N.J. Corruption Case Snags Mayors, Assemblyman and Rabbis

Three New Jersey Mayors, two Assemblyman and five rabbis were arrested this week following a two year federal corruption and money laundering investigation.

A two-year corruption and international money-laundering investigation stretching from the Jersey Shore to Brooklyn to Israel and Switzerland culminated in charges against 44 people on Thursday, including three New Jersey mayors, two state assemblymen and five rabbis, the authorities said.

The case began with bank fraud charges against a member of an insular Syrian Jewish enclave centered in a seaside town. But when that man became a federal informant and posed as a crooked real estate developer offering cash bribes to obtain government approvals, it mushroomed into a political scandal that could rival any of the most explosive and sleazy episodes in New Jersey’s recent past.

It was replete with tales of the illegal sales of body parts; of furtive negotiations in diners, parking lots and boiler rooms; of nervous jokes about “patting down” a man who turned out to indeed be an informant; and, again and again, of the passing of cash — once in a box of Apple Jacks cereal stuffed with $97,000.

....Even veteran political observers were taken aback by the scope of the investigation. The mayors of Hoboken, Secaucus and Ridgefield were among those arrested.

The Feds are distinguishing between two types of crimes:

The authorities laid out two separate schemes, one involving money laundering that led to rabbis and members of the Syrian Jewish community in Brooklyn and in the Jersey Shore town of Deal, where many of them have summer homes. The other dealt with political corruption and bribery and involved public officials mostly in Jersey City and Hoboken, where the pace of development has been particularly intense in recent years.

Linking the two schemes was the federal informant who was not named in court papers but whom people involved with the investigation identified 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.

Some details of the alleged scam and real estate developer-turned-informant Dwek:

Early on, Mr. Dwek helped investigators penetrate an extensive network of money laundering that involved rabbis in the Flatbush section of Brooklyn, where the Syrian Jewish community is based, and in Deal and Elberon, towns on the Jersey Shore.

Mr. Dwek, a well-known member of the Syrian Jewish community whose parents founded the Deal Yeshiva, never concealed that he was facing bank fraud charges, instead telling targets, who included three rabbis in Brooklyn and two in New Jersey, that he was bankrupt and trying to conceal his assets, according to people involved in the case. The targets, in turn, accepted bank checks Mr. Dwek made out to charities that they oversaw, deducted a fee, and returned the rest to him in cash.

Much of the cash they provided him came from Israel, and some of that in turn came from a Swiss banker, prosecutors said. All told, some $3 million was laundered for Mr. Dwek since June 2007, prosecutors said.

On to the Rabbis arrested:

In the money laundering scheme, the rabbis arrested included Saul J. Kassin, 87, a leader of the Syrian Jewish community in Brooklyn and New Jersey; Mordchai Fish and Lavel Schwartz, both rabbis in Brooklyn; and Eliahu Ben Haim and Edmund Nahum, who lead congregations in Deal.
Some of the allegations are gruesome:
Another man in Brooklyn, Levy-Izhak Rosenbaum, was accused of enticing vulnerable people to give up a kidney for $10,000 and then selling the organ for $160,000. Mr. Dwek pretended to be soliciting a kidney on behalf of someone and Mr. Rosenbaum said that he had been in business of buying organs for years, according to the complaint.

Here's a chart showing how the case unfolded. Among the public officials arrested were:

"Mayor Peter J. Cammarano III of Hoboken, who was a City Council member before he took office as mayor on July 1, and Mayor Dennis Elwell of Secaucus, both Democrats; Assemblyman L. Harvey Smith of Jersey City, also a Democrat; and Assemblyman Daniel M. Van Pelt, a Republican from Ocean County."

Here's the story of the Informant, Solomon Dwek. How did the people of Deal react to his arrest?

