In a state often known for various types of criminal activity, charges have now been brought in another case of real estate fraud. This time a Montclair, New Jersey woman has surrendered to FBI based on a U. S. Attorney's Office complaint she was operating a multi-million dollar ponzi scheme.
According to Wikipedia, ponzi schemes are fraudulent investments that pay returns to investors either from their own money or money paid by subsequent investors. Rarely are returns paid from actual profit generated. Investors are enticed by very high rates of short-term return that other investments cannot match. Continued operation of the scheme requires an ever-increasing flow of money.
Telling investors she was buying and renovating homes in New Jersey, Antoinette Hodgson allegedly took millions from investors. Her company, Trinity Realty Group NJ, raised over $45 million while only spending around $6 million on actual residential real estate.
Trinity Real Group's web site calls the company a "privately owned real estate investment company." Claiming "unparalleled expertise and an unwavering commitment to our partner investors," tax assessor's records indicate the company is owned by Antoinette Hodgson.
Between 2006 and 2009, Hodgson, who also goes by Dina, solicited investors with promises of high returns on renovated properties. At the same time, she would use new money that she raised to return early investors money, a classic ponzi scheme pattern. Over the three years, however, she gambled away thousands of dollars in Atlantic City and Las Vegas casinos.
The Federal complaint indicates she also gave away large sums to friends and relatives as well as purchasing a $700,000 Dunkin Donuts franchise in Arizona. Charged with conspiracy to commit fraud and wire fraud, Hodgson could face a maximum sentence of 20 years in prison for each of the conspiracy and fraud charges.
"This case is a further reminder that whether the real estate market is up or down, innocent investors can be and will be targeted by unscrupulous fraudsters," U. S. Attorney Preet Bharara stated.
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