News Release

New Jersey Department of Banking and Insurance

Holly C. Bakke Commissioner

FOR IMMEDIATE RELEASE: April 15, 2002
FOR FURTHER INFORMATION: MARY CAFFREY or PETER HARTT (609) 292-5064

DEPARTMENT SHUTTERS REAL ESTATE BROKERAGE, REVOKES LICENSES

IN CASE OF DIVERTED ESCROW FUNDS

TRENTON - A real estate broker who improperly diverted some $200,000 in rent receipts and client escrow deposits is out of business as a result of a Department investigation, Banking and Insurance Commissioner Holly C. Bakke announced today.

Broker Timothy J. Richards and his company, T.J. Richards, Inc., have lost their licenses and are repaying their clients under a consent agreement with the New Jersey Real Estate Commission, a part of the Department of Banking and Insurance.

Richards admits in the agreement to misusing approximately $200,000 that he had accepted on behalf of clients by failing to maintain it in escrow as required by state law. Escrow accounts are designed to keep monies separate and secure until needed for specific purposes such as rent payments or the purchase of a home. But Richards diverted some of these funds to his own business use, creating shortfalls in the escrow accounts that, as recently as March 21, 2002, still exceeded $100,000.

"Mr. Richards violated the trust placed in him by renters, landlords, buyers and sellers," Commissioner Bakke said. "His practices go far beyond the technical violation of a state regulation. They strike at the core of his legal and ethical obligations to his clients. New Jersey consumers are entitled to responsible real estate services, and todayís announcement serves as a signal of the Departmentís ongoing commitment to enforcing high standards."

Richards, of Ocean City, N.J., committed the violations in numerous transactions involving some 100 property owners in the Ocean City area. The brokerageís license has been revoked indefinitely and Richards, who had been licensed since 1985, is now under a personal lifetime ban from holding a brokerís license in New Jersey. All existing property management agreements and pending real estate transactions involving the brokerage have been transferred to third parties. Richards has been fined $5,000 and remains subject to additional fines and enforcement actions should he fail to meet his repayment obligations under the terms of the consent agreement.

The Richards case brings to more than 55 the total number of enforcement actions taken by the Department since Jan. 1, under the direction of Commissioner Bakke and former Acting Commissioner Don Bryan.

A copy of the consent agreement will be posted on the Departmentís web site.