Woodbridge Businessman Admits Stealing $7.7 Million, State Says

The owner of a Woodbridge-based title company has pleaded guilty to stealing $7.7 million that was supposed to be used to pay off more than 28 mortgages on properties that were sold.

Robert M. Sebia, 50, a resident of Wilkes Barre, Pennsylvania, who owned and operated Crystal Title Agency, LLC, pleaded guilty Monday to theft by failure to make required disposition of property received and misconduct by a corporate official.

According to NJ.com, that title agency is now defunct, but it had been based in Woodbridge.

According to the news release from the the office of acting state Attorney General John J. Hoffman:

Sebia entered the pleas to the second-degree offenses before state Superior Court Judge Michael Toto in New Brunswick. The state plans to recommend an 11-year prison term at sentencing, scheduled for Nov. 9.

As part of the plea agreement, Sebia must surrender his New Jersey insurance license and enter a civil consent judgment that will require him to pay $7.7 million in restitution to First American Title Insurance Company, which paid the claims filed as a result of Sebia’s thefts.

In court, “Sebia admitted that between January 2014 and May 2014, he failed to use funds entrusted to him as a settlement agent to pay off more than 28 outstanding mortgage loans on various properties.”

He diverted that $7.7 million for his own use or the use of his company.

“Sebia basically was running a Ponzi scheme in which he stole new loan proceeds and used them to cover up earlier thefts of the same type, while diverting funds to bankroll extravagant personal and business expenditures,” Hoffman said in a prepared statement. “Sebia’s crooked $8 million spending spree is ending with this guilty plea and a lengthy prison sentence.”

Investigators from the state Division of Criminal Justice determined Sebia was using the proceeds from new mortgages and real estate closings to pay off older mortgages tied to his previous thefts.

In some cases, he continued to pay a seller’s monthly mortgage payments to the bank even though the property had already been sold. Because the bank continued to receive monthly mortgage payments, bank officials did not know the financial institution should have received sale proceeds to pay off the seller’s mortgage when the real estate transaction closed.

Sebia also used stolen funds to cover his company’s large operating losses. He threw expensive parties where he hosted industry professionals.

He also used the stolen money “to pay extravagant personal expenses, including travel, entertainment, luxury items and rent payments.”

“Homeowners, lenders and title insurers must be able to trust title agents, who handle hundreds of thousands of dollars each time they close a real estate transaction,” Elie Honig, the director of the Division of Criminal Justice, said in a prepared statement. “This guilty plea sends a strong deterrent message to such licensed agents that if they betray that trust and steal from clients, they will face a stiff prison sentence.”

First American Title Insurance Company reported the thefts to the state Department of Banking and Insurance. That insurance company is paying off the mortgages in full for the affected homeowners.

Deputy Attorney General Gallagher prosecuted the case with assistance from Deputy Attorney General Jillian Carpenter. Detective Kimberly Allen was the lead detective for the Division of Criminal Justice. Hoffman also thanked the Department of Banking and Insurance for its referral.

Photo courtesy NJ Attorney General’s Office