Ruling Puts Hazlet Lawyer Accused Of Escrow Theft Back In Court

FREEHOLD, NJ – The prosecution of a former real estate lawyer from Hazlet will resume following a state Appellate Division decision that reinstates two counts of financial facilitation - or money laundering - in an indictment against him.

A Monmouth County grand jury had indicted attorney Steven H. Salami, alleging he'd misappropriated client funds in a series of real estate transactions, the court noted.

However Steven E. Nelson of Neptune, attorney for Salami, said he will be applying for certification before the state Supreme Court to challenge the Appellate Court ruling.

A 63-count indictment by Monmouth County consisted of 58 counts of third-degree misapplication of entrusted property, two counts of second-degree misapplication of entrusted property, one count of second-degree theft by failure to make required disposition of property, and two counts of first-degree financial facilitation of criminal activity, "colloquially referred to as money laundering," the appeals court said.

A lower court had granted Salami's motion to dismiss the two financial facilitation counts, but the prosecutor's office appealed the decision in January 2023.

"We are pleased with the recent decision and now intend to proceed with the prosecution," said a spokesman for the Monmouth County Prosecutor's Office on Monday.

The next hearing in the matter has been tentatively scheduled for Tuesday, Jan. 2, 2024 in Monmouth County Superior Court, he said.

Nelson said Salami had a gambling, drug and alcohol addiction problem and used the money for those personal uses. He said money laundering charges are not applicable to the case.

The trial court ruling said the financial facilitation legislation was "designed to combat enterprises such as organized crime and drug trafficking operations" and "it was clearly not intended to charge all persons who commit theft with the crime of money laundering," as summarized in the appeals court ruling.

However, the Appellate Court, citing certain case law, said in its Nov. 27 ruling "Because we are convinced the State presented sufficient evidence before the grand jury to support the charges of financial facilitation . . . we reverse the dismissal of those counts of the indictment and remand for their reinstatement."

Salami was charged in October 2019 by the then Monmouth Count prosecutor after an investigation revealed he stole from four victims from April 2019 through August 2019.

As a real estate attorney, Salami took funds from each victim for various real estate transactions and failed to do the work for which he was paid, the prosecutor's office said at the time.

The funds, which were given to him with the intent that they would be held in escrow for various real estate deals, were never returned to the victims, the charges said. Salami’s actions resulted in missed closing dates; nullified real estate transactions; and ultimately hardship to each victim, the prosecutor's office said at the time of Salami's arrest in 2019.

The investigation was conducted by the Monmouth County Prosecutor’s Office with assistance from the Hazlet Township Police Department.

According to the Appellate Division ruling, "the facts leading to defendant's indictment are easily summarized.":

• In September 2019, a client of the defendant's (Salami) complained to the Monmouth County Prosecutor's Office's that she'd retained defendant two months earlier to represent her in the purchase of a townhouse, providing him $30,000 to be held in escrow. The closing never occurred, and defendant failed to return the escrowed funds.
• When a detective reached out to the New Jersey Lawyer's Fund for Client Protection, he learned three other clients had made similar complaints about defendant. On interviewing those individuals, the detective learned one claimed she'd retained defendant in April 2019 to represent her in a real estate transaction. The deal never closed, however, because defendant failed to transfer the $47,000 she'd wired to his trust account and never returned her money.
• Another client claimed he'd hired the defendant in August 2019 to represent him in his home purchase. After he'd wired $178,000 to defendant's trust account, defendant stopped answering his calls. Defendant never transferred the money to the seller, resulting in the client losing both the house and his $178,000.
• The third client claimed she'd retained the defendant to represent her in two real estate transactions in the summer of 2019. She claimed she'd wired $10,000 to defendant's trust account for a business deal in which she was to purchase two homes in Plainfield. After the closing fell through for reasons unrelated to defendant, he failed to return her money. The same client claimed defendant had represented her in the sale of a condominium, in which the buyer had wired an $18,000 deposit to defendant's trust account. The client claimed defendant failed to show up to represent her at the closing, and although the sale went through, defendant never provided her the $18,000 he was holding in escrow.

After the prosecutor's office issued a press release in 2019 announcing Salami's arrest, the office received "hundreds of phone calls" from other clients alleging defendant had stolen funds from them, too, the appeals court said.

The prosecutor alleges Salami "swindled 60 clients of a total of $1,179,990.59," although Nelson said yesterday that Salami had paid some of the money back and the figure is lower, but "over $500,000."