Ringleader in Ponzi Scheme Sentenced to 18 years

United States District Judge Jose Linares in Newark, New Jersey sentenced Wayne Puff, age 61, from Old Bridge, New Jersey to eighteen years in federal prison on January 14th. Mr. Puff was also order to pay restitution in the amount of one hundred one million dollars and receive three years of supervised release upon completion of his sentence.

Mr. Puff pleaded guilty to conspiracy to commit wire fraud in April of 2009. His fraudulent actions went unnoticed by federal investigators from 1998 to 2005. Mr. Puff and his co-conspirators during that time obtained more than one hundred twenty million dollars from individual investors. He and his co-conspirators fraudulently touted the profitability and the security of investments made into New Jersey Affordable Homes Corporation. The investments mad into New Jersey Affordable Homes Corporation were secured by a portion by fraudulent residential mortgage loans according to the United States Attorney’s office. Mr. Puff admitted to the fraudulent investment scheme and the mortgage fraud scheme which defrauded hundreds of investors here in the United States and internationally and defrauded mortgage lenders across the nation.

New Jersey Affordable Homes Corporation presented itself to investors as a private company that purchased, renovated and sold residential properties. Investors who were solicited were promised a return on their investment that was security and had a guaranteed annual profit around 15 to 22 percent.

Mr. Puff used those investments to divert and misappropriate the funds that included the classic Ponzi scheme of paying existing investors with new investor monies. He also used the funds to settle lawsuits brought on by other investors and satisfy judgments against New Jersey Affordable Home Corporation as well as judgments against himself. Funds were also used to go on personal trips to exotic islands, elegant restaurants, personal expenses and other lavish purchases.

The scheme began to unravel in late 2003 when Mr. Puff needed a large sum of cash to conceal and keep up the fraud. Mr. Puff and his co-conspirators created a program they called Our Money, Your Credit. Investors were again solicited and who would serve as purchases of New Jersey Affordable Home Corporations properties. They would allow the company to use their names and credit histories in order to obtain mortgage loans. The loans were purchased through multiple lenders and New Jersey Affordable Home Corporation handled all the fees and costs associated with the transactions. Buyers of the properties never paid a dime for the purchase even though HUD-1 settlement statements showed the investors names on the HUD and all the closing documents associated with the closing of the mortgage loan.

Mr. Puff also solicited appraisers into his scheme in order to defraud mortgage lenders with fraudulent appraisals that were largely inflated in order to suit the need.

The fraud committed by Mr. Puff and his co-conspirators was exposed when the Security and Exchange Commission originated a civil enforcement action against New Jersey Affordable Home Corporation and Mr. Puff.

Ten individuals have pleaded guilty in connection with the Ponzi scheme they included the following:

John Kurzel, age 58, from New Brunswick, New Jersey and processor for New Jersey Affordable Home Corporation. He received twenty months in prison.

Michael Meehan, age 49, from Belmar, New Jersey, and a former real estate appraiser. He received thirty months in prison.

Anthony Natale, age 45, from Neshanic Station, New Jersey, and a former lawyer. He received 30 months in prison.

Sydney Raposo, age 42, from Rahway, New Jersey, a paralegal. He received three years’ probation and six months of house arrest.

Kenneth Lagonia, age 58, who is awaiting sentencing.

John Morris, age 63, who is awaiting sentencing.

Katrina Arrington, age 37, who is awaiting sentencing.

Mitchell Fishman, age 57, who is awaiting sentencing and

William page, age 50, is waiting sentencing as well.


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