Following the N.J. corruption money trail: Money laundering splintered into political probe
by The Star-Ledger Continuous News Desk
NEWARK -- What began as a federal investigation into money laundering by Syrian Jewish community leaders in New Jersey and New York a decade ago spawned into a broad web of political corruption that enveloped two N.J. assemblymen and three mayors.
At the heart of the probe was the money. The politicians are accused of taking bribes. And five rabbis are accused of laundering it through their non-profit religious institutions, while keeping a cut for themselves. One Brooklyn man, who was among the 44 charged today, was even accused of trying to broker a $160,000 deal for a kidney transplant.
In the last two years alone, a confidential witness -- identified by sources close to the investigation as millionaire real estate developer Solomon Dwek -- laundered $3 million through the rabbis, according to the U.S. Attorney's Office, which declined to name the witness.
"He 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," the U.S. Attorney's Office said in a statement announcing the charges.
In addition to the 44 arrests, federal authorities today seized 28 bank accounts in the names of those charged with laundering money.
The key players, according to federal authorities, include Eliahu Ben Haim, of Long Branch, the rabbi for Congregation Ohel Yaacob in Deal. He is accused of taking payments as large as $160,000 made payable to his charitable, tax-exempt organization and laundering it for a 10 percent fee, authorities said.
Saul Kassin, a prominent rabbi in Brooklyn, and Edmund Nahum, the leader of a synagogue in Deal, orchestrated similar money laundering rings, according to the federal complaints. Brooklyn rabbis Mordchai Fish and his brother Lavel Schwartz were also charged with laundering money.
The money was laundered, in part, through cash houses in Brooklyn, as well as an Israeli named Levi Deutsch, who traveled frequently between New York and Israel. According to the complaint, he told the cooperating witness that his source of cash was the diamond business, and a Swiss banker.
The connection to New Jersey politics, however, came long after the initial investigation began. In June 2007, the expanding money laundering probe led the cooperating witness to be introduced to Jersey City building inspector John Guarini, who is charged with taking $40,000 in bribes from the witness, according to the federal charges.
That launched a wave of meetings where the cooperating witness bribed other officials with envelopes stuffed with cash during dinners in restaurants from Atlantic City to Staten Island, according to the complaints.
The bribes, according to federal authorities, to the key politicians included:
-- Hoboken Mayor Peter Cammarano $25,000
-- Assemblyman L. Harvey Smith (D-Hudson) $15,000
-- Jersey City Deputy Mayor Leona Beldini $20,000 (in campaign contributions)
-- Secaucus Mayor Dennis Elwell $10,000
-- Ridgefield Mayor Anthony Suarez $10,000
-- Assemblyman Daniel Van Pelt (R-Ocean) $10,000
Here's more on Dwek:
The Man Who Sank New Jersey
Nathan Vardi • Forbes
How a quiet, stocky real estate developer named Solomon Dwek cracked open the massive corruption scandal.
On April 27, Hoboken mayoral candidate Peter Cammarano III; his close associate, North Hudson Utilities Authority Commissioner Michael Schaffer; a Jersey City Board of Education official and a New Jersey consultant, met a quiet, stocky real estate developer at a local diner for lunch. The real estate developer wanted assurances about zoning approvals and told Cammarano that he "wanna make sure that I, you know, you, you're my man." Cammarano, according to court documents, did not hesitate, answering: "[y]ou can put your faith in me."
Having formed a bond, the real estate developer and Schaffer headed to the parking lot, where the developer fished out an envelope containing $5,000 in cash from the trunk of his car and handed it to Schaffer, saying "just make sure he gets my stuff, uh, expedited." Replied Schaffer: "I certainly will."
This was amateur night, New Jersey style. Solomon Dwek, a 36-year-old real estate developer, has been identified as the main cooperating witness in the massive government corruption probe announced today in Newark, N.J. Dwek had been charged with bank fraud by the feds back in 2006, which should have given Cammarano and Schaffer reason to wonder if Dwek was wearing a wire as part of a deal with the government. But blinded by greed and a lack of common sense, prominent politicians, public officials and rabbis were done in by the short bespectacled son of a rabbi who headed a Jewish Sephardic synagogue in Ocean Township, N.J.
The Federal Bureau of Investigation used the cooperating witness to launder $3 million as part of a corruption and money laundering investigation that resulted on Thursday in the arrest of Hoboken Mayor Cammarano, Schaffer, Secaucus Mayor Dennis Elwell, Ridgefield Mayor Anthony Suarez and New Jersey state assemblymen L. Harvey Smith and Daniel Van Pelt.
In total, 44 people wound up in handcuffs, including rabbis from New Jersey and Brooklyn as Dwek broke up cases on separate fronts for the feds, including one scheme that involved the trafficking of body parts in a network that went all the way to Israel. A lawyer for Dwek could not be reached for comment.
The sweeping chain of events started in April 2006, when Dwek pulled up to a drive-through window at his longtime bank, a PNC Bank branch in Eatontown, N.J., and handed a bogus $25 million check to the teller written on a closed account. Dwek, a real estate developer with nearly 400 properties, was trying to pay back some loans, but the feds later charged him with bank fraud. Dwek filed for Chapter 11 bankruptcy and left a mess for his creditors, banks and investors.