January 10, 2014 at 11:19 PM
TRENTON, NJ – Acting Attorney General John J. Hoffman has announced that Louis Macaluso, 47, of Westfield, who formerly owned and operated Affinity Title Agency, Inc., was sentenced to 10 years in prison Friday for stealing $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 was sentenced by Superior Court Judge Edward A. Jerejian in Bergen County, was also ordered to pay a $10,000 fine. He pleaded guilty on Oct. 31 to an accusation charging him with theft and misconduct by a corporate official, both in the second degree. Macaluso was sentenced to 10 years on each of the charges, with the sentences to run concurrently. The Attorney General’s Office, acting on behalf of the New Jersey Department of Banking and Insurance, had previously arranged for Macaluso to surrender his New Jersey insurance producer license.
In pleading guilty, Macaluso admitted that, between July 2010 and Sept. 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 and all of the homeowners involved had their mortgages paid off in full by the title companies that had insured the titles on the properties, according to the office of the attorney general.
“Macaluso treated his license as a title insurer like it was a license to steal,” said Acting Attorney General Hoffman in a press release. “This lengthy prison sentence should deter other dishonest operators in the industry who might be tempted to steal the large sums entrusted to them as fiduciaries.”
“Individuals involved in home sales and the companies that finance and insure these transactions need to be able to trust that the licensed agents handling the transactions will act with honesty and integrity,” said Director Elie Honig of the Division of Criminal Justice. “When agents like Macaluso breach that trust and steal, we will prosecute them to the full extent of the law.”
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 executed consent judgments to pay full restitution. He has made an initial payment of $700,000.
Deputy Attorney General Frank J. Brady Jr. prosecuted Macaluso and handled the sentencing for the Division of Criminal Justice Financial & Computer Crimes Bureau. Detective Kimberly Allen conducted the investigation for the Division of Criminal Justice. According to the attorney general’s office, the investigation began with referrals from the New Jersey Department of Banking and Insurance and the Division of Law.