At 6am last Thursday, more than 200 FBI and IRS agents fanned out across the state of New Jersey, as part of that corruption and money-laundering probe that ended up netting 44 people, including mayors, rabbis, and a state lawmaker.
Now that the dust has settled, it’s worth taking a look at the whole sprawling operation.The story (sub. req.) starts with a 36-year-old real-estate investor and philanthropist named Solomon Dwek. Dwek, a member of the tight-knit Syrian-Jewish community of Deal, New Jersey, used family connections — his father is a prominent local rabbi — to win investors’ trust and build a real-estate fortune whose value at one time approached $500 million.
But at some point, Dwek appears to have taken out more loans than he could pay back. In 2006, in an effort to pay back his creditors, he allegedly deposited a $25 million check at PNC Bank, which was not backed by funds. He was charged with defrauding the bank out of $25 million.
But Dwek was never officially indicted. And that appears to be because he proved
such an able government informant. In 2007, the FBI began using Dwek to wear a wire while offering to bribe New Jersey mayors and public officials — part of a wide-ranging probe of corruption in the Garden State that had been underway since 1999. Dwek’s undercover work was the key to last week’s mass arrests.
Those arrests, and subsequent charges, can be divided into two categories — public corruption and money laundering.
The former netted 29 of the 44 people arrested, including Peter Cammarano III and Dennis Elwell, the mayors of Hoboken and Secaucus, and Leona Beldini, the deputy mayor of Jersey City, all Democrats; as well as state Assemblyman Daniel Van Pelt, a Republican. Much of the alleged corruption was said to be tied to election fundraising efforts.
Cammarano, who only took over as mayor on July 1, was charged with accepting $25,000 in cash bribes from Dwek in return for promising support for zoning changes for a high-rise Dwek said he wanted to build, while Cammarano was a mayoral candidate. Cammarano told Dwek: “You can put your faith in me” and “you’re gonna be treated like a friend,” according to the complaint.
Elwell and Van Pelt allegedly took $10,000 as part of similar schemes. Beldini, say the Feds, took $20,000 in campaign contributions.
And Dwek gave another person a box of Apple Jacks cereal containing $97,000 in cash, say prosecutors.
For it’s part, the money-laundering probe swept up 15 people, including Issac Rosenbaum, the Brooklyn man we told you about last week who was charged with trafficking in human kidneys, after Dwek approached him claiming that his uncle needed a new kidney.
In most of the money-laundering cases, Dwek approached rabbis and schemed with them to launder money through the rabbis’ religious charities, with the rabbis taking a percentage. Prosecutors say Dwek told the rabbis that the money came from illegal activities — bank fraud and the sale of counterfeit goods, including Prada and Gucci handbags. One rabbi in Deal allegedly laundered $50,000 for Dwek, and took a 10 percent fee.
One person for whom the arrests are bad news is Jon Corzine, the state’s Democratic governor. Corzine had come into office in 2005 promising to clean up the state’s famously corrupt politics, but he trails Republican Chris Christie — a former US attorney for New Jersey — in his reelection bid. Corzine’s Community Affairs Commissioner, Joe Doria, stepped down Friday after his house was searched as part of the probe.
Christie was U.S. attorney for the district of New Jersey while the corruption investigation was ongoing, though he resigned last year to run for governor.