Hoboken Mayor In NJ Corruption Sweep

July 24, 2009 6:39 a.m. EDT

THE WALL STREET JOURNAL

Jersey Mayors Stung In Graft Probe By AMIR EFRATI, SUZANNE SATALINE AND DIONNE SEARCEY From THE WALL STREET JOURNAL New Jersey has never been short of corruption scandals, but the one that unfolded yesterday was surprising even by the standards of the state that inspired "The Sopranos." Federal agents swept across New Jersey and New York on Thursday, charging 44 people -- including mayors, rabbis and even one alleged trafficker in human kidneys -- in a decadelong investigation into public corruption and international money laundering. The key to the investigation: a real-estate developer who became an informant after being arrested on bank-fraud charges in 2006, according to a person familiar with the case. The developer, Solomon Dwek, wore a wire for the Federal Bureau of Investigation while offering to bribe New Jersey mayors and other public officials, that person said. A lawyer for Mr. Dwek didn't respond to requests for comment. While the state has a long history of dirty politics -- in Newark alone, three ex-mayors have been convicted of crimes unrelated to the latest sweep -- the scale of the allegations shocked veterans of New Jersey's political crises. "This is not only a black eye, but this fans more cynicism," said Gene Grabowski, a crisis manager who has represented New Jersey clients in graft probes. "It validates this idea that New Jersey is a setting for "The Sopranos.'" Court documents read like a pulp crime novel. At one point, Mr. Dwek (described as a "cooperating witness' in criminal complaints) is quoted saying to an alleged money-launderer: "I have at least $100,000 a month coming from money I "schnookied" from banks for bad loans." Another time, Mr. Dwek gave one of the alleged co-conspirators a box of Apple Jacks cereal stuffed with $97,000 cash, the documents say. The arrests in the public-corruption portion of the probe included the Democratic mayors of Hoboken and Secaucus, Peter Cammarano III and Dennis Elwell; Republican state Assemblyman Daniel Van Pelt; and Democrat Leona Beldini, the deputy mayor of Jersey City. A woman who picked up the phone at Mr. Van Pelt's office said, "Mr. Van Pelt was arrested today and is out of the office." His lawyer declined to comment. Mr. Cammarano's lawyer said he "intends to plead innocent because he is innocent." After her court appearance, Ms. Beldini said she didn't violate taxpayers' trust and declined to comment further while leaving the courthouse. Mr. Elwell and his lawyer declined to comment. Arrests on the investigation's money-laundering side include several rabbis in New York and New Jersey, said Ralph Marra Jr., acting U.S. attorney for New Jersey. The arrestees appeared in federal court in New Jersey Thursday afternoon. Corruption among the politicians was "a way of life," Mr. Marra said. "They existed in an ethics-free zone." The probe includes a bizarre sideshow: the alleged trafficking of human kidneys, a lucrative, illegal industry and not one that's typically showcased alongside political shenanigans. In the course of the investigation last year, Mr. Dwek came into contact with an alleged organ trafficker, Levy Izhak Rosenbaum, and told him Mr. Dwek's uncle needed a new kidney, according to court papers. The two men discussed how Mr. Dwek would pay a $160,000 fee to buy a kidney from a donor in Israel, documents show. According to the complaint, Mr. Rosenbaum described himself as a "matchmaker." Mr. Rosenbaum couldn't be reached for comment. A person who answered the phone at his residence declined to comment. This federal investigation grew out of two previous cases and dates back to 1999, according to the FBI. It culminated at 6 a.m. Thursday with more than 200 FBI and Internal Revenue Service agents making arrests and executing search warrants throughout the state, said Weysan Dun, special agent in charge of the FBI's Newark office. In all, 29 people were caught up in the public-corruption part of the probe. Fifteen were implicated in the investigation into money laundering, including Mr. Rosenbaum, who was charged with conspiring to broker the sale of a kidney. Court documents quote a number of incriminating wiretap recordings involving New Jersey politicians -- some prominent names, others known only in their small communities. For example, according to court documents, on April 27, FBI agents caught an