Friday, July 24, 2009
Massive N.J. corruption sting targets mayors, legislators, rabbis
NEWARK -- The bribes went down in diners, living rooms and parking lots. New Jersey Assemblymen took them, mayors took them, and so did dozens of others.
Orthodox rabbis, acting more like crime bosses than religious leaders, laundered millions through synagogues and yeshivas in Deal, one of the state's wealthiest towns. And a Realtor tried to sell an informant a black market kidney for $160,000.
Those were some of the allegations federal prosecutors made today in what could prove to be the biggest New Jersey scandal of them all.
The revelations came after hundreds of federal agents swept across the state, arresting public servants and religious leaders as part of a two-year investigation into corruption and international money-laundering that authorities described as unprecedented - even in a state known its scandals.
Full Star-Ledger coverage of the New Jersey corruption arrests
It was a sting operation that could have been taken from the pages of an Elmore Leonard novel: the FBI and IRS agents arrested five rabbis, two New Jersey state legislators, three mayors, political operatives, and many others, as part of a probe that spanned from Hoboken to Israel.
Other records were taken from Saint Peter's College in Jersey City and from at least one synagogue in Deal. Meanwhile, a top member of the Corzine administration unexpectedly resigned after agents arrived at his home and office with evidence boxes.
The arrests were the result of two separate investigations that used the same informant, a man who moved easily between the world of the rabbis and the world of Jersey politics. The rabbis are charged with operating money laundering network by funneling cash through yeshivas and non-profit organizations they were associated with. The politicians are accused of taking outright bribes in exchange for favors.
Mahala Gaylord/The Star-Ledger
Ralph J. Marra, Jr., acting U.S. Attorney answers questions at a press conference in Newark addressing the federal investigation of public corruption in which 44 individuals were charged today.And at the center of it all was an unnamed informant who sources and defendants later identified as Solomon Dwek - once a high-flying Monmouth County developer and son of a prominent Monmouth County rabbi who remains on bail for a 2006 bank fraud case that has never come to trial. Dwek , according to the federal complaint, secretly taped those targeted in the investigation for more than two years.
Prosecutors said the case began when the informant infiltrated an existing international money laundering network being run by a group of rabbis in New York and New Jersey. It then expanded into a public corruption case through a middleman who moved in both worlds, officials said.
Some of the bribes to elected officials were paid through political contributions, the complaint said, often through "straw" donors who wrote checks in their names or businesses to comply with campaign finance regulations.
Acting U.S. Attorney Ralph Marra Jr. said the arrests underscored the continuing pervasiveness of public corruption in New Jersey, where more than 130 public officials have been prosecuted in recent years.
"For these defendants, corruption was a way of life," Marra said. "They existed in an ethics free zone. And they exploited giant loopholes in the state's campaign contribution rules."
Among those charged included newly elected Hoboken Mayor Peter Cammarano, 32, and rabbi Saul Kassin, the 87-year-old spiritual leader of the close-knit Syrian Sephardic Jewish community in Deal and Brooklyn. Others were Secaucus Mayor Dennis Elwell, 64; Anthony Suarez, 42, the mayor of Ridgefield; Leona Beldini, 74, the Jersey City deputy mayor; Assemblymen L. Harvey Smith (D-Hudson), 60 and Daniel Van Pelt (R-Ocean), 44; rabbi Edmund Nahum, 56, of Deal; and rabbi Eliahu Ben Haim, 58, of Long Branch. In all, 44 people were charged, 29 of them from New Jersey.
The case had immediate political ramifications, particularly for Democrats in Hudson County and the administration of Gov. Jon Corzine. By the end of the day, Joe Doria Jr., the Commissioner of the Department of Community Affairs, abruptly resigned from his cabinet post after his Trenton office and his home in Bayonne were searched by the FBI.
The team of agents who arrived at Doria's 8th floor office at 9:30 a.m. left hours later with several boxes they loaded into a beige car. They declined to comment. Doria missed a meeting with mayors and others on municipal shared services and consolidations earlier today and was not seen at the office all day. He has not been charged.
Smith and Van Pelt were both asked by leadership officials to resign their committee posts.
In a hastily called press conference, a grim-faced Corzine, who is running for re-election against Republican Chris Christie, the former U.S. Attorney who launched the federal investigation more than two years ago, said he was sickened to learn of the arrests.
"Any corruption is unacceptable any time, anywhere by anybody," he said, calling the scope of the corruption outrageous.
"There's no other word that fits than outrageous," he said.
Christie called for the resignation all public officials involved in the sweeping investigation.
"If you're charged with a crime and you hold public office, you should resign. Resign immediately," Christie said, addressing the media in a barber shop at what was to have been a campaign block walk along a West New York street. He called the arrests "just another really tragic day for the people of New Jersey."
