New Jersey Family Members Arrested on Condo Fraud Charges

The longer our economy struggles, the more reports of criminal activity come to light. New Jersey, long known for its less-than-scrupulous characters, announced recently that a father and son construction company were indicted for defrauding clients and a bank. The arrested pair targeted a condominium project in Jersey City.

Charges against David Garsia and his son David Jr. involve conspiracy, money laundering, theft by deception, securities fraud and misconduct by corporate officials. The complaint alleges the Garsias used their companies Metro North Construction, Metro Design Construction Group and Electrosys Systems to commit the various crimes.

Both Garsias are being held in the Morris County Jail and bail was set for each defendant at $500,000. For two years the Garsias' company, Metro North, was hired to renovate an existing building into 19 condominium units. It is alleged the defendants misrepresented themselves into being hired and knowingly deceived Unity Bank in Clinton.

The defendants allegedly performed substandard work and failed to complete the project. They also diverted construction funding from the project and laundered it through their construction companies. The Garsias used their various companies to create the illusion that subcontractors were not needed and all work could be done by Garcias' companies.

The son, David Garsia Jr., represented himself as an engineer and licensed architect although he held no licenses. In addition, the Garsias' gave false expenditure information to the bank and primary investor while using the construction draw-down account at Unity Bank.

During the course of their involvement in the project, the Garsias received around $2 million from Unity Bank based on false statements that certain levels of work had been completed. The defendants used the money for personal expenses rather than paying subcontractors and materials suppliers.

As questions arose regarding their business dealings, the Garsias co-mingled Metro North companies and shifted them into a fake entity, 237 Group Inc. The New Jersey Division of Criminal Justice filed for a civil forfeiture action to seize all assets of the defendants and their various companies.

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