Operation Bid Rig


Operation Bid Rig

Operation Bid Rig is an ongoing, long-term investigation into political corruption in New Jersey conducted by the Federal Bureau of Investigation, the Internal Revenue Service, and the United States Attorney for the District of New Jersey since 2002. The investigation has resulted in the indictments of more than 60 public officials and politically connected individuals since its inception. In July 2009, sting operations resulted in the arrest of 44 people in New Jersey and New York, including 29 public servants and political operatives, and five orthodox rabbis from the Syrian Jewish community. A number of high-level New Jersey elected officials were arrested in the operation, including Jersey City Deputy Mayor Leona Beldini, Hoboken Mayor Peter Cammarano, Secaucus Mayor Dennis Elwell, Ridgefield Mayor Anthony R. Suarez, former Jersey City Housing Authority Commissioner and Chairwoman Lori Serrano, Jersey City Housing Authority Commissioner Edward Cheatam, Assemblyman L. Harvey Smith, Assemblyman Daniel M. Van Pelt, former Assemblyman and unsuccessful mayoral candidate Louis Manzo, and political operatives Joseph Cardwell and Jack Shaw.[1][2]

Contents

Background

Operation Bid Rig originated with investigations of public corruption among New Jersey officials in Monmouth and Ocean counties. The first phase became public in 2002 when former Ocean Township mayor Terrance D. Weldon pleaded guilty to extorting cash from developers to influence the approval of building projects. The second phase of the investigation resulted in the February 2005 arrests of 11 elected officials in Monmouth County, who were charged with taking bribes from an undercover cooperating witness.[3]

Operation Bid Rig II

The second phase of the investigation was conducted in 2003 and 2004. Robert "Duke" Steffer, a former developer in New Jersey and Florida, solicited public officials for projects for his company, Steffer Industries Inc., which was later found to be a shell created by investigators.[4]

The investigation snared more than 12 public officials including:

  • Paul Zambrano, Mayor of West Long Branch, NJ
  • John Merla, Mayor of Keyport, NJ
  • Paul Coughlin, Mayor of Hazlet, NJ
  • Richard Iadanza, Deputy Mayor of Neptune Township, NJ
  • John Hamilton, Jr., Councilman, Asbury Park, NJ
  • Joseph DeLisa, Councilman, West Long Branch, NJ
  • Robert Hyer, Councilman, Keyport, NJ
  • Raymond O'Grady, Councilman, Middletown, NJ and director of the Monmouth County, NJ motor pool
  • Patsy Townsend, Director of Construction and Code Enforcement, Neptune, NJ
  • Joseph McCurnin, Operations Manager for Monmouth County's Division of Transportation
  • Thomas Broderick, Assistant Monmouth County Roads Supervisor
  • Richard Vuola, commissioner, Marlboro Municipal Utilities Authority, Marlboro, NJ
  • Monmouth County Freeholder Harry Larrison Jr. died before his case came before the court.[5]

Operation Bid Rig III

The third phase of the investigation—Operation Bid Rig III—began after an individual identified by news sources as real estate developer Solomon Dwek of Ocean Township was arrested on charges of committing $50 million in bank fraud in May 2006. Dwek, a well-known member of the Syrian Jewish community whose parents founded the Deal Yeshiva,[1] agreed to become a cooperating witness for the FBI, infiltrating a money-laundering network connecting Israel and Syrian Jewish communities in Brooklyn and Deal, New Jersey. This network has allegedly laundered tens of millions of dollars through charitable non-profit organizations controlled by rabbis in New York and New Jersey. Among the rabbis implicated are Saul J. Kassin of Congregation Shaare Zion in Brooklyn, Eliahu Ben Haim of Congregation Ohel Yaacob in Deal, and Edmond Nahum of the Deal Synagogue.[6]

According to criminal complaints, Dwek (identified as "CW" for "cooperating witness"), informed targets of the sting that he was bankrupt and trying to conceal his assets, claiming involvement in illegal businesses including the sale of counterfeit Gucci and Prada handbags, as well as insurance scams and bank frauds. The targets accepted checks made by Dwek made out to their charitable foundations and returned the money to him after deducting a fee. Much of the cash they provided him came from Israel, and some of that in turn came from a Swiss banker, prosecutors said. Prosecutors said that about $3 million had been laundered for Dwek since the beginning of the third phase of the operation in June 2007, much of the money coming from Israel.

