Middlesex County News

State orders New Brunswick financial consultant to pay $750,000 for alleged Ponzi Scheme

3eec50d971b3f3805b70_0.jpeg
Jeffrey Isaacs is being ordered to pay $750,000 as part of an alleged Ponzi scheme Credits: LinkedIn
68083c569225aa55fdc6_Isaacs_logo-2.jpg
404dc49664595f090304_ls_ld_2016group-2.jpg
Isaacs, holding plaque, was honored April 9, 2016 as one of eight Loyal Sons and Loyal Daughters of Rutgers for 2016.  Credits: Livingston Alumni Association
3eec50d971b3f3805b70_0.jpeg
NEW BRUNSWICK – Attorney General Gurbir S. Grewal and the New Jersey Bureau of Securities announced today that a New Brunswick man and his companies have been ordered to pay $750,000 for selling New Jersey investors more than $7 million worth of unregistered securities tied to an alleged $1.2 billion nationwide Ponzi scheme. 

Jeffrey Mitchell Isaacs, proprietor of JB Financial Resources in Edison, sold the unregistered securities for the Woodbridge Group of Companies (Woodbridge), which has been charged by the U.S. Securities and Exchange Commission (SEC) with operating a Ponzi scheme that defrauded 8,400 investors across the country.

When reached at his office in Edison, Isaacs said "this if the first I have heard" of the state order and asked that the press release and summary penalty order be sent to him for review. He declined to comment further in asking to read the information that the Attorney General sent to media.

Sign Up for E-News

Isaacs is a Piscataway native who graduated from Rutgers' Livingston College in 1984 and served on the university's Board of Trustees from 2003 to 2009, according to his LinkedIn profile. He has been with JB Financial Resources since 1989, serving as a financial consultant.

According to state authorities, the scheme collapsed after Woodbridge stopped paying investors and filed for Chapter 11 bankruptcy protection on December 4, 2017, two weeks before the SEC filed its charges against the California-based real estate investment group.  

Between 2013 and 2017, Isaacs and his related entities sold approximately 88 of Woodbridge’s unregistered securities valued at approximately $7.1 million to at least 26 New Jersey investors, state officials said, adding Isaacs was paid approximately $195,000 from Woodbridge for the sales.

“Ponzi schemes only work when unscrupulous individuals lure unsuspecting victims into a scam for their own profit,” Grewal said.  “To protect New Jersey from these types of Ponzi schemes, we will continue to take action against those who seek to harm our residents and our financial markets.”

The Bureau found that Isaacs, whose agent and investment adviser representative registrations were suspended in 2013 for dishonest or unethical practices, acted as an unregistered agent in the offer and sale of the unregistered Woodbridge investment products in the form of First Position Commercial Mortgages (FPCMs.)

Isaacs, whose office is based at 2171 Woodbridge Ave. in Edison, and his related entities marketed the FPCMs as short-term, safe investments secured by real estate that paid an annual interest rate of 5 percent or more. In reality, the FPCM securities were unregistered, unsecured, and part of an alleged $1.2 billion Ponzi scheme, the Bureau Chief found.

“Despite having no legal authority to sell investments in New Jersey, Isaacs sold the unregistered Woodbridge securities to New Jersey investors,” said Kevin Jespersen, Acting Director of the Division of Consumer Affairs. “Isaacs shamelessly profited from this alleged Ponzi scheme while the investors that purchased the unregistered securities are now left to deal with the devastating impact of trying to recover their investments.”

The California-based Woodbridge, which identifies itself as a developer of high-end real estate, purportedly made hard-money loans to developers that were secured by commercial mortgages and property. To help fund the purported hard-money loans, Woodbridge raised money from investors by offering FPCMs issued by Woodbridge-related entities known collectively as the Woodbridge Funds. The FPCMs were sold through a nationwide network of sales agents. 

According to the SEC’s lawsuit, many of the Woodbridge sales agents across the country were not associated with registered broker-dealers or investment advisory firms, and several of them had been censured or barred by federal or state securities regulators. 

“Unregistered agents are often at the heart of investment scams, which is why the Bureau strongly encourages investors to verify and review the registration records of anyone offering to sell them an investment,” said Christopher Gerold, Chief of the Bureau of Securities. “Had these investors checked with the Bureau, they would have learned that Isaacs is not registered to sell securities in New Jersey, information that could have prevented them from becoming a victim. As the case against Woodbridge moves forward, we will continue to identify and hold accountable the individuals that sold the unregistered securities in this alleged Ponzi scheme.”

