I hope you had a rental contract with the person, that will help you collect. It will also be easier if the person is in NJ and you don't have to try to collect the "small claim" out of state.
Please don't take my comment to be critical of you, I am not. Any of us could have been the victims of a deal gone bad like this. But after reading this thread, everyone should remember that renting points, for both tenants and owners, is a business transaction and it's best if you treat it as such. You should have some sort of agreement memorializing the deal and any deviation from the deal should throw up red flags.
I hope we ALL learn from this thread. I know I have.
Good luck!