The case shifted to focus on public corruption after one of the men accused of money laundering, Moshe Altman of Monsey, New York, a Hudson County developer, introduced Dwek to a politically connected building inspector in Jersey City, who then steered him to another city official, Maher Khalil. Khalil, who is accused of accepting $30,000 in bribes from Mr. Dwek, introduced Dwek to a web of public officials, mayoral and council candidates, and their confidants, whom he called "players"[1]

On July 23, 2009, Acting United States Attorney for the District of New Jersey Ralph J. Marra, Jr. announced the arrest of the following 44 people:[7]

Money laundering
  • Eliahu Ben Haim, 58, Long Branch, NJ
  • Schmulik Cohen, 35, Brooklyn, NY
  • Levi Deutsch, 37, Brooklyn, NY
  • Yeshayahu Ehrental, 65, Brooklyn, NY
  • Mordchai Fish, 56, Brooklyn, NY
  • Yolie Gertner, 30, Brooklyn, NY
  • David S. Goldhirsh, 30, Brooklyn, NY
  • Shimon Haber, 34, Brooklyn, NY
  • Saul Kassin, 87, Brooklyn, NY
  • Edmund Nahum, 56, Deal, NJ
  • Abe Pollack, 40, Brooklyn, NY
  • Lavel Schwartz, 57, Brooklyn, NY
  • Binyomin Spira, 28, Brooklyn, NY
  • Naftoly Weber, 40, Brooklyn, NY
  • Arye Weiss, 34, Brooklyn, NY
Human organ trafficking
  • Levy-Izhak Rosenbaum, 58, Brooklyn, NY
Political corruption
  • Moshe Altman, 39, Monsey, NY
  • Charlie Ammon, 33, Lakewood, NJ
  • Leona Beldini, 74, Jersey City, NJ
  • Peter Cammarano, 32, Hoboken, NJ
  • Joseph Cardwell, 68, Jersey City, NJ
  • Joseph Castagna, 53, Jersey City, NJ
  • Guy Catrillo, 54, Jersey City, NJ
  • Edward Cheatam, 61, Jersey City, NJ
  • Dennis Elwell, 64, Secaucus, NJ
  • Itzak Friedlander, 41, Union City, NJ
  • Richard Greene, 45, Jersey City, NJ
  • John Guarini, 59, Bayonne, NJ
  • Denis Jaslow, 46, Wall, NJ
  • Maher A. Khalil, 39, Jersey City, NJ
  • James P. "Jimmy" King, 67, Jersey City, NJ
  • Louis Manzo, 54, Jersey City, NJ
  • Michael Manzo, 53, Jersey City, NJ
  • Ronald Manzo, 65, Bayonne, NJ
  • Michael Schaffer, 58, Hoboken, NJ
  • Lori Serrano, 37, Jersey City, NJ
  • Jack Shaw, 61, Jersey City, NJ
  • L. Harvey Smith, 60, Jersey City, NJ
  • Anthony R. Suarez, 42, Ridgefield, NJ
  • Vincent Tabbachino, 68, Fairview, NJ
  • Daniel M. Van Pelt, 44, Waretown, NJ
  • Mariano Vega, Jr., 59, Jersey City, NJ
  • Lavern Webb-Washington, 60, Jersey City, NJ
  • Jeffrey Williamson, 57, Lakewood, NJ