incoming call from former Jersey City council candidate Guy Catrillo to a consultant's cellphone. The consultant asked Mr. Catrillo: "Did you get the money from [Mr. Dwek] when we saw him the other day?" Mr. Catrillo replied: "Yeah, I took care of that. Yeah." Mr. Catrillo's office didn't answer the phone Thursday. Mr. Dwek, a 36-year-old religious-school head and philanthropist from Monmouth County, N.J., was at the heart of the investigation. He began his career as a small-time real-estate developer whose investors included friends and relatives in the Syrian Jewish community. Three years ago he was charged with defrauding PNC Bank of $25 million and remained free on a $10 million bond. In 2007, Mr. Dwek began working for the FBI, wearing a wire and being trailed by FBI agents who videotaped his encounters with targets of their probe, according to someone familiar with the matter and information in the complaints. Prosecutors said the alleged bribe-taking was often tied to election fund-raising efforts. Other recipients took cash for direct personal use, prosecutors allege. In the case involving Mr. Cammarano, who became Hoboken mayor on July 1, he was charged with accepting $25,000 in cash bribes from Mr. Dwek in return for promising support for zoning changes for a high-rise Mr. Dwek said he wanted to build. Mr. Cammarano is so new to the mayor's job that an events poster outside his office still lists the name of the previous mayor, David Roberts, on it. The alleged bribes occurred during the 32-year-old Mr. Cammarano's mayoral campaign earlier this year, according to the FBI's complaint. According to the compliant, Mr. Cammarano assured Mr. Dwek, that "[y]ou can put your faith in me" and that "I promise you ... you're gonna be, you're gonna be treated like a friend." Supporters of the mayor expressed dismay at the charges. "This was a charismatic guy who we thought could get us past all this stuff," said Jay Rose, a 27-year resident of Hoboken who voted for Mr. Cammarano. "It looks like we're back to square one." In the FBI money-laundering probe, Mr. Dwek represented himself as someone who engaged in various illegal businesses, including bank fraud and counterfeiting of women's handbags. "Business is very good. Prada, Gucci, boom, boom, boom," Mr. Dwek boasted at one point, according to court papers. The alleged money-laundering operations -- most of them run by rabbis as religious charity organizations -- laundered about $3 million for Mr. Dwek in his capacity as a cooperating witness since June 2007, according to the court documents and a person familiar with the matter. Mr. Dwek likely will receive credit from federal prosecutors for his cooperation. The prosecutors allege that the rabbis used nonprofit organizations connected to their synagogues to launder money they understood came from criminal activity. In 2007 Eliahu Ben Haim, principal rabbi of Congregation Ohel Yaacob, a synagogue located in the New Jersey shore community of Deal, accepted a $50,000 check from Mr. Dwek, which was drawn from an account held by a phony company set up by the FBI for Mr. Dwek to help facilitate the investigation, according to the complaint. The check was made payable to one of Mr. Ben Haim's charitable organizations with the expectation that the proceeds would eventually be returned to Mr. Dwek, documents indicate; Mr. Ben Haim, who was charged with money laundering on Thursday, was to take a 10% fee. A woman who answered the phone at Ohel Yaacob Congregation in Deal said, "I don't have anything to say." Michael O'Donnell, Mr. Ben Haim's lawyer, declined to comment. The arrests place an added burden on Gov. Jon Corzine, a Democrat in his first term who is running for re-election this year. Mr. Corzine ran four years ago promising to quash corruption. "The scale of corruption we're seeing as this unfolds is simply outrageous and cannot be tolerated," he said in a statement. In Hoboken, a city of just less than 40,000, city-clerk employees at the municipal building huddled around a small television to watch the news conference announcing the charges. Some residents there said they weren't so surprised. "It happens everywhere in New Jersey," said James Goggin, a Hoboken resident. "I'll tell you one thing -- it never gets boring here. But sometimes I wish it would." --- Chad Bray, Robert Copeland, Chris Herring, Lucette Lagnado, Barbara Martinez and Steven Russolillo contributed to this report.