The arrests seemed to be the focus of every conversation in Deal on Thursday. Some people defended the rabbis who were arrested; others spoke of broken trust. “They don’t know what to believe,” said one resident, one of many who refused to give their names.
Dwek was also a philanthropist:
Yet even as Mr. Dwek was accused of stealing or mismanaging millions of dollars, he was apparently giving away plenty. One beneficiary was the Lumia Theater in Long Branch, home of the New Jersey Repertory Company, which once included the 50-seat Pearl and Solomon Dwek Little Theater, named for Mr. Dwek and his wife.

He helped his sister start a yeshiva, and he aided families and students who could not pay their bills. “Before his empire came tumbling down,” said the person who said he knows the family, “he was giving more and more of it away.”

More on Dwek here. As to the population in general:

Deal boasts a significant population of Orthodox Sephardic Jews, mainly of Syrian extraction. In the 2000 Census, 16.4% of Deal residents identified as being of Syrian heritage, the greatest percentage of Syrian Americans in any municipality in the country.[8] Deal's population swells to over 6,000 during the summer, many of them Syrian Jews.

Deal has always interested me as I had some good friends many years ago who were part of the Syrian Jewish community in Deal. While they were not from New Jersey, they grew up spending every summer in Deal and as adults, took their own children there. From their stories, it was pretty ritzy back then (I've never been so I don't know if it's changed.)

Here's the latest from the New York Times on Hoboken Mayor Peter Cammarano's fall from from a mayor who ran as a reformer to a defendant.

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  • Display: Sort:
    It Is a Movie Script (5.00 / 1) (#1)
    by squeaky on Sat Jul 25, 2009 at 11:12:48 PM EST
    This is an entertaining take from native NJer.

    "I'm From New Jersey" (none / 0) (#14)
    by Peter G on Sun Jul 26, 2009 at 10:11:45 PM EST
    "I don't expect too much."  Performed by the songwriter, John Gorka.  So am I.

    Thanks Peter G (none / 0) (#15)
    by squeaky on Mon Jul 27, 2009 at 02:48:04 AM EST
    I really enjoyed that.

    Something I learned early (none / 0) (#17)
    by sarcastic unnamed one on Mon Jul 27, 2009 at 12:49:34 PM EST
    growing up in NJ:
    what was really shocking about the reported payoffs was that the prices were so low. This was penny ante stuff.

    A terrible shame (5.00 / 1) (#3)
    by Mikeb302000 on Sun Jul 26, 2009 at 02:02:44 AM EST
    I'm afraid the fallout from this will hurt Gov. Corzine who is one of the heroes of the gun control movement. As progressive as my former state has been on gun control and capital punishment, they certainly do have their share of problems with corruption and inner city turmoil.

    Good luck to them.

    I'm always relieved (5.00 / 1) (#4)
    by Fabian on Sun Jul 26, 2009 at 04:19:54 AM EST
    to see stories like this.

    The only thing worse than having your city or state officials prosecuted for corruption is having them not prosecuted and let the corruption continue and grow.

    The Cleveland area has its own problems.  One government official essentially asked for a bribe to "make sure" one contractor got a lucrative job.  He also suggested that the contractor just add the bribe to their bid.  Yup.  Straight from the taxpayers' pockets to his!  More subtle and elegant than being mugged, but a thief is a thief is a thief.


    Corruption is so rife in NJ ... (5.00 / 1) (#5)
    by Robot Porter on Sun Jul 26, 2009 at 07:14:10 AM EST
    that calling this the tip of the iceberg is an insult to tips and icebergs everywhere.

    In fact, political reporters in NJ have a range of euphemisms and catchphrases just to discuss politics in the state.


    Charitable crook? (5.00 / 1) (#9)
    by Fabian on Sun Jul 26, 2009 at 08:38:00 AM EST
    We've seen it before.  Tom Noe used his embezzled money to donate generously to community charities.  He had supported some charities before he came into the government contracts, but after he had access to government money, he became even more generous.

    Do they see themselves as Robin Hoods - giving stolen money to the deserving?  

