Newark, NJ – The Center for Social Justice (CSJ) has filed a lawsuit alleging that a group of real estate sellers, mortgage brokers, appraisers and other unnamed individuals pursued a fraudulent real estate property flipping scheme targeting minority neighborhoods in urban North Jersey. Seton Hall Law students Mark Enright, Michael Laudino and Orlando Perez from CSJ’s Civil Litigation Clinic, as well as students in CSJ’s Urban Revitalization Project: James Sasso, Charles Kellett and Michael Schewe, working under the supervision of Professors Linda Fisher and Michael Barbosa, researched the unlawful practices and assisted with drafting the complaint.

According to the complaint, Defendants Maurice Bethea, his companies Blu Financial Group, Inc., Urban Upliftment, Born Asiatic and Greenfield Assets Holdings and others purchased foreclosed properties in Newark, Irvington and Orange, New Jersey, partially renovated them, and then conspired with mortgage lenders and appraisers to dupe first time home buyers, such as Jarell Jones, into purchasing the homes at artificially inflated prices in order to obtain significant resale profits.

The defendants engaged in a variety of high-pressure, deceptive sales tactics to lure inexperienced, first-time homebuyers, such as Jones, into purchasing the properties at substantial markups, sometimes exceeding 100 percent On average, research shows the third party defendants sold one-to-three family homes for $250,000-$450,000. Barbosa says, "[t]he defendants in this case, using false promises and outright untruths, turned Ms. Jones’ and possibly many others’ dreams of home ownership into a horrible nightmare.”

According to the complaint, defendants Bethea of Blu Financial and Carlos Jambrina of Infinity Home Mortgage Co. induced Jones to sign various blank documents and prepared loan applications that misrepresented Jones' race, income and assets and falsely stated that she was making a significant down payment. According to the third party lawsuit, the defendants -- including Equity Appraisal Services and William Ottaviano -- also issued false appraisals that significantly overrepresented the value of the property. The lawsuit further alleges that the scheme artificially inflated market prices of homes in the affected neighborhoods as appraisers, sellers, real estate brokers and others seeking to value properties in those areas relied on the false sales prices reported in deeds and other public records.

Further, defendants Bethea and Blu Financial reaped substantial profits from their fraudulent scheme, which was carried out dozens of times between 2002 and early this year. Jones, the lawsuit alleges, was unaware that her "fair” deal was being accomplished only by hiding the true nature of the transactions. As a result, Jones is currently in foreclosure, saddled with mortgages she cannot afford and cannot refinance because they exceed the fair market value of her home. Allegedly, others who purchased homes from Blu Financial and its affiliated companies have also ended up in the same position. "The perpetrators of this scam promised minority home buyers an opportunity to become part of the American Dream," Fisher said. "In reality, the defendants profited handsomely while homebuyers such as Ms. Jones saw their financial security ruined. By pursuing this lawsuit, we hope to send the message that fraudulent and discriminatory real estate deals will not be tolerated."

Individuals who believe they have been victimized by Blu Financial Group, Inc., Born Asiatic, Bethea or Greenfield Asset Holdings should contact Seton Hall Law School’s Center for Social Justice at 973-642-8700.

 

The only private law school in New Jersey, Seton Hall University School of Law was founded in 1951, and is located in the city of Newark. Seton Hall Law School offers both day and evening programs leading to the Juris Doctor (J.D.), Master of Laws (LL.M.) and Master of Science in Jurisprudence (M.S.J.) degrees. For more information on Seton Hall Law School, visit law.shu.edu.