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UPDATE: This story was updated with comments from Steven Salami’s attorney.
A state appeals court on Monday reinstated two money laundering charges against a former New Jersey real estate attorney accused of stealing more than $1 million from clients.
Steven H. Salami faces 63 charges of stealing or misapplying trust account funds for clients’ real estate transactions in 2019. He was arrested in October of that year and disbarred two months later — an action he did not fight.
Real estate attorneys often temporarily hold large sums of client money in separate trust accounts, also called escrow, for down payments and other transactions.
Salami, who was based in Hazlet in Monmouth County, either failed to use trust money for the client real estate deals or pocketed it for personal use, authorities alleged.
During the ongoing criminal case in Monmouth County, his lawyer successfully argued to the trial judge that two of the charges should be dismissed — first-degree financial facilitation of criminal activity, more commonly known as money laundering.
The appeals court reversed that decision Monday, finding the judge erred in examining the allegations against Salami.
The judge found that Salami, who was accused of moving chunks of client money from his trust accounts to his business accounts, had not violated the money laundering law’s requirement of two transactions.
Such money movements are really one transaction, the judge reasoned, finding there was no “logical difference” between such a transfer and a common thief placing stolen money into his pocket.
During grand jury testimony, though, a Monmouth County detective presented evidence that Salami was using newer clients’ trust money to satisfy existing clients deals, essentially running a Ponzi scheme with his law practice.
That allegation qualifies as financial facilitation of criminal activity, the appeals court found.
A Monmouth County Prosecutor’s Office spokesman said Monday prosecutors are pleased with the decision and are proceeding with the case, which is next scheduled for a court hearing on Jan. 2.
Salami’s lawyer, Steven E. Nelson, said he and his client were hopeful the court’s appellate division would use the case to address the use of the money laundering law. “And they chose not to do so,” Nelson said.
Nelson and his client plan to file an application to have the state Supreme Court hear the case.
The appeals decision and state records show the case against Salami has grown in the past four years.
The prosecutor’s office issued a press release in early October 2019 reporting they had arrested Salami on charges relating to mishandling money of four clients, totaling $285,000. After news stories were published, the office received “hundreds of phone calls” from people reporting thefts, the decision says.
A detective later testified in front of a grand jury that investigators identified 60 instances in which Salami allegedly swindled a total of $1,179,990. Of that, Salami was accused of using $587,986 for his personal benefit.
According to the appeals decision, his trial lawyer said Salami had serious substance abuse and gambling problems for years and started to neglect his law practice in 2018, but accepted new clients well into 2019.
Two state bodies also started investigations.
First, the Office of Attorney Ethics disbarred Salami. The agency said Salami “acknowledged he could not defend against charges of knowing misappropriation of client and escrow funds.” Salami was also disbarred in New York.
And the New Jersey Lawyer’s Fund for Client Protection, which is funded by lawyers across the state and exists to reimburse people if their lawyers steal from them, started collecting claims.
One of that agency’s early Salami claims involved a man who in August 2019 allegedly wired $178,000 to Salami’s trust account for a home purchase. Salami allegedly stopped answering his calls, never transferred the money to the seller and the man lost the home and the $178,000.
This year, the client protection fund paid its 73rd and 74th reimbursements to Salami clients, for $10,000 and $24,000, records show.
The total payout is currently $1,574,660.
On his LinkedIn page, Salami says he currently works as a television producer.
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Kevin Shea may be reached at kshea@njadvancemedia.com
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