Organ trafficking

Levy Izhak Rosenbaum of Brooklyn was alleged to have been conspiring to arrange the sale of an Israeli citizen's kidney for $160,000.[1] According to the complaint, Rosenbaum told the cooperating witness that he had been involved in the illegal sale of kidneys for 10 years. Acting US Attorney Ralph Marra said "His business was to entice vulnerable people to give up a kidney for $10,000 which he would turn around and sell for $160,000". Anthropologist and organ trade expert Nancy Scheper-Hughes claimed that she had informed the FBI that Rosenbaum was "a major figure" in international organ smuggling 7 years ago, and that many of Rosenbaum's donors had come from Eastern Europe. She also heard reports that Rosenbaum held donors at gunpoint to ensure they donated their organs.[8] This is the first organ trafficking case in U.S. history. In October 2011, Rosenbaum plead guilty to three counts of organ trafficking and one count of conspiracy.[9]

Fallout from arrests

One of the 44 defendants, political operative Jack Shaw, was found dead in his Jersey City apartment on July 28, 2009. His death was suspected to be a suicide.[10]

Some officials have been sentenced and are serving time in prison. Two were found not guilty. Many have their sentences pending after a federal appeals court judge threw out sentences of extortion based on the federal Hobbs Act.[11] Prosecutors have decided not to appeal that decision, [12] and they are now reviewing several cases.[13] Other defendants are currently on trial or awaiting trial.

Sentenced

Union City real estate developer Moshe "Michael" Altman was sentenced to 41 months in prison for money laundering through the charity Gmach Shefa Chaim.[14] He pleaded guilty to 15 separate instances of money laundering in which he pocketed more than $100,000. Itzhak Friedlander, another Hudson County developer involved with the charity, was sentenced to two years in prison for his role in the money laundering sting.[15] Shimon Haber, a Brooklyn developer, pleaded guilty to conspiracy charges related to the money laundering [16] and was sentenced to 10 months detention, five in prison and five at home.[17]

Former Hoboken Mayor Peter Cammarano III stepped down as mayor and was found guilty on August 5, 2010 and given two years in prison.[18] He entered prison in October 2010.

Catrillo entered a guilty plea and was fired by the City of Jersey City. He was sentenced to 18 months in prison, and fined $4000.[19] He entered federal prison in March, 2010.

Kenny was sentenced to one year and one day in prison, two years of supervised release and $4,000 fine.[20] He is set to be released May 4, 2011.

Schaffer stepped down from the North Hudson Sewerage Authority commissioner and plead guilty to criminal information and extortion charges. He was sentenced in January 2011 to 18 months in prison.[21]

Van Pelt was sentenced with 41 months in prison. He had resigned from the legislature and was fired from his job as Lumberton Township Administrator on July 25.[22] He entered prison in January 2010.

Vega held onto his seat on the Council until pleading guilty to the extortion conspiracy charge in September 2010. The other charges were dismissed. On April 11, 2011 he was sentenced to 30 months in prison.[23]

Rabbi Saul J. Kassin, of the Syrian Jewish Congregation Shaare Zion Synagogue, plead guilty to unauthorized money transmitting. He was sentenced to two years probation & fined $36,750, and also ordered to forfeit $367,500 which represented the fees he had taken for the illegal transfers.[24]

Found Not Guilty

After refusing to step down, Suarez narrowly survived an August 2010 recall election [25] and was found not guilty on October 28, 2010.[26]

Smith was found not guilty on December 16, 2010.[27] He had refused to resign despite intense pressure from his own party and did not stand for re-election in 2009.

Trials Pending

Elwell resigned as Mayor of Secaucus on July 28 and pleaded not guilty to the charges. His trial is scheduled to begin in June 2011.[28]

On January 12, 2010 Jersey City Housing Inspector John Guarini was indicted on one count of conspiracy to obstruct commerce by extortion under color of official right, four counts of attempted obstruction of commerce by extortion, and four counts of bribery.[29] He has pleaded not guilty.

Pending Appeal

Beldini stepped down as Deputy mayor and was given three years in prison but is free on bail pending appeal.[30]

Louis and Ron Manzo and Serrano were cleared of charges that they had violated the federal Hobbs Act. In May, 2010 an appeals court ruled that they were not covered by the act because they were not public officials. [31] Louis Manzo still faces bribery and mail fraud charges.

