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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19372 / September 12, 2005

SECURITIES AND EXCHANGE COMMISSION v. NJ AFFORDABLE HOMES CORP. AND WAYNE PUFF, Civil Action No. 2:05-CV-04403 (JLL) (D.N.J.)

SEC BRINGS EMERGENCY ACTION AGAINST NJ AFFORDABLE HOMES AND WAYNE PUFF TO HALT ONGOING FRAUDULENT OFFERINGS OF SECURITIES

The Securities and Exchange Commission announced today that it filed an emergency enforcement action to halt fraudulent unregistered offerings of securities and an ongoing Ponzi scheme orchestrated by NJ Affordable Homes Corp. ("NJ Affordable") and its owner and president, Wayne Puff ("Puff") (collectively, the "Defendants").

The Commission's Complaint alleges that from at least 1999 to the present, NJ Affordable and Puff have sold, in unregistered offerings, at least $40 million in notes to more than 490 investors located throughout the United States. In selling the notes, the Defendants made, and continue to make, materially misleading misrepresentations and omissions concerning investment risk and the nature of NJ Affordable's business. The Commission alleges that NJ Affordable and Puff guaranteed investors high rates of return, between 15% and 20%, based on promises that NJ Affordable and Puff would use the investors' money to fund the purchase, renovation, and resale of real property. The Defendants failed to disclose to investors that they could not pay such high rates of return, are funding payments to existing investors by soliciting new investor money, and are generating fictitious revenue by selling their properties to insiders, investors, and affiliated entities. Moreover, the Commission alleges that NJ Affordable and Puff failed to tell investors that the investment is not as secure as promised because NJ Affordable and Puff routinely inflate the value of the property upon which NJ Affordable granted mortgage interests.

The Complaint charges NJ Affordable and Puff with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder.

In its emergency enforcement action, the Commission is seeking, among other emergency relief, a temporary restraining order (i) freezing the assets of NJ Affordable and Puff; and (ii) appointing a temporary receiver over NJ Affordable. In addition to this emergency relief, the Commission also seeks orders enjoining NJ Affordable and Puff, preliminarily and permanently, from committing future violations of the foregoing federal securities laws, and a final judgment ordering NJ Affordable and Puff to disgorge ill-gotten gains, and assessing civil penalties.

* SEC Complaint in this matter

* SEC Complaint Exhibit


http://www.sec.gov/litigation/litreleases/lr19372.htm


Modified: 09/12/2005