AG’s Office Secures Conviction of Sussex Businessman

• AG’s Office Secures Conviction of Sussex Businessman

The Attorney General’s office today announced the conviction of James Tennefoss, of Bridgeville, on two counts of felony theft. This conviction reaffirms Attorney General Biden’s commitment to protecting Delaware’s property owners and others whose homes and hard-earned investments are threatened by fraud.

For more information, check out this story from WBOC.com, reprinted below.

Sussex County Businessman Convicted of Theft in Land Sale Scheme
By Kye Parsons

GEORGETOWN, Del.- James Tennefoss, a business owner and former owner of the Jimmy’s Grill restaurant in Bridgeville, was convicted Thursday of two counts of felony theft related to his sale of two Sussex County properties, according to the Delaware Department of Justice.

Prosecutors say that during both sales, Tennefoss, 59, of Bridgeville, 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.

Prosecutors say that on Jan. 7, 2005, Tennefoss sold a 10-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. Prosecutors say that however, Tennefoss had used the property in 2001 to secure a mortgage on a $56,000 loan he obtained from Louis Holloway of Nanticoke, Md.

According to prosecutors, on Dec. 4, 2006, Tennefoss sold a 1-acre property adjacent to Route 113 in Georgetown to Alejandro Soto. Prosecutors say that 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 Holloway, according to prosecutors.

Prosecutors say these properties were sold by Tennefoss through companies in which he served as owner and president. Prosecutors noted that at closing of the Bridgeville property Tennefoss’s corporation, Jim Lee, Inc., received a check for more than $223,000. They say that 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, according to prosecutors. As a result, the lender, 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.