyers.
The victims of the fraud were not financially savvy enough to understand all the details involved at the property closing and due to their distress from having to sell their homes were anxious and were simply happy to be out of the financial obligation. Smith and Betha preyed on them knowing this information.
The eleven homes involved in the scheme were located in Trenton, Ewing, Hamilton, Orange, Willingboro and Camden. Smith and Betha used fraudulent earnings information to qualify the buyers in the mortgage deals. The mortgage institutions approved the loans in amounts totaling over six hundred thousand dollars.
Smith and Betha failed to file corporate business tax returns for the State of New Jersey for tax years 2005 through 2008. The couple has been charged with misconduct of a corporate official. Smith in addition did not file personal tax returns for tax years 2005 through 2008. Betha failed to file personal tax returns for tax year 2007.
Smith would write fraudulent notions on checks that were written from her account and the business accounts to make the books appear as if payment were made for bogus home repairs. She would also write checks to sellers and note that it was a gift as a way to divert funds. The couple used the diverted proceeds for personal use.
White collar crime has been the primary focus of The Division of Criminal Justice including mortgage fraud and money laundering. The past two years has resolved over eight cases that consisted of over twelve million dollars in mortgage or financial fraud. Yi Feng Reid, Yu Jane Chen and other conspirators where indicted in June of 2009 in a conspiracy involving one million one hundred thousand dollars. The case involved the use of stolen identities to acquire residential mortgage loan. Spiro Pollatos was sentenced to thirteen years in prison in February of this year in a scheme that involved over two million dollars. Michael Fumore was sentenced to fifteen years in federal prison for stealing an estimated four million dollars entrusted to him as a real estate closing attorney.
The case against Smith and Betha was investigated by The Division of Criminal Justice major Crimes Bureau and the Mercer County Prosecutor’s Office. The indictment was presented to Superior Court Judge Maria Marinari Sypek.
The charges of money laundering carry a maximum sentence of twenty years in state prison and the defendants would be ineligibility for parole for up to one third to one half of the sentence invoked. The maximum fine impose is up to five hundred thousand dollars. The other charges against the defendants carry penalties of up to ten years with fines from one hundred fifty thousand dollars.
The indictments are merely allegations of a crime and the defendants are presumed innocence until proven guilty in a court of law.
The Division of Criminal Justice has requested assistance in locating Smith and Betha. If you know of their whereabouts please conduct 1-866-TIPS-4CJ.
