UPDATED: Lower Township Public Defender Arrested by FBI

ERMA — Lower Township Public Defender Seth Fuscellaro was arrested by the FBI during the morning ses-sion of Lower Township Municipal Court Thur., July 19.
Fuscellaro, 39, of Wildwood Crest and a partner in the Wildwood law firm of DeWeese, Stagliano and Fuscel-laro, was led from the court in handcuffs. Assisting with the arrest were members of the Cape May County Prosecutor’s Office.
Barbara Woodruff, FBI spokesperson, confirmed Fuscellaro’s arrest.
According to Fuscellaro’s law partner, David DeWeese, he was aware of an ongoing investigation involving mortgage fraud.
“He (Fuscellaro) represented developers who were selling properties to alleged “straw buyers” and they had an individual who was bringing these buyers in, apparently,” DeWeese told the Herald. “I think this just involves one project.”
DeWeese said he had no involvement in the investigation. “When the FBI came and asked me questions about it, I didn’t know anything about it. They have indicated that I clearly have no involvement.”
DeWeese added that in anticipation of “something happening to Seth” he and his law partners decided to dis-solve their partnership effective Sept. 1 and to go into individual practices.
“We knew there was the potential, but we didn’t know it would happen this quickly,” said DeWeese.
Lower Township Manager Michael Voll said Fuscellaro’s arrest came as a surprise to the township.
According to Voll, Fuscellaro was hired “two months ago after an unexpected vacancy occurred” in Municipal Court.
“There are very few attorneys who serve as municipal public defenders,” said Voll. Fuscellaro was selected by Lower Township to be its municipal public defender based on his position as public defender for several municipalities throughout Cape May County.
“The township is extremely disappointed that the federal investigation was not disclosed at the time he applied for the position, which likely would have led the township to considering another choice.”
According to a press release from the United States Attorney, Fuscellaro was part of a group of 11 individuals from five states who were charged in New Jersey in a $15 million mortgage fraud scam that used phony documents and “straw buyers” to make illegal profits on overbuilt condominiums. Included in the group of 11 is a defendant who attempted to murder a witness to the scheme.
Arrested with Fuscellaro were Willie W. Richardson, 64 of Bloomfield, Sean A. Souels, 42, of Philadelphia, Nancy E. Wolf-Fels, 55 of Toms River, Deborah Hanson, 49, of Voorhees, Larry L. Fullenwider, 61, of Mil-burn, Angela L. Celli, 41, of Somerset, Mass. All are in federal custody following their arrests by agents of the FBI and IRS – Criminal Investigation.
Dwayne K. Ongue, 44, of Belleville surrendered to authorities the morning of July 19. Timothy D. Ricks, 44, of East Orange and Orlando Allen, 47, of Fayetteville, Ga. were expected to surrender to federal authorities. Kinard J.Henson, 40, of Ventress, Ala. was already in federal custody in Alabama.
All 11 defendants are charged with conspiracy to commit wire fraud. Additionally, Ricks, Henson, Richardson, Allen and Onque were charged with conspiracy to commit money laundering. Henson also was charged with the attempted murder of a straw buyer who was a witness to the mortgage fraud scheme.
“According to the indictment, these defendants created false documents and used straw buyers to convince lenders to give them $15 million for properties that were worth far less,” said U.S. Attorney Paul Fishman. “Members of the scheme were willing to launder money – and even to kill – in order to get their hands on the profits and cover their tracks. This case illustrates not only the seriousness of mortgage fraud, but also our focus on eliminating the criminal element from our markets to protect the health of our wider economy.”
According to the indictment, Ricks and his co-conspirators located oceanfront condominiums overbuilt by financially distressed developers to purchase, negotiating a buyout price with the sellers of the properties. They then caused the sales prices for the properties – located in Wildwood Crest and North Wildwood in addition to other locations in New Jersey and in Naples, Fla. – to be much higher than the buyout price to ensure large proceeds. Celli and Fuscellaro helped conceal the true sales prices of certain properties through inflated sales con-tracts and sale and finder fee agreements.
Ricks, Henson, Allen, and Souels recruited straw buyers, such as Fullenwider and Onque, to purchase those properties at the inflated rates. The straw buyers had good credit scores but lacked the financial resources to qualify for mortgage loans. The conspirators created false documents such as fake W-2 forms, pay stubs, bank statements and investment statements to make the straw buyers appear more creditworthy than they actually were in order to induce the lenders to make the loans.
In order to prepare the straw buyers’ false loan applications, Ricks and his conspirators caused fraudulent mortgage loan applications in the name of the straw buyers, including supporting documents, to be submitted to mortgage brokers – including Wolf-Fels and Hanson – that the brokers knew were false, attributing to the straw buyers inflated income and assets. Once the loans were approved and the mortgage lenders sent the loan proceeds in connection with real estate closings on the properties, Ricks and his conspirators took a portion of the proceeds, by having funds wired or checks deposited into various accounts they controlled. They also distributed a portion of the proceeds to other members of the conspiracy for their respective roles.
Henson learned of a subpoena seeking documents in connection with a straw buyer’s purchases of real estate properties shortly after it was served by federal law enforcement agents on a mortgage brokerage firm. Henson, who had recruited the straw buyer, contacted another individual to kill the straw buyer. They lured the straw buyer to a wooded area in Mobile, Ala. At Henson’s direction and using Henson’s firearm, the other individual shot the straw buyer multiple times.
The wire fraud conspiracy charge carries a maximum potential penalty of 30 years in prison and a $1 million fine. The money laundering conspiracy charge carries a maximum potential penalty of 10 years in prison and a $250,000 fine. The attempted murder of a witness charge carries a maximum potential penalty of 30 years in prison and a $250,000 fine.
Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward in Newark; and IRS–Criminal Investigation, under the direction of Acting Special Agent in Charge John R. Tafur, Newark field office, for their roles in the ongoing investigation. The government is represented by Assistant U.S. Attorney Matthew T. Smith and Attorney in Charge R. Stephen Stigall of the U.S. Attorney’s Office Criminal Division in Camden