Tue 10 Jun 2008
“This was a classic Ponzi scheme, on a large scale”
Categories: Housing Bubble , New Jersey Real EstateFrom the Star Ledger:
Old Bridge man arrested in $80M real estate scheme
The head of a defunct real estate investment company accused of bilking investors and mortgage lenders out of $80 million was arrested today in Manalapan, authorities said.
FGI agents and Manalapan police officers pulled over Wayne Puff, the owner of NJ Affordable Homes, while he was driving. He is charged with wire fraud and obstruction of justice, charges that carry maximum penalties of 20 years in prison and a $250,000 fine, according to the U.S. Attorney’s Office in Newark.
The charges come more than two and a half years after securities regulators filed civil charges against Puff, 60, and his firm, alleging he took millions of dollars from investors with the promise of outsized returns through real estate.
Federal prosecutors today said Puff, an Old Bridge resident, caused investors to lose about $55 million and lenders to lose about $25 million.
“This was a classic Ponzi scheme, on a large scale,” U.S. Attorney Christopher Christie said in a statement. “Investors have to be wary of anyone offering such lofty, guaranteed returns.”
Since October 2006, four former NJ Affordable employees and two property appraisers who did work for the company have pleaded guilty to participating in the scheme, which included falsifying loan applications, inflating property appraisals and lying to investors.
The company went into liquidation bankruptcy in November 2005. Since then, a trustee overseeing the case has sold more than 300 properties through an auction and abandoned dozens more.
More than 500 investors gave Puff money, some of them their entire life savings.
Its so nice to learn that even a company called “NJ Affordable Homes” was out there actively pushing up real estate values through fraudulent means.
I feel like such a sucker for being an honest human being.
Oh, and Forst!
can any one tell me the price history for this house?
7 Piermont Road Rockleigh, NJ 07647.
Thanks.
MLS# 2635434
Listed: 9/8/2006
List Price: $4,650,000
DOM: 213
Expired
MLS# 2717203
Listed: 5/1/2007
List Price: $4,600,000
Reduced: $4,280,000
DOM: 264
Withdrawn
MLS# 2802956
Listed: 1/22/2008
List Price: $3,495,000
DOM: 86
Expired
MLS# 2816223
Listed: 4/21/2008
List Price: $3,495,000
DOM: 43
Expired
Tom (last thread)
“What would be interesting to know is if companies that are abandoning their pension plans are still giving the same amount to their employees, either through employee matching funds or through increases in salary.”
They’re not.
Jamil (last thread)
“Yes. Iraqis, even sunnis, are grateful for US military.”
That’s wrong in the sense of being the opposite of the truth. The overwhelmong majority of Iraqis want us out.
Overwhelming, even.
How about the auto concessions? They’re dying and taxpayers are covering so a few thousand guys can get a little paycheck in the mid-west.
Union employees part-time with no health coverage for children.
Sign of global competition, when owners of Rita’s Water Ice in PA and NJ foot the bill for all the kids in Michigan who have no health coverage.
“He is charged with wire fraud and obstruction of justice, charges that carry maximum penalties of 20 years in prison and a $250,000 fine, according to the U.S. Attorney’s Office in Newark.”
Presumably he also has to give back the $80M?
7 pat
Yep - tough for our guys to compete globally when they have to foot the medical bill that the competition doesn’t because it’s covered by their government.
Thanks grim for info on 7 piermont rd.
Vow!! it had a 25% drop in price. I am trying to find out what the house would be worth. The house is being sold in bankruptcy. It is little bit expensive.
GSMLS at 37006 this evening.
9, njp, but one of my pet peeves is individual state arbitrage on mandatory coverage.
I despise the fact that Ohio can currently be implementing - legally - coverage rules for children that will trump Fed law, bypassing even-field rules used fairly by most other states.
If the Fed law says Dad covers the kids up to half his pay, then Daddy covers. Ohio, WA, etc., should not be given a pass.
It gives me hives. If the employers in these states cannot play, then these people need to move and get jobs in other states.
Sorry/end soap box.
still_looking Says:
June 10th, 2008 at 7:42 pm
Yet again looking for advice…(sigh)
This time it’s lawyer type advice. (would be happy to trade for medical type advice in the future.)
I was given a referral to contact a lawyer in Fla regarding my incompetent mother’s estate. My sisters and I spoke with them 5 or 6 times and asked for fee information so we could decide if we wanted to retain them.