Isaacs and his related entities, JMI Associates LLC and JB Financial Resources, marketed and sold the unregistered FPCMs in New Jersey, representing to investors through solicitation materials that the FPCMs were “a unique lending opportunity with higher yields that [are] simple, safer and secured.” 

According to solicitation materials, the Woodbridge Funds used the proceeds from the sale of the FPCMs to extend commercial loans to third-party commercial borrowers. 

In reality, however, the FPCMs sold by Isaacs were not immediately collateralized. In some cases, the loans were not extended to borrowers until weeks, or even months, after Isaacs sold the FPCMs to investors, according to the state.

Isaacs, JMI Associates LLC and JB Financial Resources through Isaacs, also represented to investors that there were no transaction fees for the FPCMs, nor were there any sales commissions to pay.  Contrary to this representation, Isaacs, directly or through JMI Associates LLC and JB Financial, was paid a fee for each FPCM they sold, the Bureau found.

Moreover, the Bureau Chief found that Isaacs, JB Financial Resources, and another related entity, 83 Delafield St., LLC, offered unregistered securities for sale in the form of promissory notes issued by 83 Delafield St., LLC (Delafield LLC). 

According to Isaacs, the minimum required investment amount in certain of the FPCMs issued by the Woodbridge Funds was $25,000, according to the state's press release.  For certain of Isaacs’ clients that could not, or did not want, to invest $25,000, Isaacs used Delafield LLC to facilitate smaller investments in the FPCMs issued by the Woodbridge Funds.

In order to meet the required minimum amount for investment in the FPCMs, Isaacs had investors remit checks to Delafield LLC.  Isaacs would then pool the investors’ funds, and Delafield LLC would purchase the FPCMs from the Woodbridge Funds on behalf of these smaller investors in its own name. The Woodbridge Funds would then pay the interest to Delafield LLC, which in turn would send interest payments to the investors, the state said.

Isaacs, JB Financial Resources, and Delafield LLC had at least six investors remit money to Delafield LLC. Delafield LLC in turn purchased at least four FPCMs with those investors’ funds.  The Woodbridge Funds listed Delafield LLC on the FPCM Documents with no reference to the investors in Delafield LLC.

In order to provide investors evidence of their investment in Delafield LLC, and in turn the FPCMs, Isaacs created a promissory note for the investors in Delafield LLC by copying the promissory note that the Woodbridge Funds would provide as part of the FPCM Documents.  According to Isaacs, he did this so the investor had “something tangible that they could take home with them,” the press release states.

Isaacs is the former President of the Livingston Alumni Association (LAA) and was honored April 9, 2016 as one of eight Loyal Sons and Loyal Daughters of Rutgers for 2016. In 2002, Isaacs received the Rutgers Alumni Meritorious Service Award to recognize his work in revitalizing the LAA.

Learn more about Isaacs' firm at jbfinancialresources.com.

 

TAP Into Another Town's News:

You May Also Be Interested In

Sign Up for E-News

South Plainfield

The Athlete of the Week Samantha Pullen Girls’ Spring Track

The South Plainfield High School Girls’ track team is off to another great start in the 2018 season.  Their record currently stands at 3-0. This past week, the Lady Tigers defeated divisional rivals Metuchen and Middlesex by the scores of 80-56 and 75-56.  They then went on to dominate Bishop Ahr by a score of 112-24.  Much of the Lady Tigers success has been due to the ...

The Athlete of the Week Tatianna Sutor Girls’ Lacrosse

The South Plainfield High School Girls’ Lacrosse team is off to a fantastic start to their 2018 season with a record of 2-0. This past week, the Lady Tigers crushed division rival Bishop Ahr by the score of 14-2, and then went on to beat Boonton 6-3.  A huge part of the success for South Plainfield has been due in a large part to the contributions of senior goalie Tatianna ...

Obituaries

Victor Kochmann, 92, passed away on Wednesday, March 21, 2018 surrounded by his loving family in ...
Read more

Letters to the Editor

Letter Welcoming Mike Zushma to Politics

April 19, 2018

Dear Editor, 

I'd like to welcome Mike Zushma to the world of politics and congratulate him on being selected as the town's Democratic Chairman.

 

I've served as Republican chair since 2009, and I've always enjoyed spending my time helping good people get elected to office.  In South Plainfield, it's never about party:  People work together and try ...

