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State v. Harris

November 29, 2004

STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
SONIA HARRIS, DEFENDANT-APPELLANT.



On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-01-04-23.

Before Judges King, Newman and Holston, Jr.

The opinion of the court was delivered by: Holston, Jr.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 20, 2004

In this matter of first impression, we hold that N.J.S.A. 2C:21-25b(1) encompasses in its definition of money laundering any possession of property known to be derived from criminal activity with the intention to promote further criminal activity. No independent predicate offense is necessary to the promotion prong of New Jersey's money laundering statute.

On April 6, 2001, a State Grand Jury returned indictment No. SGJ 438-01-6 charging defendant, Sonia Harris, with first-degree conspiracy to commit financial facilitation (money laundering), N.J.S.A. 2C:5-2 and N.J.S.A. 2C:21-25c (count one); first-degree money laundering, N.J.S.A. 2C:21-25b(1) and N.J.S.A. 2C:20-6 (count two); second-degree conspiracy to commit theft by deception, N.J.S.A. 2C:20-4 and N.J.S.A. 2C:5-2 (count three); second-degree theft by deception, N.J.S.A. 2C:20-4 and N.J.S.A. 2C:2-6 (count four); and second-degree misapplication of entrusted property, N.J.S.A. 2C:21-15 and N.J.S.A. 2C:2-6 (count five). After a nine-day trial, on July 5, 2002 the jury found defendant guilty on all counts. On January 31, 2003, defendant was sentenced to an eighteen-year aggregate term of imprisonment with a four-year parole disqualifier. We affirm.

Defendant, an attorney at the time, represented George Shamond Scott (Scott), a real estate developer.*fn1 Scott was owner and CEO of Ace Management Company (Ace), which he used to buy and sell properties through a practice called "flipping." Scott contracted to buy property and then sold the property before legally acquiring it. Scott also purchased property and acquired multiple mortgages without paying off the existing mortgage.

The "flip" enabled Scott to sell a house prior to actually owning a house so he could use the funds in a subsequent purchase. He paid Lisa Dumey of Rice Title Agency to falsify title documents to reflect that there were no existing mortgages. Scott paid mortgage brokers to help him secure the mortgages. Scott maintained separate identities, George Scott and Shamond Scott, to facilitate the fraudulent real estate transactions. Scott made nearly $1,000,000 in illicit proceeds from the transactions.

Defendant was the closing attorney in some of these transactions. Defendant failed to file and record title documents and failed to disclose pre-existing mortgages. Defendant also maintained an attorney trust account for the funds derived from the illicit transactions and drew checks to the order of Scott, to cash, or to another recipient. Scott paid defendant a total of $14,000 in legal fees.

This conviction arises out of the purchase, sale, and refinancing of two properties located at 11 East Greenbrook Road and 10 Lakeside Avenue, North Caldwell. In 1999 Scott, through Ace and while represented by defendant as his lawyer, entered into a contract to buy a house located at 11 East Greenbrook Road from the Gilligans, represented by Robert Candido, Esq., for $390,000. After the December 12, 1998 deposit check was returned for insufficient funds, defendant sent a replacement deposit check dated February 9, 1999 to Candido written on defendant's attorney trust account for $18,500. The proposed closing date was April 1, 1999. Over the following months, defendant did not respond to any of Candido's numerous attempts to arrange a closing date. On May 5, 1999, Candido wrote a letter to defendant terminating negotiations for the sale of the house.

Ace, not disclosing that it did not own the property, sold the house to Robert Arangeo for $430,000. Scott helped Arangeo obtain a $300,570 mortgage and told Arangeo that Ace would manage the property for a fee. Scott showed Arangeo and the mortgage company fabricated title work indicating that he purchased the property from the Gilligans. Defendant prepared the closing documents and represented both Ace and Arangeo at the closing. The proceeds of the sale were deposited into defendant's trust account. Arangeo believed that his purchase of the property was an investment and that Ace was managing the property and making the mortgage payments. Arangeo visited the house for the first time approximately one year later, only to discover that the house had been demolished and that he never actually owned the house. At the time of trial, Arangeo remained obligated to the mortgage company.

On April 14, 1999, after the property was purportedly transferred from Ace to Arangeo, Scott used a falsified title indicating that Ace was the owner of the property to obtain a $360,000 mortgage. Ace sold the property to George Scott for $480,000. Defendant was the closing attorney. On June 2, 1999, the Gilligans, the actual owners, sold the property to a third party for $422,000. Candido recorded the deed.

On June 4, 1999 Ace, without ever having owned the property, purportedly sold the house to "Shamond Scott" for $389,000. Defendant asked a professional acquaintance, Athena Alsobrook, Esq., to represent Ace at the closing because defendant was representing Scott, the buyer. Defendant told Alsobrook that Ace owned the property, and Alsobrook relied on the representation when reviewing the title certificate. Defendant prepared the closing statement stating that Ace owned the property. Defendant represented "Shamond Scott" at the June 4, 1999 closing, notarizing a document used to obtain a $311,200 mortgage that George Scott signed as "Shamond Scott." The mortgage company was lead to believe that the mortgage was the first mortgage on the property.

On August 27, 1998, defendant, on behalf of Ace, entered into a contract of sale with Henry and Roseann Capozzi, represented by Anthony Colasanti, Esq., to purchase a residential property located at 10 Lakeside Avenue, North Caldwell, for $535,000. On September 30, 1998, Ace, without having title to the property, sold the residence to George Scott for $725,000. Defendant prepared the closing statement and obtained the title documents indicating that Ace purchased the property from the Capozzis on January 8, 1998 even though no such sale ever occurred. Scott, using the fraudulent closing documents drafted by defendant, obtained a $471,250 mortgage. The mortgage permitted Scott to ultimately purchase the property from the Capozzis.

On October 30, 1998, the Capozzis sold the property to George Scott for $535,000. Defendant paid part of the purchase price by writing a $25,000 deposit check against her attorney trust account. Defendant was the closing attorney. On December 9, 1998, George Scott obtained a $100,000 second mortgage.

On June 23, 1999, George Scott purportedly conveyed the property to "Shamond Scott" for $725,000. Defendant was the closing attorney. Scott signed the contract for both himself and "Shamond Scott." Shamond Scott sent the mortgage company a title report, signed by defendant, indicating that he was the owner of the property. Scott obtained a $580,000 refinance mortgage to pay off the two outstanding mortgages of $471,250 and $100,000. Defendant did not pay off the two mortgages but, instead, deposited the proceeds into her attorney trust account. Defendant wrote checks on her attorney trust account, at Scott's direction, for unrelated matters, including a check to Scott for $400,000. Scott paid defendant $5000 for the closing of the Lakeside Avenue property.

Defendant raises the following issues for our consideration.

ISSUE I

THE MONEY LAUNDERING STATUTE WAS IMPROPERLY APPLIED TO THE FACTS AT ISSUE IN THE INSTANT CASE. (not raised below)

ISSUE II

THE JURY INSTRUCTIONS ISSUED RESPECTING MONEY LAUNDERING WERE PALPABLY INSUFFICIENT.

N.J.S.A. 2C:21-25 provides:

A person is guilty of a crime if the person:

a. transports or possesses property known or which a reasonable person would believe to be derived from criminal activity; or b. engages in a transaction involving property known or which a reasonable ...


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