New Jersey Division of Consumer Affairs Recovers 100% of Losses For All 24 Victims of South Jersey Foreclosure Scam
NEWARK - Attorney General Jeffrey S. Chiesa and the New Jersey Division of Consumer Affairs today announced the State has received $675,000 from Samuel E. Goodwin III, who was found to have defrauded consumers out of the "surplus funds" to which they were entitled after the foreclosure and sheriff's sales of their homes.
The check from Goodwin includes a $330,000 payment to 24 consumers he defrauded, and will restore 100 percent of the surplus funds he took from them. The remainder will go to the State, to pay civil penalties and the State's investigative costs and attorneys' fees.
"We are now putting hundreds of thousands of dollars back into the hands of consumers who were aggressively solicited and swindled by Goodwin during a particularly vulnerable time in their lives - while dealing with the aftermath of losing their homes," Attorney General Chiesa said.
In a complaint filed by the Division and the Attorney General's Office in 2007, the State accused Goodwin of misleading homeowners and defrauding them out of the funds to which they were entitled after foreclosure of their homes. The homes were sold at sheriff's sales, for prices that more than covered what the original owners owed on the mortgage and taxes. The resulting "surplus funds" in each case amounted to thousands or tens of thousands of dollars – and the original owners were legally entitled to that money.
"Scams like this are particularly troublesome to the Division because they exploit those who are already suffering from financial hardship," Eric T. Kanefsky, Acting Director of the State Division of Consumer Affairs, said. "Con artists swoop in after an unfortunate person has lost his or her home, and use their knowledge of the foreclosure process to scoop up tens of thousands of dollars that should go to the homeowner."
The State accused Goodwin of aggressively approaching the consumers after the sheriff's sales, and misleading them by saying the process of recovering surplus funds is a complicated one they could not navigate by themselves. He represented to them that surplus funds applications required his "expertise" and assistance. He then set up agreements by which he would apply for surplus funds, in exchange for a large portion of those funds.
The State further alleged that after making oral agreements about how the surplus funds would be divided between Goodwin and the homeowners, Goodwin at times prepared written documentation that increased the share he was to receive. As a result he charged homeowners 15 percent to 65 percent of the total surplus funds to which they were entitled – and took as much as $54,000 from one consumer. The full amount will now be restored to that consumer, as a result of the settlement.
The Superior Court on June 30, 2011 granted the State's motion for summary judgment, found that Goodwin committed multiple violations of the Consumer Fraud Act through his unconscionable commercial practices, and ordered him to pay $329,198.08 in consumer restitution, $225,000 in civil penalties, $122,320 for the State's attorney's fees, and $10,678.93 for the State's investigative costs.
Goodwin appealed on August 15, 2011, but the parties agreed to a settlement, memorialized in a final consent judgment filed with the court on March 27, 2011. The settlement payment was not received until after the State filed a motion seeking to compel Goodwin's compliance with the terms of the settlement.
Acting Director Kanefsky reminded consumers that con artists often prey on those who are vulnerable – including individuals facing crippling debt, bad credit, or struggling with the possibility of foreclosure.
"Scammers know that when you feel vulnerable or desperate, you are less likely to stop and think critically when someone appears to be offering help," Acting Director Kanefsky said. "The Division of Consumer Affairs offers practical advice that can help you identify scams, including those that prey on people who are struggling to make their mortgage payments or facing the loss of their homes."
The Division of Consumer Affairs provides the following information to help homeowners prevent themselves against fraud, while facing the difficult prospect of foreclosure or trying to modify a home loan:
Investigating Supervisor Jennifer Micco and Investigator Jared O'Cone, of the Division of Consumer Affairs' Office of Consumer Protection, led this investigation.
Deputy Attorney General Lorraine E. Rak, Chief of the Consumer Fraud Prosecution Section, handled this matter for the State.
The New Jersey Superior Court Trust Fund Unit also aided in this matter.
Consumers who believe they have been cheated or scammed by a business, or suspect any other form of consumer abuse, can file a complaint with the State Division of Consumer Affairs by visiting its website or by calling 1-800-242-5846 (toll free within New Jersey ) or 973-504-6200.
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