    Base building (none / 0) (#16)
    by Abdul Abulbul Amir on Mon Jul 27, 2009 at 08:51:52 AM EST

    They are buyng votes.  How they see themselves is beside the point.

    FYI: Ashbury Park Press minisite on Solomon Dwek (none / 0) (#2)
    by polizeros on Sun Jul 26, 2009 at 01:43:19 AM EST
    what I don't fully understand about this is: (none / 0) (#8)
    by DFLer on Sun Jul 26, 2009 at 08:18:18 AM EST
    Was this a pre-existing fraud ring that was then busted with the help of Dwek, or were all these scams a result of a sting op by the cops and Dwek?

    The gist of the answer is "both" (5.00 / 3) (#10)
    by scribe on Sun Jul 26, 2009 at 11:18:24 AM EST
    In short, Dwek was busted for depositing a $25 million check (at the drive-through) which ultimately bounced, and writing/drawing about $23 million against it.  

    The feds had him and frankly, with Madoff (and before that Adelphia, Scrushy and so on) being used as the measuring stick financial sentences, he could have gone away forever.  So, being a life-long dealmaker, he made a deal.  He had been doing real estate, so keep that and his dealmaker history in the back of your mind until later.

    Dwek's status as "charged with a crime" was no secret in the close-knit and insular community.  He knew who was and who was not allegedly crooked and, when he needed to do something crooked (like, "I'm in bankruptcy and have stuff I want to hide.  Will you help me by laundering this money?") he knew who to talk to.  

    That led to the money-laundering aspect of it, almost all of which was intra-Jewish community.

    Along the way of money-laundering, he got introduced to both the guys with the knockoff goods and the guy who brokered kidneys.  Basically, the same community, but maybe some new guys.

    Probably as much to keep his cover as a real estate macher going as anything (he was in trouble but still working, yadda, yadda), but also because Hudson County is forever a screwed-up place where corruption is a way of life*, Dwek moved into looking to do real estate development in Jersey City and Hoboken.  I have little doubt that he could have found the same kind of corruption closer to home in Monmouth and Ocean counties but one has to remember that at the time (2006-2007) he started moving north, (a) Hudson County was still in the real estate boom with new projects getting started and (b) Chris Christie was still US Attorney, Democrats outnumber Republicans 5-1 in Hudson County, and Corzine and Menendez (two of Christie's biggest targets) are both from Hudson county.  Indeed, both of them live in Hoboken.  I am told that, until recently, they both lived in the same building.  Christe was nothing if not a loyal Bushie, targeting Democrats for corruption investigations almost exclusively.  So, I can see a big informant like Dwek being pointed toward Hudson county.

    One also has to understand the geography of Hudson county.  It's almost entirely built-up.  Solid city from boundary to boundary.  All the development going on there is really re-development.  A lot of the sites are formerly industrial, so there is always the possibility of needing a cleanup.  Costs are higher, if only because the "tight" nature of sites makes maneuvering construction equipment and material a lot more difficult.  And, of course, there's greed.  So, to make a profit off a deal, one has to build to the maximum density one can get on every single site.  

    These towns all have zoning which severely restricts height, density and lot coverage.  To make a profit, it often seems or is necessary to get variances from the zoning - the property owners price the land such that you almost can't make a profit without them.  And, by their nature, variances are discretionary on the part of government officials ... members of zoning boards appointed by ... politicians. Those board members are unpaid volunteers and hear these cases in the evening hours they are taking from their families to be good citizens.  As pretty much anywhere, the hearings go late into the evening - 11 or midnight - and an adjournment can result in a delay of literally months.

    Even if an application were guaranteed to be approved, the timing of when an application gets heard and decided can be vital to a deal succeeding.  While the recent declines in the real estate market have been sharp enough for homeowners, imagine you were a developer whose project has been held up waiting on a board to hear the application.  You are carrying the cost of the property and everything else waiting on a volunteer board to get around to hearing you.  

