Robert M. Sebia, 50, of Wilkes Barre, Pa., who owned and operated Crystal Title Agency, LLC, pleaded guilty today to an accusation charging him with second-degree theft by failure to make required disposition of property received and second-degree misconduct by a corporate official before Superior Court Judge Michael Toto in Middlesex County. Under the plea agreement, the state will recommend that Sebia be sentenced to six years in state prison on the theft charge and five years in prison on the other charge, with the sentences to run consecutively, for a total sentence of 11 years in state prison. He must surrender his New Jersey insurance license and enter a civil consent judgment to pay restitution of $7.7 million to First American Title Insurance Company, which was responsible for paying the claims filed as a result of Sebia’s thefts. Judge Toto scheduled sentencing for Sebia for Nov. 9.
Deputy Attorney General Peter Gallagher took the guilty plea for the Division of Criminal Justice Financial & Computer Crimes Bureau. The investigation by the Division of Criminal Justice began with a referral from the New Jersey Department of Banking and Insurance.
In pleading guilty, 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. The unpaid balances totaled approximately $7.7 million. Sebia diverted the funds for his own use or the use of Crystal Title Agency. First American Title Insurance Company, which had insured the titles on the properties, is paying off the mortgages in full for the affected homeowners. First American reported the thefts to the Department of Banking and Insurance. Crystal Title is no longer in business.
“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,” said Acting Attorney General Hoffman. “Sebia’s crooked $8 million spending spree is ending with this guilty plea and a lengthy prison sentence.”
“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,” said Director Elie Honig of the Division of Criminal Justice. “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.”
The investigation by the Division of Criminal Justice determined that Sebia would use the proceeds from new mortgages and real estate closings to pay off older mortgages that he had failed to pay off as a result of previous thefts. In some cases, Sebia would continue to pay a seller’s monthly mortgage payments to the bank even though the property had been sold and the real estate settlement had occurred. Since the mortgage bank continued to receive monthly mortgage payments, it was unaware that it should have received sale proceeds to pay off the seller’s mortgage when the real estate transaction closed.
Meanwhile, Sebia also diverted stolen funds to cover large operating losses of Crystal Title Agency. Sebia spent lavishly on business development for Crystal Title, throwing expensive parties where he hosted industry professionals. He also used stolen funds to pay extravagant personal expenses, including travel, entertainment, luxury items and rent payments.
Deputy Attorney General Gallagher prosecuted the case for the Division of Criminal Justice Financial & Computer Crimes Bureau with assistance from Deputy Attorney General Jillian Carpenter. Detective Kimberly Allen was the lead detective for the Division of Criminal Justice. Acting Attorney General Hoffman thanked the Department of Banking and Insurance for its referral.