On April 21, 1996, at 1250 eastern daylight time, a Mooney M20K, N231KS, was substantially damaged during a forced landing after takeoff from the Greenwood Lake Airport, West Milford, New Jersey. The private pilot received minor injuries, while two passengers received serious injuries and one passenger was not injured. Visual meteorological conditions prevailed for the personal flight that originated at the Greenwood Lake Airport (4N1), about 1248. No flight plan had been filed for the flight conducted under 14 CFR Part 91. In his written statement, the pilot stated that an annual maintenance inspection had recently been completed on the airplane. He further stated: "...Kevin and a certified instructor had just flown the airplane to make sure that everything was 'okay'...He assured me that everything was 'okay' and that 'it all ran up fine'...I...filled it up with fuel and then proceeded to do a pre-flight...We loaded the aircraft...I did my run up...and took off in a normal fashion. The engine developed power as normal...about 500 feet above the airport elevation, the engine just totally stopped...I then proceeded to turn the airplane around...the gear was up and the flaps were up. So I continued around in that fashion with the intention of making it back to the runway...I got lined up with the runway...I began to believe that I could not make the runway...I didn't want to take the chance of possible not making the runway and stalling the plane over this stumped area...I decided to put the gear down and put it into the trees before I reached the stumped area...I hit trees about a thousand feet from where the stumped area begins...my wife told me that immediately following the engine failure there was a clear liquid on the windshield in front of her vision which she described to me as a misty clear liquid...this liquid continuing all the way up until we struck the trees..." According to a Federal Aviation Administration (FAA) Inspector, the airplane struck trees about 3/4 mile from the approach end of runway 06. Examination of the airplane revealed fuel in both wing tanks, and the fuel tank finger screens and vents were unobstructed. In the FAA Inspector's report he stated: "...On June 27, 1996, and engine test cell run was conducted at the Mattituck Airbase Inc. The results found that the engine started normally and performed acceptable through the required power ranges. The reason for the reported engine operating failure could not be determined."