    So, getting to the head of the line and getting heard expeditiously is vital.

    Also, the political culture of Hudson county is sui generis.  There are still literal political clubhouses run and devoted to a particular person.  The deployment of street workers before, during and after elections is enormous.  Not all of them are volunteers - a lot are people picking up a hundred here or there in street money from campaigns.  Candidacies cost a lot of money here.

    In any event, the story goes that after a few introductions and some meetings, Dwek starts meeting with officials in Jersey City, seeking to get some promises of expedition in projects he would be bringing before that city, and spreading money around to both officials and candidates.

    Then, as the story goes, Dwek spreads out into Hoboken.  The mayoral election this year had three candidates.  One was knocked out in the first election in May, and the winner selected in the runoff in June.  The local weekly paper there reports (you will love the lede) that not only did Dwek meet with (and allegedly pass money to) Cammarano, the new mayor, but he also met with the candidate knocked out in the first round (Mason) and sought to meet with the candidate who lost the runoff (Zimmer).  According to the local paper, Mason and an aide met Dwek at a diner, heard what he was looking to do (trade contributions for priority on development approvals), and Mason told him to go to hell.  It never even got to the point of a meeting between Dwek and Zimmer, because Zimmer was the "anti-development" candidate in the race and, so the story tells us, this was made so clear to Dwek in the initial phone call from him that he never bothered to try to go further.

    So, as a snitch, he was looking to ensnare anyone and everyone.  I think the term "Stakhanovite" would apply.  But, in the end, this mammoth case is a case made on the testimony of one snitch, though admittedly caught on tape.  He had a lot to work off for the feds, and worked at it.

    BTW - it's been years since I've been to Deal, NJ, but I recall it as one of the most beautiful shore towns anywhere.  It's all big houses backing up to the beach, not tacky-tawdry at all.


    *  By way of example, Jersey City once had a mayor who held the job until someone found out he was not a citizen and, arguably, in the country illegally.  Back then, the penalties were not as severe as they are now, so AFAIK, he never had to leave the country.  But I'm told it took a huge fight to get him to leave office.  There's a street named after him there, to this day.


    Drive Through (none / 0) (#11)
    by squeaky on Sun Jul 26, 2009 at 02:20:41 PM EST
    I can see the whole scene. It will be one of the many great moments of hilarious dramatic irony in the movie.  

    This story makes fiction look like technical writing, imo.


    Speaking from experience, I can say (5.00 / 1) (#12)
    by scribe on Sun Jul 26, 2009 at 09:02:09 PM EST
    that depositing a large check at a drive-through window is always an amusing gambit.

    Back about 20 years ago, in my first legal job as a first-year associate, I was sent into The City to effect the signing of some settlement checks.  Our client had been working on repairs/improvements at some oil refinery and there had been a dispute over the contract.  In any event, they were going to be getting a million plus, even after we (rather, my boss) got our (his) cut.  

    So, I go in to their offices, get their signature on the million-six or so check and then get in my beat-up, scratched-up, smokes a little 100k-plus-miles Colt with a bumper dented against the body by a NYC cabbie hitting and running on one of the Avenues.  I drive out into the burbs where my boss then had his office and, more importantly, bank accounts, and pull up to the drive-up.  I was feeling like a bit of a cock-of-the-walk and figured I'd do it at the drive-through just to see the reactions.  

    I got a couple double takes when they looked at the check, looked at the car (I smiled innocently), looked back at the check, looked back at the car, and then deposited it.

    Still LMAO all these years later.

    BTW, go back and read the lede in the one linked article:

    July 15 - Mayor Cammarano declares zero tolerance for corruption and bad behavior.
    July 16 - (Allegedly) Mayor Cammarano picks up $10k from Dwek at a diner.


    Hilarious Story (none / 0) (#13)
    by squeaky on Sun Jul 26, 2009 at 09:26:38 PM EST
    Would of loved to see their faces.. lol

    Ah pols will be pols.. The good mayor included