Natalie Stilo Signs with Drew University Golf Team

April 20, 2018

Natalie Stilo, Senior at Bishop George Ahr High School, has signed with Drew University's golf team. Currently, Natalie is on Bishop Ahr's golf team. Golf became her passion after her 10 year career in gymnastics ended. She has been working on her golf game and is excited to have the opportunity to play for Drew. She will attend Drew University in the Fall, majoring in Molecular Biology ...

Community Happenings

South Plainfield High School Hall Of Fame Is Seeking Nominees

April 19, 2018

SOUTH PLAINFIELD, NJ - The South Plainfield High School Hall of Fame Committee is again holding their search for candidates for induction into the SPHS Hall of Fame.  The Hall of Fame was established at South Plainfield High School to recognize outstanding graduates as leaders in their fields who could serve as role models for current and future students.

Candidates will be evaluated on ...

Meet with Assemblywoman Yvonne Lopez - 19th Legislative District

April 24, 2018

New Jersey State School Board's Legislative Advocate Christopher Jones (l to r), Assemblywoman Yvonne Lopez 19th District, Lucille Bloom, Delegate New Jersey School Boards Association Board of Directors and member of the Sayreville Board of Education and Middlesex County School Board's President Debbie Boyle and member of the  South Plainfield Board of Education  met on April ...

Holy Savior Academy to Hold Open House on April 24

April 18, 2018

SOUTH PLAINFIELD, NJ – Holy Savior Academy, an AdvancedED accredited Middlebrook Deanery Catholic School located in South Plainfield, will hold an open house the evening of Tuesday, April 24.At this time, prospective students and their families in pre-K3 through 8th grade will have the opportunity to tour the school, meet teachers and register. 

“Holy Savior ...

22nd Annual James and Doris Boyle Memorial Golf Tournament Scheduled for June 2

April 25, 2018

SOUTH PLAINFIELD, NJ – The 22nd Annual James and Doris Boyle Memorial Golf Tournament will take place at the Heron Glen Golf Course in Ringoes, NJ this year on Saturday, June 2, beginning at 1 p.m. The annual event, hosted for the past two decades by the South Plainfield-based Boyle Memorial Foundation, helps fund scholarships for the community’s high school ...

Part Time Position in Municipal Court

The South Plainfield Borough is seeking to hire a part time person with strong customer service skills to perform detailed Municipal Court clerical work.

Responsibilities include but are not limited to:

Answering telephone and walk in inquiries, data entry, maintaining files and records for accuracy, processing payments, related duties as required.

Successful candidates should process ...

Upcoming Events

Carousel_image_bad097ae8b2fe018094c_mayors_wellness

Sat, April 28, 9:00 AM

South Plainfield

Spring Wellness Health Fair - Mayor's Wellness

Carousel_image_5cb3a344be063f4eef87_hf_2018_updated-page-001

Sat, April 28, 9:00 AM

South Plainfield

South Plainfield's Annual Health and Fitness Fair

Carousel_image_540ba92b7ee7d0a56fba_elvis_tribute_final

Sat, April 28, 7:00 PM

South Plainfield

A Tribute to our Veterans - Jim Barone

Carousel_image_7869a9df10fb5a82bf59_autismawareness18-page-001

Sun, April 29, 2:00 PM

South Plainfield

Autism Awareness Event on April 29th

Carousel_image_655bff643922e36ca526_color_me_flyer_final_cut__3_-page-001

Sat, May 5, 9:00 AM

Sewaren

Color Me Run to End Domestic Violence

Columns

Retro Review: Johnny Got His Gun by Dalton Trumbo

Retro Review: Johnny Got His Gun by Dalton Trumbo (Citadel Press, 1970)

 

How does a reviewer do justice to a book called “the great American novel”? I first read Johnny Got His Gun during the Viet Nam war, when young people, nationwide, were protesting fighting in a war that was a senseless waste of life; a war in which the United States had no business participating.

Bookmarks

Your library is a hub of education and entertainment that is available to you not just when the library is open, but at all hours, thanks to our great online resources.  

If you want to brush up on your computer skills, or learn something new, try Learning Express.  You can access it through the library’s website. Once you’ve registered (you’ll need ...

Press Releases

Pack 224 bids Farewell to Arrow of Light Scouts

April 24, 2018

It is with great pride and pleasure that Riley School Cub Scout Pack 224 acknowledges the dedication of the Arrow of Light den members who are now officially Boy Scouts.  All three have chosen to join Boy Scout Troop 309.  Since they were in first grade, Kevin Casaliggi, Lorenzo Fuscoletti, and Colin Morris have dutifully and consistently completed the necessary requirements to reach ...