U.S. Attorney: Two-track investigation of political corruption and international money laundering rings

Mayors, assemblymen, political operatives and rabbis among the 44 FBI arrests

The mayors of Hoboken, Secaucus and Ridgefield, the Jersey City deputy mayor and council president, two state assemblymen, numerous other public officials and political figures and five rabbis from New York and New Jersey were among 44 individuals charged Thursday in a two-track federal investigation of public corruption and a high-volume, international money laundering conspiracy, Acting U.S. Attorney Ralph J. Marra, Jr., announced.

Among those charged in criminal complaints are:

Hoboken Democratic Mayor Peter Cammarano III and an attorney, who took office July 1, charged with accepting $25,000 in cash bribes, including $10,000 last Thursday, from an undercover cooperating witness.
Assemblyman L. Harvey Smith (D-Hudson) and recent mayoral candidate in Jersey City, charged along with an aide of taking $15,000 in bribes to help get approvals from high-level state agency officials for building projects.
Assemblyman Daniel Van Pelt (R-Ocean), charged with accepting a $10,000 bribe.
Secaucus Democratic Dennis Elwell, charged with taking a $10,000 cash bribe.
Ridgefield Mayor and attorney Anthony Suarez, charged with agreeing to accept a $10,000 corrupt cash payment for his legal defense fund.
Former Assemblyman Louis Manzo (D-Hudson, a recent unsuccessful challenger in the Jersey City mayoral election and his brother and political advisor Robert Manzo, both with taking $27,500 in corrupt cash payments for use in Louis Manzo's campaign.
Jersey City Democratic Deputy Mayor Leona Beldini, and a campaign treasurer, charged with taking $20,000 in conduit campaign contributions and other self-dealing in her official capacity.
Rabbi Eliahu Ben Haim, of Long Branch, the principal rabbi of a synagogue in Deal charged with money laundering of proceeds derived from criminal activity.
Rabbi Saul Kassin, of Brooklyn, the chief rabbi of a synagogue in Brooklyn, charged with money laundering of proceeds deri ved from criminal activity.
Rabbi Edmund Nahum, of Deal, the principal rabbi of a synagogue in Deal, charged with money laundering of proceeds derived from criminal activity.
Rabbi Mordchai Fish, of Brooklyn, a rabbi at a synagogue in Brooklyn, charged with money laundering of proceeds derived from criminal activity. His brother, also a rabbi, was charged as well.

Most of the defendants were arrested early Thursday by a contingent of 600 federal agents, led by special agents of the FBI Newark Division and the Internal Revenue Service's Criminal Investigation Division.

Court-authorized search warrants were also being executed approximately 54 locations in New Jersey and New York, to recover, among other things, large sums of cash and other evidence of criminal conduct. Additionally, 28 seizure warrants were being executed against bank accounts in the names of the money laundering defendants and entities they control.

One criminal complaint charges a Brooklyn man, Levy Izhak Rosenbaum, 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 complaint, Rosenbaum said he had been brokering the sale of kidneys for 10 years.

Those charged in the public corruption investigation were scheduled to begin making appearances today in federal court in Newark Thursday before U.S. Magistrate Judge Madeline Cox Arleo.

Those charged in the money laundering investigation, are scheduled to begin making initial appearances thereafter before U.S. Magistrate Judge Mark Falk.

Federal agents, with the assistance of an unidentified cooperating witness, first infiltrated a pre-existing money laundering network that operated internationally between Brooklyn, Deal, and Israel and laundered at least tens of millions of dollars through charitable, non-profit entities controlled by rabbis in New York and New Jersey.

The cooperating witness told targets of the money laundering investigation that he was involved in illegal businesses and bank frauds. He also openly discussed with targets that he was in bankruptcy and was attempting to conceal cash and assets, and told them he wanted to launder criminal proceeds in increments ranging from tens of thousands of dollars to $150,000 or more at a time, often at the rate of several transactions per week.