Jaslow and King both pleaded guilty in 2009 [32][33] but sentencing has been on hold during the appeal.

Michael Manzo (no relation) pleaded guilty to conspiracy to commit extortion under color of official right and admitted accepting bribes of $5,000 from Dwek.[34] As part of his plea agreement, Manzo agreed to return the money and to cooperate with the government in related prosecutions.[34] He has not been sentenced.

Webb-Washington was sentenced to one year and one day in prison for conspiracy to commit extortion under the color of official right for accepting $15,000 in bribes from informant Dwek.[35] She is free on bail awaiting the prosecutors' decision.

Pleaded Guilty Not Sentenced

Cheatam pleaded guilty and was a prosecution witness in the trial against Smith. He has not yet been sentenced.[36]

In October 2010, Dwek pleaded guilty in federal court in Newark to one count each of money laundering and bank fraud charges amounting to about $50 million dollars. Standing before U.S. District Judge Jose L. Linares, Dwek answered questions on attempting to defraud PNC Bank.[37][38] He has not been sentenced.

Khalil pleaded guilty and was fired by the City of Jersey City immediately following their guilty pleas.He has been permanently barred from public sector employment [39] but no sentencing has been announced.

Ron Manzo pleaded guilty in May 2011 to conspiring to bribe then-Mayor Dennis Elwell on Dweck's behalf. [40]

On December 3, Ocean County Democratic Party executive director Alfonso L. Santoro, who had not been previously charged, pleaded guilty in a federal court to accepting cash payments from Dwek in exchange for promising to introduce him to public officials, including then-Assemblyman Van Pelt.[41]

Tabbachino was found guilty of bribery extortion in 2010 and pleaded guilty in 2011 to separate charges of laundering $125,000 for Dweck in exchange for a 10% cut. He will be sentenced in August 2011.[42][43]

Jersey City Housing Inspector John Guarini admitted that he accepted $30,000 in cash bribes from Dweck. He was indicted on one count of conspiracy to obstruct commerce by extortion under color of official right, four counts of attempted obstruction of commerce by extortion, and four counts of bribery. Initially he had pleaded not guilty, but those charges were dropped when he pleaded down to tax evasion. He is awaiting sentencing.[44]

Not Charged

As part of the FBI sweep, the home and office of New Jersey Commissioner of the Department of Community Affairs Joseph Doria were raided but he was not charged. His resignation was announced by Governor Jon Corzine.[45]

Bribery charges against Richard Greene, a Hudson County purchasing agent, were dropped. He later testified against his former employer, Assemblyman L. Harvey Smith, who was acquitted. [46]

