Acting Attorney General John J. Hoffman announced that the operator of a Maplewood debt adjustment firm was indicted today for allegedly defrauding customers by promising them big reductions in their monthly bills and then stealing their money in a Ponzi scheme.
The Division of Criminal Justice Financial & Computer Crimes Bureau today obtained a state grand jury indictment charging Germain Theodore, 34, of Maplewood, with second-degree theft by failure to make required disposition of property received. It is alleged that Theodore recruited customers for his purported bill payment and debt consolidation business, TGC Movement, Inc., by claiming that he could reduce their monthly bills by 35 percent. Theodore allegedly told clients that if they paid 65 percent of their bills to TGC, plus a fee, TGC would arrange for their bills to be paid in full. It is alleged that, in fact, Theodore quickly stopped paying bills for the clients and instead stole their payments.
It is alleged that from May 2013 through his arrest on Oct. 15, 2013, Theodore stole more than $250,000 from over 200 clients of TGC Movement, Inc. The Attorney General’s Office commenced a civil investigation through the Division of Consumer Affairs in September 2013 after receiving complaints from numerous customers of TGC. The Division of Consumer Affairs subsequently referred the matter to the Division of Criminal Justice for a criminal investigation. The Essex County Prosecutor’s Office and the Maplewood Police Department assisted in the criminal investigation.
After his arrest, Theodore posted bail and opened a business in Jersey City called Save My Future, through which he allegedly engaged in the same type of fraud. In August 2014, he was re-arrested on a criminal complaint charging him with theft in connection with numerous customer complaints related to Save My Future. The Division of Criminal Justice is continuing to investigate the alleged thefts in Jersey City, with assistance from the Jersey City Police and the Hudson County Prosecutor’s Office.
“Theodore is the worst kind of con artist, because he allegedly stole from people who already were struggling financially,” said Acting Attorney General Hoffman. “We allege that he gained the trust of his vulnerable victims by promising them a way out of their financial woes, but then he ruthlessly betrayed them, leaving them even deeper in debt.”
“Theodore’s greed knew no bounds. While free on bail on charges that he stole from hundreds of clients in Maplewood, he allegedly had the audacity to launch the same type of scheme in Jersey City to defraud even more victims,” said Director Elie Honig of the Division of Criminal Justice. “We’re continuing our investigation in Jersey City to ensure that Theodore is held accountable for all of his alleged crimes.”
The investigation revealed that Theodore advertised TGC as a bill payment and debt reduction service. TGC had offices on Springfield Avenue in Maplewood. Clients were told that if they submitted their unpaid bills to TGC, along with payment for 65 percent of the outstanding balance of those bills, TGC would remit payment in full to the client’s creditors. TGC also charged an 8 percent fee to the client. Theodore and other employees of TGC variously represented to prospective clients that either funding from a government grant program or private investors paid the remaining 35 percent of the clients’ bills.
Typically, TGC initially paid the full amount promised, in order to gain the trust of the client. In most cases, the client’s bills were paid in full after the client’s first and second visits to TGC. Thereafter, however, TGC allegedly did not make the promised payments, and the client’s bills went unpaid, even though TGC continued to receive 65 percent of the outstanding balance and the 8 percent fee from the client. It is alleged that Theodore operated TGC as a classic Ponzi scheme, using money from new clients to pay the first bills submitted by earlier clients.
Deputy Attorney General Janet R. Bosi presented the case to the state grand jury for the Division of Criminal Justice. The investigation was conducted for the Division of Criminal Justice Financial & Computer Crimes Bureau by Deputy Attorney General Bosi, Deputy Attorney General Jacqueline Weyand, retired Deputy Attorney General Frank Brady, Detective Scott Stevens, Detective Mark Byrnes, Detective Roxanna Ordonez-Fresse and Analyst Kim Geis, under the supervision of Deputy Attorney General Michael A. Monahan, who is Bureau Chief, and Lt. Harry Maronpot.
Acting Attorney General Hoffman thanked the Essex County Prosecutor’s Office and the Maplewood Police Department for their assistance in the criminal investigation. He also thanked the Division of Consumer Affairs for its civil investigation and referral.
Second-degree charges carry a sentence of five to 10 years in state prison and a criminal fine of up to $150,000. The indictment is merely an accusation and the defendant is presumed innocent until proven guilty.
The indictment was handed up to Superior Court Judge Mary C. Jacobson in Mercer County, who assigned the case to Essex County, where Theodore will be ordered to appear in court for arraignment at a later date.
The indictment is posted with this press release at www.njpublicsafety.com.