TRENTON
—Attorney General Peter C. Harvey
and Vaughn L. McKoy, Director, Division
of Criminal Justice, announced that the
business partner and cohort of the president
of a sham Ocean County investment corporation
has been ordered to repay $670,000 to
investors who had deposited monies earmarked
for supposed legitimate investment opportunities
- the investment opportunities were non-existent.
According to Criminal Justice Director
McKoy, Ocean County Superior Court Judge
Edward J. Turnbach ordered Lawrence S.
Magenheim, 50, of Greenwood Dr., Freehold,
Monmouth County, to pay $670,000 in restitution
to 14 victims who suffered financial losses
as a result of the sham investment scheme.
Magenheim was also sentenced to five years
probation.
"Investment
scams, predatory lending and other financial
frauds are serious problems in New Jersey.
These crimes have the attention of the
Division of Criminal Justice - Financial
Crimes Bureau and will be prosecuted whenever
and wherever uncovered," Director
McKoy said. "The Division is stepping-up
the investigation and prosecution of financial
crimes, including investment fraud, mortgage
and real estate appraisal fraud, and other
financial crimes. So-called business persons
who endeavor to manipulate financial transactions
and business dealings will be called to
task and will pay a price."
McKoy noted that Magenheim pleaded guilty
before Judge Turnbach to two theft charges
on Sept. 13, 2002. In pleading guilty,
Magenheim admitted that he, along with
Robert G. McLaughlin, 70, Davina Court,
Lakewood, Ocean County, concocted a scheme
to defraud investors. McLaughlin was indicted
by a State Grand Jury in September, 2002.
The indictment charged that between February,
1998 and September, 1999, Magenheim and
McLaughlin, through Lawrence Investment
Corporation, solicited $546,000 in investment
monies from at least eight individuals
for the purported purchase of a foreign
bank. As part of the "pitch"
to potential investors, Magenheim and
McLaughlin provided a broad description
of the investment, telling the investors
that they would be providing money for
various "up-front" fees. The
investors were promised significant returns.
The investments did not exist.
The Division of Criminal Justice - Financial
Crimes Bureau investigation uncovered
evidence that Magenheim independently
solicited more than $65,000 from additional
investors, while McLaughlin independently
solicited another $425,000 from yet other
potential investors. The victims were
from New Jersey, New York, Florida, Texas
and California. Magenheim turned much
of the money over to McLaughlin or used
the funds for personal expenses.
McLaughlin was sentenced on Oct. 10 to
a term of five years in state prison and
ordered to pay restitution to the victims
of the scheme.
The investigation was coordinated by Deputy
Attorney General William T. McGovern and
State Investigator John J. Scalabrini
of the Division of Criminal Justice -
Financial Crimes Bureau.
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