References

  1. ^ a b c d Halbfinger, David M. (2009-07-23). "44 Charged by U.S. in New Jersey Corruption Sweep". The New York Times. http://www.nytimes.com/2009/07/24/nyregion/24jersey.html. Retrieved 2009-07-24. 
  2. ^ "Massive N.J. corruption sting targets mayors, legislators, rabbis". The Star-Ledger. 2009-07-23. http://www.nj.com/news/index.ssf/2009/07/massive_nj_corruption_sting_ta.html. Retrieved 2009-07-24. 
  3. ^ "Bid Rig III News Release". United States Department of Justice. 2009-07-23. http://www.usdoj.gov/usao/nj/press/press/files/pdffiles/bidrig0723.rel.pdf. Retrieved 2009-07-24. 
  4. ^ "A Flashy Contractor Named Duke". The Star-Ledger. 2005-02-24. http://www.nj.com/news/ledger/index.ssf?/corruption/stories/20050224_monmouth_duke.html. Retrieved 2009-07-27. 
  5. ^ "Monmouth's 11". The Star-Ledger. 2005-02-23. http://www.nj.com/news/ledger/index.ssf?/corruption/stories/monmouth11.html. Retrieved 2009-07-27. 
  6. ^ "FBI's key witness in corruption probe? Solomon Dwek". Home News Tribune. 2009-07-23. http://www.mycentraljersey.com/article/20090723/NEWS/90723049. Retrieved 2009-07-24. 
  7. ^ "List of those arrested today by FBI". Asbury Park Press. 2009-07-23. http://www.app.com/article/20090723/NEWS/90723064/1004. Retrieved 2009-07-24. 
  8. ^ Mozgovaya, Natasha (2009-07-26). "Prof. says she told FBI of kidney trafficking". Haaretz. http://www.haaretz.com/hasen/spages/1102799.html. 
  9. ^ Guilty Plea to Kidney-Selling Charges - New York Times, 27 Oct 2011
  10. ^ "Officials investigate death of Hudson County political consultant charged in corruption sting". The Star-Ledger. 2009-07-28. http://www.nj.com/news/index.ssf/2009/07/officials_investigate_death_of.html. Retrieved 2009-07-31. 
  11. ^ Hayes, Melissa, Judge tosses Hobbs Act charges against former Hudson assemblyman Lou Manzo and his brother, Jersey Journal, May 18, 2010
  12. ^ Spoto, Mary Ann, U.S. attorney won't appeal dropped charges against ex-Assemblyman Lou Manzo, brother, Star-Ledger, May 5, 2011
  13. ^ Conte, Michaelangelo, Hearing on status of five Jersey City political figures in various stages of being prosecuted..., Jersey Journal, March 17, 2011
  14. ^ Union City developer ensnared in Operation Bid Rig III sentenced to 41 months in prison, Jersey Journal, March 31, 2011
  15. ^ Sherman, Ted, Hudson County investor gets 2 years in prison for conspiring to launder nearly $200K, Star-Ledger, April 14, 2011
  16. ^ Hayes, Melissa, Union City real estate developer pleads guilty to laundering money as part of last year's massive sting operation, Jersey Journal, December 2, 2010
  17. ^ Ray, Joe, Shimon Haber, who pleaded guilty in N.J. corruption bust, gets five months in prison, Star-Ledger, May 25, 2010
  18. ^ Sherman, Ted, Former Hoboken Mayor Peter Cammarano gets 2 years in prison for taking bribes, Star-Ledger, August 5, 2010
  19. ^ Ryan, Joe (January 23, 2010). "Catrillo draws 18 months in prison, $4,000 fine for role in Jersey City corruption". The Jersey Journal. http://www.nj.com/news/jjournal/index.ssf?/base/news-4/1264231540181040.xml&coll=3. 
  20. ^ Hayes Melissa, Former Jersey City Councilman Kenny gets one year in prison, Jersey Journal, May 5, 2010
  21. ^ Schmidt, Margaret, Former Hoboken Councilman Michael Schaffer sentenced to 18 months in federal prison, Jersey Journal, January 18, 2011
  22. ^ http://www.pressofatlanticcity.com/news/breaking/article_f6dfe548-7956-11de-8998-001cc4c03286.html
  23. ^ Conte, Michaelangelo, Former Jersey City Council President Mariano Vega Jr. sentenced to 30 months in federal prison, Jersey Journal, April 11, 2011
  24. ^ "Syrian rabbi nabbed in N.J. corruption sweep receives two years probation". The Star-Ledger. 2011-06-01. http://www.nj.com/news/index.ssf/2011/06/syrian_rabbi_nabbed_in_nj_corr.html. Retrieved 2011-06-01. 
