Dozens Arrested in New Jersey Corruption Probe
WSJ, Jul 23 2009
Federal agents swept into New Jersey towns across several counties Thursday morning, charging 44 people, including three mayors and religious leaders, in a federal investigation into public corruption and money laundering. Weysan Dun, special agent in charge of the FBI’s Newark office, said more than 300 FBI and IRS agents began making arrests and executing search warrants at 6 a.m. Thursday. Those arrested in the corruption probe include Mayors Peter Cammarano III of Hoboken, Dennis Elwell of Secaucus and Anthony Suarez of Ridgefield, all Democrats; Leona Beldini, one of three deputy mayors of Jersey City, also a Democrat; and state Assemblyman Daniel Van Pelt, a Republican.
The money-laundering portion of the investigation swept up several rabbis in New York and New Jersey, according to Ralph Marra Jr., acting US attorney for New Jersey. In all, 29 people were caught up in the probe into public corruption, and 15 were implicated in the investigation into money laundering, including one Brooklyn man charged with conspiring to broker the sale of a kidney. Those arrested were expected to be arraigned in court Thursday afternoon. The case underscores “the pervasive nature of public corruption” in New Jersey, Marra said. Corruption among the politicians, he said, was “a way of life.”
At the center of the two investigations was a single “cooperating witness” who directed by the investigators attempted to bribe officials and engage others in money laundering schemes. A person familiar with the matter said the witness is an Orthodox Jewish real-estate developer named Solomon Dwek, a 36-year-old religious-school head and philanthropist from Ocean Township. In 2006, he was arrested and charged with defrauding PNC Bank out of $25m. He was forced to seek bankruptcy protection for himself and his companies, which owned about 300 residential and commercial properties. Dwek remained free on a $10m bond. A lawyer for Dwek couldn’t be reached for comment.
To ensnare most of the defendants, the FBI used Dwek to attempt to bribe public officials in New Jersey, including several in Hoboken and Jersey City, according to a person familiar with the matter. The probe roped in several other real-estate developers who also wanted to bribe officials. Cammarano, a 32-year-old who became Hoboken mayor on Jul 1, allegedly agreed to take $10,000 in bribes from the cooperating witness in exchange for supporting the developer’s future plans in Hoboken, the once-hardscrabble, now gentrified hometown of Frank Sinatra across the river from Manhattan. The alleged bribes occurred during Cammarano’s mayoral campaign earlier this year, according to the FBI’s complaint, which also charged an associate of Cammarano, who allegedly served as a middleman and took cash for him. According to Marra, on May 19, before he was elected mayor of Hoboken, Cammarano said at a diner: “I could be indicted and still get 85% to 95% of the vote.”
Dwek was also the key to the money-laundering probe, according to the person familiar with the matter. Under the FBI’s direction, Dwek represented himself as someone who engaged in illegal businesses and schemes including bank fraud, trafficking in counterfeit goods and concealing assets and monies in connection with bankruptcy proceedings. In 2007, for example, Eliahu Ben Haim, the principal rabbi of Congregation Ohel Yaacob, a synagogue in the shore community of Deal, accepted a $50,000 check from the cooperating witness, which was drawn from an account held by a fictitious company set up by the FBI “for the purpose of enabling Dwek to launder money represented to be the proceeds of illegal activities,” according to one criminal complaint. Ben Haim was named as a co-conspirator in court documents. The check was made payable to one of Ben Haim’s charitable organizations “with the expectation that the proceeds would be returned to Dwek at a later date, minus a 10% fee to be retained by Ben Haim.”
Besides Ben Haim, the charged rabbis include Edmond Nahum, the principal rabbi of Deal Synagogue in Deal; Saul Kassin, a rabbi at Shaare Zion Congregation in the New York borough of Brooklyn; Mordchai Fish, a rabbi at a Brooklyn synagogue, Congregation Sheves Achim, and his brother, Lavel Schwartz, also a rabbi. Women who answered the phones at Ohel Yaacob and Shaare Zion both declined to comment. The alleged money-laundering operations run by the rabbis laundered about $3m for Dwek since Jun 2007, according to the court documents and a person familiar with the matter. The rabbis used charitable, nonprofit entities connected to their synagogues to “wash” money they understood came from criminal activity, prosecutors alleged. “The rings were international in scope, connected to Deal, N.J., Brooklyn, N.Y., Israel and Switzerland,” said Marra, the US attorney, at the news conference. “They trafficked in the cleaning of dirty money all across the world.”
Levy Izhak Rosenbaum of Brooklyn was charged separately with conspiring to broker the sale of a human kidney for a transplant, at a cost of $160,000 to the transplant recipient. According to the FBI’s complaint, Rosenbaum said he had been brokering the sale of kidneys for 10 years. Rosenbaum couldn’t be reached for comment. A relative of Rosenbaum who answered the phone at an address belonging to him declined to comment.
Ed Kahrer, the supervising FBI agent on the case, said the probe began in Jul 1999. The investigations using Dwek began in mid-2007. A confidential informant, independently verified as Dwek, often wore a wire and was followed by FBI agents who videotaped his encounters with the probe’s targets, federal prosecutors said in a statement. Prosecutors said the bribe-taking by public officials was connected to their fund-raising efforts in heavily contested mayoral and city-council campaigns. The bribes were often parceled out to straw donors, who wrote checks in their names or businesses to the campaigns in amounts that complied with legal limits on individual donations, prosecutors alleged. Other bribe recipients took cash for direct personal use and benefit, prosecutors said. Some of the individuals who were charged with taking bribes from Dwek didn’t win their elections.
New Jersey has been rife with political corruption for decades. Chris Christie, a Republican and former federal prosecutor, is campaigning for governor citing his long track record of winning convictions of public officials. Gov. Jon Corzine, a Democrat who is running for re-election this year against Christie, issued a statement saying: “Any corruption is unacceptable, anywhere, anytime, by anybody. The scale of corruption we’re seeing as this unfolds is simply outrageous and cannot be tolerated.” Corzine ran four years ago promising to quash corruption in the state. A package of proposed legislative fixes have been held up in the legislature and he has been subject to withering criticism by voters who say he failed to act on his promise. In a move that appears to be related to the investigation, Corzine said he asked for and received the resignation of Joseph V. Doria Jr., his commissioner of community affairs. A former state Assembly speaker, Doria had purview over local-government services. He also has been leading the state Redevelopment Authority and the state Housing and Mortgage Finance Agency. Doria served as mayor of Bayonne, which lies just to the south of Jersey City, for nine years.
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Posted by niqnaq
Posted by niqnaq