Weysan Dun, head of the FBI's Newark office, called the case unprecedented in its scope.
"The fact that we arrested a number of rabbis this morning does not make this a religiously motivated case. Nor does the fact that we arrested political figures make this a politically motivated case," he said. "This case is not about politics. It is certainly not about religion. It is about crime and corruption."
In the charging documents, the single informant is named only as a "cooperating witness." Officials would not identify him, but several sources with knowledge of the investigation separately confirmed that it was Dwek, who was indicted in May 2006 for a $50 million bank fraud.
According to court documents, Dwek was accused of depositing a bogus $25 million check at the PNC Bank in Eatontown and spending $22 million of it before he was caught. He then tried to deposit a second bogus $25 million check at a different PNC branch before he was confronted.
That case is still pending. His criminal defense attorney did not return calls to his office.
The brazenness of the intertwined schemes played out in stark language, captured by hundreds of hours of hidden surveillance tapes recorded by the FBI.
In May, for example, Cammarano sat down at a Hoboken diner, talking about a $5,000 payment with the informant, who portrayed himself as a big-spending developer willing to pay cash to grease the way for building approvals. During the meeting, Cammarano discussed the prospects of winning the June 9 runoff election.
"Right now, the Italians, the Hispanics, the seniors are locked down. Nothing can change that now... I could be, uh, indicted, and I'm still gonna win 85 to 95 percent of those populations," Cammarano declared.
When the informant told him he would pay another $5,000 cash for help with development approvals, Cammarano replied: "Beautiful," according to the criminal complaint.
Cammarano is charged with accepting $25,000 in cash bribes, including $10,000 as late as last Thursday.
At a restaurant in Staten Island, the same informant met with Smith, the Democratic Assemblyman and a three-term Jersey City councilman, and an unnamed city official, seeking help expediting an anticipated zoning change. After Smith briefly left the table, the informant, carrying a courier envelope stuffed with $5,000, asked the unnamed official, "So what are we going to do? Give it to him after?"
He replied, "Give it to me and I'll have to give it to him."
"But the guy understands I'm looking to get expedited?"
"Oh yeah," assured the official.
Smith is charged with conspiracy to commit extortion.
The same informant allegedly used his long-time connections within the large Syrian Jewish enclave in Deal and others to launder $3 million in checks between June 2007 and July of this year. Meeting with some of the community's most respected religious leaders, he laid out a scheme to exchange cash and assets he wanted to conceal in bankruptcy, by giving the money to charitable organizations headed by the rabbis, who paid it back in cash in exchange for a percentage of the "donation."
The charges note that Ben Haim, the principal rabbi of Congregation of Ohel Yaacob in Deal, would take checks ranging from tens of thousands of dollars up to $160,000 made payable to a charitable, tax-example organization associated with his synagogue, and return it in cast less a cut that was typically 10 percent.
The complaint said his source for cash was an Israeli in Israel.
Kassin, a revered figure in the Syrian Jewish community, similarly handled money exchanges, according to the complaint. In October 2007, the informant met with Kassin at his home in Brooklyn - a modest, two story brick home with a small patch of manicured grass and air conditioners in several windows - giving him a $25,000 bank check made out to one of the rabbi's charitable organizations. He said the check "is from some partnerships that I have with people where I'm not - I don't show up too much." He said he was looking to shield the money from an ongoing bankruptcy proceeding.
According to the criminal complaint, Kassin retrieved a large volume from another room and began to write out a check from his charitable organization to the informant, minus 10 percent.
Julio LaRosa, acting special agent in charge of the IRS Criminal Investigation Division, said traditional money laundering was once confined to narcotics traffickers and organized crime.
"Based on the allegations contained in today's complaints, money laundering has no boundaries," he said.
The most startling of the allegations in the myriad of criminal complaints may be the attempted sale of a human kidney. Levy Izhak Rosenbaum, 58, of Brooklyn, was charged with arranging to hook up a donor for $160,000.
Surveillance tapes show the informant met with Rosenbaum in Tinton Falls last year, looking for help for a friend's fictional uncle who had kidney disease. Rosenbaum told the informant, "Let me explain to you one thing. It's illegal to buy or sell organs. So you cannot buy it. What you do is, you're giving a compensation for the time...whatever."
Rosenbaum was recorded explaining about finding a donor in Israel and stated that "there are people over there hurting," referring to people willing to sell one of their organs. "One of the reasons it's so expensive is because you have to shmear (pay various individuals for their assistance) all the time."
He said once he had brought a willing donor to this country, "it's beyond my control, but said he took care of the donor before and after surgery.
"You have to baby-sit him like a baby because he may have a language problem, maybe not," he said.
He said he would accept cash as payment