Huge corruption probe in New Jersey leads to arrests of 44 people
7/24/2009NEWARK - An investigation into the sale of black-market kidneys and fake Gucci handbags evolved into a sweeping probe of political corruption in New Jersey, ensnaring more than 40 people yesterday, including three mayors, two state lawmakers, and several rabbis.
Even for a state with a rich history of graft, the scale of wrongdoing alleged was breathtaking.
"This is so massive," said Joseph Marbach, a political scientist at Seton Hall, who called it the biggest sting operation he could remember in the state. "It's going to just reinforce the stereotype of New Jersey politics and corruption. While we thought we were cleaning up New Jersey, it just shows how much more needs to be done."
"For these defendants, corruption was a way of life," said Ralph J. Marra, Jr., the acting U.S. attorney in New Jersey. "They existed in an ethics-free zone."
Authorities laid out two separate schemes, one involving money laundering that led to rabbis and members of the Syrian Jewish community in Brooklyn, N.Y., and in the Jersey Shore town of Deal where many of them havesummer homes. The other dealt with political corruption and bribery and involved public officials mostly in Hudson County towns where the pace of development has been particularly intense in recent years.
The money laundering network is alleged to have laundered tens of millions of dollars through Jewish charities controlled by rabbis in New York and New Jersey.
Prosecutors then used an informant to help them go after corrupt politicians. The informant - a real estate developer charged with bank fraud three years ago - posed as a crooked businessman and paid a string of public officials tens of thousands of dollars in bribes to get approvals for projects in New Jersey, authorities said.
Among the 44 people arrested were the mayors of Hoboken, Ridgefield, and Secaucus, Jersey City's deputy mayor, and two state assemblymen. A member of the governor's cabinet resigned after agents searched his home, though he was not arrested. All but one of the officeholders are Democrats.
Also, five rabbis from New York and New Jersey - two of whom lead congregations in Deal - were accused of laundering millions of dollars, some of it from the sale of counterfeit goods and bankruptcy fraud, authorities said.
Others arrested included building and fire inspectors, city planning officials, and utilities officials, all accused of using their positions to further the corruption.
FBI and IRS agents raided a synagogue yesterday morning in Deal, a wealthy oceanfront city of Mediterranean-style mansions, with a large population of Syrian Jews.
Those arrested include Levy Izhak Rosenbaum of Brooklyn, who was charged with conspiring to arrange the sale of an Israeli citizen's kidney for $160,000 for a transplant for the informant's fictitious uncle. Rabbi Rosenbaum was quoted as saying he had arranged the sale of kidneys for 10 years.
The politicians arrested were not accused of any involvement in the money laundering or the trafficking in human organs and counterfeit handbags.
The number of arrests was remarkable even for New Jersey, where more than 130 public officials have pleaded guilty or have been convicted of corruption since 2001.
"New Jersey's corruption problem is one of the worst, if not the worst, in the nation," said Ed Kahrer, who heads the FBI's white-collar and public corruption division. "Corruption is a cancer that is destroying the core values of this state."
Gov. Jon Corzine said: "The scale of corruption we're seeing as this unfolds is simply outrageous and cannot be tolerated."
Hours after FBI agents seized documents from his home and office, New Jersey Community Affairs Commissioner Joseph Doria resigned. Federal officials would not say whether he would be charged. Mr. Doria did not return calls for comment.
Authorities did not identify the informant, but people involved with the investigation identified him as Solomon Dwek, a failed real estate developer and philanthropist who was arrested in May, 2006, on charges of passing a bad
$25 million check at a bank in Monmouth County, N.J.
Mr. Dwek's lawyer did not immediately return a call for comment.
Michael Bachner, representing Brooklyn Rabbi Mordchai Fish, said, "Our belief is that Mr. Dwek used his closeness and the sterling reputation of his family to manipulate individuals who trusted that he would never be involved in illegal conduct."
Most of the defendants facing corruption charges were released on bail. The money-laundering defendants faced bail between $300,000 and $3 million, and most were ordered to submit to electronic monitoring.
Among those ensnared by the informant was Hoboken Mayor Peter Cammarano III, prosecutors said. Mr. Cammarano, 32, who won a runoff election last month, was accused of accepting money from the developer at a Hoboken diner.
"There's the people who were with us, and that's you guys," the complaint quotes Mr. Cammarano saying. "There's the people who climbed on board in the runoff. They can get in line. ... And then there are the people who were against us the whole way. ... They get ground into powder."
Mr. Cammarano's attorney Joseph Hayden said his client is "innocent of these charges. He intends to fight them with all his strength until he proves his innocence."
Mr. Cammarano was accused of accepting $25,000 in cash bribes. Secaucus Mayor Dennis Elwell was charged with taking $10,000. Ridgefield Mayor Anthony Suarez was charged with agreeing to accept an illegal $10,000.
Jersey City Deputy Mayor Leona Beldini was charged with conspiracy to commit extortion by taking $20,000 in illegal campaign contributions. State Assemblymen Daniel Van Pelt and L. Harvey Smith also were accused of taking payoffs.