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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.
Follow
the Division of Consumer Affairs on Facebook,
and check our online calendar of upcoming
Consumer
Outreach events.
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