Contracts and Criminal Liability (Part 8)

by | Oct 29, 2018 | Blog, Criminal Law, Monmouth County, New Jersey, Ocean County

Judge Vernoia concluded with the following: We are therefore convinced the court erred by dismissing count two. The evidence showed defendants obtained the NJDEP’s property by deception in violation of N.J.S.A. 2C:20-4(a) because it transferred something of value, contract rights over which the NJDEP had an interest, in response to defendants’ false statements about their financial condition and alleged contract with a solar power developer. We also reverse the dismissal of count three to the extent it alleges financial facilitation based on the criminal activity alleged in count two.

We affirm the court’s dismissal of count four which charged defendants with theft by deception by obtaining a $950,000 mortgage from Sussex in connection with SEP’s purchase of the property. The State claims defendants obtained the mortgage based on their misrepresentations concerning their ability to generate revenue from the generation of solar power on the property.

The indictment, and the State’s argument, misconstrue the nature of the mortgage and its obligations. Defendants did not “obtain” a mortgage from Sussex, and the mortgage was not executed on Sussex’s behalf. Instead, SEP, as the mortgagor, granted the mortgage to Sussex, and Sussex obtained a lien on the property as a result. A mortgage is simply a form of ‘security for the payment of a debt.’ The mortgage, which count four alleges defendants obtained by deception, did not transfer any property to defendants in which Sussex had an interest. Therefore, there was insufficient evidence supporting the theft by deception offense charged in count four.

Reversed as to the dismissal of counts one, two and three. Affirmed as to the dismissal of count four. Remanded for further proceedings in accordance with this opinion. We do not retain jurisdiction.

The court references the crime of “financial facilitation.” That is how the offense commonly known as “money laundering” is codified in New Jersey. The financial facilitation statute is so broad in New Jersey that the mere possession of ill-gotten money qualifies and subjects the offender to mandatory prison and hefty civil penalties. It is an offense that is being increasingly used by prosecutors’ offices statewide. The likely result for its increased use is the pro-prosecution tilt that has occurred with the new judges and justices that are now sitting in the appellate division and state supreme court.