TRENTON — Division of Criminal Justice Director Vaughn L. McKoy and Reni Erdos, Director, Division of Consumer Affairs, announced that an unregistered Monmouth County securities agent has pleaded guilty to charges of defrauding investors out of more than $275,000 in monies earmarked for the purported investment in the manufacture and sale of "disaster-proof" homes.

According to Criminal Justice Director McKoy, Louis P. Arena, 55, Greenwood Drive, Freehold, Monmouth County, pleaded guilty before Monmouth County Superior Court Judge Patricia Del Bueno Cleary to a charge of theft by failure to make required disposition of funds received. The guilty plea was accepted by Judge Cleary on Dec. 19. As a result of the guilty plea to the second degree criminal charge, Arena faces up to ten years in state prison, a fine of up to $150,000 and restitution totaling more than $275,000.

Investment scams, predatory lending and other financial frauds have the attention of the Division of Criminal Justice and will be prosecuted whenever and wherever uncovered," Director McKoy said. "The Division is stepping-up the investigation and prosecution of financial crimes, including investment fraud, mortgage and real estate appraisal fraud, and other financial crimes. So-called business persons who endeavor to manipulate financial transactions and business dealings will be called to task and will pay a price."

"Arena inflicted financial disasters on the investors he defrauded in this scam," Director Erdos said. "His actions were so egregious that the Division of Criminal Justice filed criminal charges in addition to civil claims. The Bureau of Securities is continuing its mission to look out for investors and their hard-earned dollars. "

McKoy noted that the Accusation charges that Arena, through Global Place Makers, Inc. (GPI) and Global Emergency Housing (GEH), formerly located at 20 Gibson Place, Freehold and 10 Mechanic Place, Red Bank, Monmouth County, solicited more than $275,400 in investments from at least eight individuals.

The Accusation charged that from June, 1998 through February, 2001, Arena, as the sole proprietor of GEH, solicited and acquired funds from investors for the manufacture, construction, marketing and sale of "disaster-proof" homes in the United States and overseas. It is alleged that Arena sold the securities and loans to investors/creditors in the form of promissory notes and/or equity interest in GEH. The notes, sold as private placements to individuals, were captioned as "special subscriptions" and were due and payable two years from date of issuance. Additionally, the notes bore semi-annual interest at above market rates.

Director McKoy noted that the Division of Criminal Justice has established a toll-free "hotline" for the public to report corruption, financial fraud and other illegal activities. The statewide "Corruption TipLine" is... 1-866-TIPS-4CJ. Additionally, the public can log-on to the Division of Criminal Justice Web Page at www.njdcj.org to report suspected wrongdoing. All information will remain confidential.

The investigation by the Bureau of Securities and the Division of Criminal Justice revealed that the securities and other financial instruments sold by Arena on behalf of GEH were never registered with the Bureau of Securities. Additionally, principal, interest and dividends due investors/creditors remains outstanding and unpaid.

The investigation was coordinated by Deputy Attorney General Perry Primavera of the Division of Criminal Justice - Special Prosecutions Bureau, Deputy Attorney General Priya Doraswamy of the Division of Law and Supervising Investigator Michael McElgunn of the Bureau of Securities in the Division of Consumer Affairs.

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