According to the criminal complaints, the money laundering operations run by the rabbis laundered a total of approximately $3 million for the cooperating witness alone between about June 2007 and July 2009.

The investigation veered onto its public corruption track in July 2007 in Hudson County, where the cooperating witness represented himself to be a developer and owner of a tile business who wanted to build high rises and other projects and get public contracts in Hudson County schools.

Through an intermediary, the cooperating witness was introduced to a Jersey City building inspector who, in return for $40,000 in bribes, promised to smooth the way for approvals of the cooperating witness's building projects, according to the criminal complaints.

From there, introductions and referrals spread amongst a web of public officials, council and mayoral candidates, their operatives and associates – mostly in Hudson County, and primarily in Jersey City – who took bribes. In return, they pledged their official assistance in getting the cooperating witness's projects prioritized and approved or to steer contracts to him.

In part, the bribe-taking was connected to fund raising efforts in heavily contested mayoral and city council campaigns in Jersey City and Hoboken, and the bribes were often parceled out to straw donors, who then wrote checks in their names or businesses to the campaigns in amounts that complied with legal limits on individual donations – so-called conduit or conversion donations. Other bribe recipients took cash for direct personal use and benefit; others kept some of the cash and used the rest for political campaigns, according to the criminal complaints.

The investigation produced hundreds of hours of video and audio recordings documenting much of the money laundering and bribe-taking.

"This investigation has once again identified a corrupt network of public officials who were all too willing to take cash in exchange for promised official action," said New Jersey Acting U.S. Attorney Marra. "It seemed that everyone wanted a piece of the action. The corruption was widespread and pervasive."

In both parts of this investigation," Marra said, "respected figures in positions o f public and private trust engaged in conduct behind closed doors that belied the faces of honesty, integrity and rectitude they displayed daily to their respective constituencies."

"The list of names and titles of those arrested today (Thursday) sounds like a roster for a community leaders meeting," said Weysan Dun, special agent in charge of the FBI in Newark.

"Sadly, these prominent individuals were not in a meeting room but were in the FBI booking room this morning. We hope that our actions today will be the clarion call that prompts significant change in the way business and politics are conducted in the state of New Jersey. Those who engage in this culture of corruption should know the cross hairs of justice will continue to be focused on them."

"Traditional money laundering used to be confined to narcotics traffickers and organized crime," said Julio La Rosa, acting special agent in charge of the IRS Criminal Investigation Division. "Based on the allegations contained in today's complaints, money laundering has no boundaries and impacts every segment of our society."

The investigation is the third phase of the FBI, IRS and U.S. Attorney's Office "Bid Rig" investigations that began first in Monmouth and Ocean counties. The initial investigation became public in 2002 with the guilty plea of Ocean Township mayor Terrence Weldon, who admitted extorting cash from developers to influence approval of projects.

The second bid rig phase resulted in the arrests in February 2005 of 11 sitting and former mayors and other elected officials in Monmouth County. Those public officials took bribes from someone they believed was a contractor and money launderer seeking municipal work but who was, in fact, an undercover cooperating witness. That initial bribe is what gave rise to the public corruption portion of the investigation.

Marra credited Special Agents of the FBI's Red Bank office, under the direction of Special Agent in Charge Weysan Dun in Newark, and the IRS Criminal Investigation Division, under the direction of Acting Special Agent in Charge Julio La Rosa, for their commitment of resources and success in the bid rig cases to date. Marra also thanked the Monmouth County Prosecutor's Office under the direction of Prosecutor Luis Valentin for its assistance in the bid rig investigations.

The cases are being prosecuted by Brian Howe, deputy chief of the Special Prosecutions Unit, and Assistant U.S. Attorneys Mark McCarren, Sandra Moser and Maureen Nakly, all with the Special Prosecutions Division.

— TOM HESTER SR., NEWJERSEYNEWSROOM.COM

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