  25. ^ Ridgefield voters decide to keep mayor arrested in corruption sting last year Star-Ledger, August 17, 2010
  26. ^ Ryan, Joe, Ridgefield Mayor Anthony Suarez found not guilty on federal corruption charges, Star-Ledger, October 28, 2010
  27. ^ Spoto, MaryAnn, Ex-Assemblyman L. Harvey Smith is found not guilty of accepting $15K in bribes, Star-Ledger, December 16, 2010
  28. ^ Wright, Assada, Could former Mayor Elwell be eyeing an acquittal?, Hudson Reporter, March 6, 2011
  29. ^ Hayes, Melissa (January 13, 2010). "Indictment says Jersey City Housing Department worker took $50,000 in bribes". The Jersey Journal. http://www.nj.com/news/jjournal/jerseycity/index.ssf?/base/news-9/1263367570121180.xml&coll=3. Retrieved January 13, 2010. 
  30. ^ Ryan, Joe, Former Jersey City deputy mayor Leona Beldini gets three years in prison, Star-Ledger, June 13, 2010
  31. ^ Prosecutors consider appealing dismissal of corruption charges against Manzos, The Jersey Journal, March 17, 2011
  32. ^ "Ex-Jersey City candidate admits role in extortion". Philadelphia Inquirer. 2009-09-25. http://www.philly.com/inquirer/local/nj/20090925_Former_Jersey_City_official_pleads_guilty_to_corruption.html. Retrieved 2009-09-25. [dead link]
  33. ^ McDonald, Terrance, Seven defendants charged in corruption sweep to meet in court, Jersey Journal, February 24, 2011
  34. ^ a b Hayes, Melissa (December 3, 2009). "Kin see ex-candidate plead guilty to taking $5G from informant". The Jersey Journal (The Evening Journal Association). http://www.nj.com/news/jjournal/jerseycity/index.ssf?/base/news-9/1259825130139790.xml&coll=3. Retrieved December 3, 2009. 
  35. ^ Conte, Michaelangelo (March 18, 2010). "La Vern Webb-Washington of Jersey City sentenced to year and a day for taking bribes". Hudson County Now. Advance Publications LLC. http://www.nj.com/hudson/index.ssf/2010/03/guilty_of_taking_bribes_jersey.html. 
  36. ^ Hayes, Melissa, Former Jersey City school board member says he didn't rig bids, Jersey Journal, December 6, 2010
  37. ^ "Dwek pleads guilty to $50 million bank fraud". Asbury Park Press. October 20, 2009. http://www.app.com/article/20091020/NEWS/91020016/1004/NEWS01&source=rss. Retrieved 2009-10-20. [dead link]
  38. ^ "Details emerge on Solomon Dwek, informant in N.J. corruption probe, after guilty pleas". NJ.com. October 20, 2009. http://www.nj.com/news/index.ssf/2009/10/solomon_dwek_before_he_was_inf.html. Retrieved October 20, 2009. 
  39. ^ Conte, Michaelangelo, Corrupt Jersey City official permanently barred from public sector employment in Garden State, Jersey Journal, March 22, 2011
  40. ^ Ron Manzo pleads guilty; has implications for former Secaucus Mayor Dennis Elwell, Hudson Reporter, May 12, 2011
  41. ^ "Ocean County Democrats' director admits taking bribes". Asbury Park Press. 2009-12-03. http://www.app.com/article/20091203/NEWS/912030363/Ocean-County-Democrats--director-admits-taking-bribes. Retrieved 2009-12-05. [dead link]
  42. ^ Judge sets plea date for Vincent Tabbachino, charged in massive 2009 corruption sting, Star-Ledger, March 17, 2011
  43. ^ Conte, Michaelangelo, Former Guttenberg councilman Tabbachino pleads guilty to money laundering, Jersey Journal, April 26, 2011
  44. ^ Sherman, Ted, Ex-Jersey City housing inspector pleads guilty to taking $20K bribe in 2009 Solomon Dwek corruption sting
  45. ^ "DCA Commisioner Joe Doria resigns amid New Jersey corruption probe". The Star-Ledger. 2009-07-23. http://www.nj.com/news/index.ssf/2009/07/dca_commisioner_joe_doria_resi.html. Retrieved 2009-07-24. 
  46. ^ "Former Hudson County employee not rehired after corruption charges are dropped gets $293K settlement". The Star-Ledger. 2011-05-18. http://www.nj.com/hudson/index.ssf/2011/05/293000_settlement_for_former_h.html. Retrieved 2011-05-26. 

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