Sussex County businessman convicted of theft in land sale scheme

by Dave on August 13, 2010

James Tennefoss, a Sussex County business owner, was convicted yesterday of two counts of felony Theft related to his sale of two Sussex County properties. During both sales, Tennefoss stated under oath that the properties were free of mortgages or liens, despite his use of both as collateral in securing loans which he later stopped paying. After a three day trial the jury agreed with the prosecution that his false representations were acts of criminal Theft.

“Attorney General Biden is committed to acting to protect Delaware’s property owners and others whose homes and hard-earned investments are threatened by fraud,” stated Timothy Mullaney, Sr., Director of Attorney General Biden’s Fraud and Consumer Protection Division. “We want to recognize the hard work of our prosecution team in trying this case.”

On January 7, 2005, Tennefoss (age 59, of Bridgeville) sold a ten acre property near Bridgeville to Brenda and Preston Brasure. During the sale, he signed an owner’s affidavit stating there were no mortgages, liens, or other encumbrances on the property. However, he had used the property in 2001 to secure a mortgage on a $56,000 loan he obtained from Louis Holloway of Nanticoke, MD.

On December 4, 2006, Tennefoss sold a one acre property adjacent to Route 113 in Georgetown to Alejandro Soto. Again, during the sale, he signed an owner’s affidavit stating there were no mortgages, liens, or other encumbrances on the property. However, he had used the property in 2000 to secure a mortgage on a $41,500 loan he obtained in 1999 from Mr. Holloway.

These properties were sold by Tennefoss through companies in which he served as owner and president. At closing of the Bridgeville property Tennefoss’s corporation, Jim Lee, Inc., received a check for more than $223,000. At closing of the Georgetown property Tennefoss’s corporation, Southern Delaware Developers, Inc., received a check for more than $28,000. According to testimony from real estate attorneys, neither settlement would have gone through had he disclosed the mortgages on the properties.

In January, 2009, Tennefoss stopped making payments on the loans that were secured by the two properties. As a result, the lender, Mr. Holloway, initiated foreclosure proceedings against both properties and their new owners. In both cases, the buyers had title insurance, and the title insurance companies are involved in the foreclosure litigation, which remains ongoing.

Tennefoss was indicted on both charges of felony Theft earlier this year, and this week’s trial was held before Sussex County Superior Court President Judge James T. Vaughn Jr. A pre-sentence investigation was ordered and sentencing has not yet been scheduled. The case was prosecuted by Deputy Attorneys General Richard Hubbard and Ian McConnel.

-submitted release from Delaware Department of Justice

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