They never once told us they were going to bill us for this time (to the tune of nearly $6K. We gave no verbal or written agreement and decided we weren’t pursuing guardianship.
How do I address this?
Thanks in advance.
sl
#1 Without knowing any details, I would have to side with the lawyer in terms of providing a bill. 5 or 6 phone calls? How much time was that?
However…
#2 $6K….did they itemize that?…they need to explain what they did….if the estate in question is large, then they are just trying to scare you into retaining them….”oh well we already owe them $6K, so why start over”…..since there are so many siblings, they probably also think that they can mess with you and get their way….
they don’t pass the smell test….
however, it is possible that as a potential clients, you don’t either…..
just tyring to be objective…..I would look elsewhere and remember, you may have grounds to blow off the bill or just pay an amount that you think is fair….if they cash your check, then you can assume the account is settled in full….
thanks for responding chifi,
I will look into it.
Yet another thing to deal with… :-)
sl
Still looking
I hadn’t seen that Q (thanks, Chi). Chifi’s advice is mostly right, but let me ad that (1) this sounds very sleazy and (2) you should ask them to please send you a record of (a) when they disclosed their fee and (b) when it was agreed that they were hired. If they cannot produce both things, and if you want to play some easy hardball, you might suggest to them that they are behaving “unethically” (this is a losing-your-license-to-practice-law type term of art) and that you intend to contact the Florida Bar Association to determine whether the billing is appropriate. It may even be worth a bit of quick googling (maybe I’ll have a go in the AM).
On the other hand, only you know how substantive the 5 or 6 conversations were and whether there can have been some reasonable expectaion that you had hired them. Note that you would be able to get competent advice of this sort in NYC for ~$400/hr, so $6,000 seems steep unless each of 5 calls exceeded 3 hours apiece or you asked them to do costly Westlaw-type research. Itemization, at a minimum, is warranted.
If you were not on all of these calls, be very sure your sisters are very clear with you about exactly what was said and for how long. Phone records might be useful.
Holler in this space if you want to discuss further.
Disclaimer: I am neither a litigator nor a FL attorney. Nom, jam, any of our many other legal types please chime in.
Pat - you’re over my head again.
I was just pointing out that it’s difficult for US companies that do have health care expenses (no national health) to compete, pricewise, with non-US companies that don’t (because they do have national health). Our guys have to price in that cost; the competition doesn’t.
My brain is too small to understand what you said.
njp,
Wow. And thanks, too! All phone calls were with my sisters and me or just me. They never once indicated they were billing us for the time (or quite frankly, I would have never called them back.)
they sent me a detailed letter itemizing to the minute each phone call and email they sent (to each other member of their firm) and even charged for leaving a message on my answering machine from my initial call.
I was NEVER, not once informed that I would be billed for this.
They also sent a duplicate bill to my sister in Fla.
They reviewed my mother’s POA and RevTrust and Med Proxy forms.
I am looking at the bill right now - it’s ridiculous.
sl
Also, should I contact the person who referred me to them? I figured he should know about this too.
sl
I second what Chifi and NJP said. Be prepared for the argument though that you couldn’t reasonably expect that they were doing all that work for free. It seems that if they had disclosed their hourly rate the “representation” would have ended much sooner. In this case, I would argue that the lack of an agreement should be held against the lawyers.
It should go without saying that the law in FL may be completely different than in NJ so tread carefully.
Still,
All of the comments cover the nut, and I would look at NJPs comment of comparing rates. My guess is that their rates are way above the average.
My response would be two-pronged: Complain to the Florida bar (state regulatory, not a lawyer’s bar association), and get another lawywer to file a pre-emptive suit under the state’s consumer protection law (typically, these provide for treble damages, attorney fees and costs if you prevail). Given the amount involved and the prospect of fighting on two (or three) fronts, they may choose not to fight it and you can lowball on a appropriate fee.
Disclaimer: I am not a member of the bar in Florida or New Jersey, and the foregoing should not be considered legal advice. No client-attorney relationship is intended.
thats “lawyer” (yeah, I can type).
Google “American Business Financial Services”: a Phila. and NJ firm doing this same thing but at a few orders of magnitude larger in terms of $ bilked.
What is FGI? Federal Gangsta Investigations?