Louis Macaluso, 47, Westfield, New Jersey, a title company owner, has pleaded guilty to criminal charges for stealing a total of $5.3 million entrusted to him as a settlement agent to pay off multiple mortgage loans in connection with real estate closings he handled.
Macaluso, who owned and operated Affinity Title Agency, Inc., pleaded guilty to an accusation charging him with theft and misconduct by a corporate official, both in the second degree, before Superior Court Judge Edward A. Jerejian in Bergen County. Under the plea agreement, the state will recommend that Macaluso be sentenced to 10 years in state prison on each charge, with the sentences to run concurrently, and that he pay a $10,000 fine. Sentencing is scheduled for Jan. 3.
In pleading guilty, Macaluso admitted that, between July 2010 and September 2012, he failed to use funds entrusted to him as a settlement agent to pay off 34 outstanding mortgage loans on properties in New Jersey, Pennsylvania, Maryland and Ohio. The unpaid balances totaled approximately $5.3 million. Macaluso diverted the funds for his own use or the use of Affinity. All of the homeowners involved had their mortgages paid off in full by the title companies that had insured the titles on the properties.
The three companies that sustained losses – New Jersey Title Insurance Co., Commonwealth Land Title Insurance Co. and Title Resource Guaranty Co. – filed civil actions in federal court against Macaluso, who has executed consent judgments to pay full restitution. He has made an initial payment of $700,000. The Attorney General’s Office, acting on behalf of the New Jersey Department of Banking and Insurance, arranged for Macaluso to surrender his New Jersey insurance producer license. He previously surrendered his insurance producer licenses in Colorado and Ohio. Affinity Title Agency, which was a New Jersey corporation, is no longer in business.
Acting Attorney General John J. Hoffman announced the guilty plea.
Deputy Attorney General Frank J. Brady Jr. prosecuted Macaluso and took the guilty plea for the Division of Criminal Justice Financial & Computer Crimes Bureau. Detective Kimberly Allen conducted the investigation for the Division of Criminal Justice. The investigation began with referrals from the New Jersey Department of Banking and Insurance and the Division of Law.
“Real estate sales frequently attract con artists because of the huge sums of money involved,” said Acting Attorney General Hoffman. “It is particularly alarming, however, when individuals who run licensed businesses engage in theft, because their crimes undermine confidence in the industry. We will continue to work closely with the Department of Banking and Insurance to uncover such crimes and aggressively prosecute those who abuse their licenses.”
“Although title insurers and lenders frequently bear the cost of fraud in the real estate market, they ultimately pass it on to home buyers in the form of higher premiums and loan rates,” said Director Elie Honig of the Division of Criminal Justice. “We’re working hard to prosecute white collar crime, because insecurity in the business environment harms all businesses and consumers.”