Westfield Man Pleads Guilty to Stealing $5.3 Million in Real Estate Scam

A Westfield man pleaded guilty to stealing $5.3 million entrusted to him as a settlement agent to pay off multiple mortgage loans from real estate properties he managed with his company, Affinity Title Agency, Inc., Acting Attorney General John J. Hoffman announced on Thursday.

Louis Macaluso, 47, pleaded guilty to first- and second-degree charges of theft and misconduct by a corporate official. Under a plea agreement, the state will recommend he serves 10 years for each charge, Hoffman said. The sentences would run concurrently and he would be required to pay $10,000 in fines.

Macaluso admitted he did not use the $5.3 million to pay off 34 outstanding mortgage loans on properties in New Jersey, Pennsylvania, Maryland and Ohio between July 2010 and September 2012. Instead, he used the funds for personal use or his company, Affinity Title Agency, Inc., according to the Attorney General’s Office.

“Real estate sales frequently attract con artists because of the huge sums of money involved,” Hoffman said.  “It is particularly alarming, however, when individuals who run licensed businesses engage in theft, because their crimes undermine confidence in the industry. We will continue to work closely with the Department of Banking and Insurance to uncover such crimes and aggressively prosecute those who abuse their licenses.”

The companies that insured the titles on the properties ended up paying off the mortgages of the homeowners in full.  New Jersey Title Insurance Co., Commonwealth Land Title Insurance Co. and Title Resource Guaranty Co. suffered losses during the transactions and filed a lawsuit against Macaluso, who is required to pay full restitution, the office said. He has made an initial payment of $700,000.

Malcaluso must surrender his New Jersey insurance provider license, according to the Attorney General’s Office acting on behalf of New Jersey Department of Banking and Insurance. The New Jersey based, Affinity Title Agency, Inc. is no longer in business.

Malcaluso’s sentencing is scheduled for Jan. 3, 2014.