Jurisdiction When Real Estate Fraud Occurs Outside of New Jersey But the Property is Located In New Jersey
Appellate Docket No.: A-1151-19
Decided February 23, 2021
Submitted by New Jersey Criminal Lawyer, Jeffrey Hark.
In an unpublished opinion, the Appellate Division of New Jersey reviewed whether a denial of a motion to dismiss the indictment for lack of jurisdiction was appropriate when the defendant’s actions were conducted entirely out of the State of New Jersey.
In State v. Zhou, In January 2017, a real estate title agency, Seaboard Title Company, received a fraudulent email that caused the agency to transfer funds from an escrow account. Seaboard is located in Avalon, New Jersey. The escrow account contained the proceeds of the sale of property in Avalon. Prior to closing, the real estate agent for the seller, RJ Soens, instructed Seaboard to mail a cheque for the proceeds of the sale in the amount of $788,477. Seaboard thereafter received an email, purportedly sent by Soens, requesting that the proceeds be sent instead by wire transfer. However, that email was not sent from Soens— rather, the originating email address was nearly identical to Soens’s save for a subtle misspelling. Deceived into believing that Soens had sent new instructions, Seaboard wired the proceeds of the sale to the Wells Fargo Bank account referenced in the fraudulent email. That account, which was opened and serviced at a branch in Santa Clara, California, was in the name of Happy Oceans, Inc. Defendant’s signature is the only signature on that account. The proceeds of the sale were transferred almost immediately from defendant’s Wells Fargo account to accounts outside the United States.
Law enforcement agencies in other States were investigating similar fraudulent transactions involving defendant. In the course of those investigations, defendant admitted to receiving large sums of money and sending the money to foreign accounts. She admitted to investigators that she knew some of the transferred funds were the result of fraudulent activity. She also admitted to lying on multiple occasions to conceal fraudulent transactions.
Based on this evidence, a grand jury returned an indictment charging defendant with first-degree financial facilitation of criminal activity, N.J.S.A. 2C:21-25(b)(2)(a); second-degree theft by deception, N.J.S.A. 2C:20-4; and second-degree impersonation, N.J.S.A. 2C:21-17(a)(1). Defendant filed a motion to dismiss the indictment arguing that New Jersey lacks jurisdiction to prosecute her for these crimes.
The Judge denied the motion, acknowledging that although the defendant acted entirely outside the State of New Jersey, because the property and sale was located in New Jersey and that was a victim of this fraudulent activity, New Jersey had jurisdiction. The Defendant plead to second-degree financial facilitation of criminal activity. Defendant appealed the ruling of the motion on jurisdiction. The Appellate Division affirmed on the same grounds as the trial court.
Jurisdiction is necessary for courts to entertain and decide a matter. For criminal matters, New Jersey may exercise jurisdiction for offenses that occur within its borders, for offenses committed partly outside of the State, the conduct of an element of an offense occurs in New Jersey, or whether an offense affected property located in the State or harmed an individual. New Jersey can have jurisdiction in any of these scenarios so long as there exists a direct nexus to New Jersey.
Lack of jurisdiction may be a defense for your matter. If you are charged with a crime and have questions about jurisdiction for your matter, contact Hark & Hark today.
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