Rabbis among 44 arrested in corruption probe

Federal prosecutors said the inquiry initially focused on a money laundering network which operated between the New York City borough of Brooklyn; Deal, New Jersey; and Israel.

The network is alleged to have laundered tens of millions of dollars through Jewish charities controlled by rabbis in New York and New Jersey.

Prosecutors then used an informant in that investigation to help them go after corrupt politicians.

The informant – a real estate developer charged with bank fraud three years ago - posed as a crooked businessman and paid a string of public officials tens of thousands of dollars in bribes to get approvals for buildings and other projects in New Jersey, authorities said.

Among the 44 people arrested were the mayors of Hoboken, Ridgefield and Secaucus, Jersey City’s deputy mayor, and two state assemblymen. A member of the governor’s cabinet resigned after agents searched his home, although he was not arrested. All but one of the officials are Democrats.

In addition, five rabbis from New York and New Jersey – two of whom lead congregations in Deal – were accused of laundering millions of dollars, some of it from the sale of counterfeit goods and bankruptcy fraud, authorities said.

Others arrested included building and fire inspectors, city planning officials and utilities officials, all of them accused of using their positions to further the corruption.

In rounding up the defendants, FBI and IRS agents yesterday raided a synagogue in Deal, a wealthy oceanfront city of Mediterranean-style mansions, with a large population of Syrian Jews.

Those arrested include Levy Izhak Rosenbaum, of Brooklyn, who was charged with conspiring to arrange the sale of an Israeli citizen’s kidney for $160,000 (€113,000) for a transplant for the informant’s fictitious uncle. He was quoted as saying he had been arranging the sale of kidneys for 10 years.

The politicians arrested were not accused of any involvement in the money laundering or the trafficking in human organs and counterfeit handbags.

The number of arrests was remarkable even for New Jersey, where more than 130 public officials have pleaded guilty or have been convicted of corruption since 2001.

“New Jersey’s corruption problem is one of the worst, if not the worst, in the nation,” said Ed Kahrer, who heads the FBI’s public corruption division. “Corruption is a cancer that is destroying the core values of this state.”

Governor Jon Corzine said: “The scale of corruption we’re seeing as this unfolds is simply outrageous and cannot be tolerated.”

Hours after FBI agents seized documents from his home and office, New Jersey Community Affairs Commissioner Joseph Doria resigned. Federal officials would not say whether he would be charged. Mr Doria was not available for comment.

Authorities did not identify the informant, described in court papers as a person “charged in a federal criminal complaint with bank fraud in or about May 2006”. But the date matches up with an investigation that led to charges against Solomon Dwek, the son of a Deal rabbi.

The younger Dwek was charged at the time in connection with a bounced $25m (€17.6m) cheque he deposited in a bank’s drive-through window. He has denied the charges.

Dwek’s lawyer was not immediately available for comment, but lawyers for some of the rabbis who were arrested pointed a finger at him.

“Solomon Dwek – isn’t that the government’s co-operator?” said Robert Stahl, a lawyer for 87-year-old Rabbi Saul Kassin, of Brooklyn. Mr Stahl said it was a shame the rabbi had been “caught up in this misunderstanding” and that he “remained confident”.

Michael Bachner, representing Brooklyn Rabbi Mordchai Fish, said “our belief is that Mr Dwek used his closeness and the sterling reputation of his family to manipulate individuals who trusted that he would never be involved in illegal conduct”.

Most of the defendants facing corruption charges were released on bail. The money-laundering defendants faced bail between $300,000 (€211,000) and $3m (€2.1m), and most were ordered to submit to electronic monitoring.

Among those ensnared by the informant was Hoboken Mayor Peter Cammarano III, prosecutors said. The 32-year-old, who won a run-off election last month, was accused of accepting money from the developer at a Hoboken diner.

“There’s the people who were with us, and that’s you guys,” the complaint quotes him as saying.

“There’s the people who climbed on board in the run-off. They can get in line... And then there are the people who were against us the whole way... They get ground into powder.”

Cammarano’s lawyer, Joseph Hayden, said his client was “innocent of these charges. He intends to fight them with all his strength until he proves his innocence.”

Cammarano was accused of accepting $25,000 (€17,600) in cash bribes. Secaucus Mayor Dennis Elwell was charged with taking $10,000 (€7,000). Ridgefield Mayor Anthony Suarez was charged with agreeing to accept an illegal $10,000 (€7,000).

Jersey City Deputy Mayor Leona Beldini was charged with conspiracy to commit extortion by taking $20,000 (€14,000) in illegal campaign contributions. State Assemblymen Daniel Van Pelt and L Harvey Smith were also accused of taking payoffs.

Jersey City Mayor Jerramiah Healy said the charges were “a little shocking”.

“I have full faith in Leona,” Mr Healy said. “She’s a good friend of mine - was and will be.”

Mike Winnick was praying inside the Deal Synagogue when it was raided. He said four FBI agents escorted a rabbi into his office and blocked the doorway. “Everyone was looking at each other, like ’What’s going on here?”’ he said.

Buses carrying those arrested were brought to the FBI’s Newark office. One agent slowly walked an elderly rabbi into the building as another covered his face with a felt hat.