By DAVID M. HALBFINGER
Published: July 23, 2009
New York Times - 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 Jerseys 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.
For these defendants, corruption was a way of life, Ralph J. Marra Jr., the acting United States attorney in New Jersey, said at a news conference. They existed in an ethics-free zone.
Mr. Marra said that average citizens dont have a chance against the culture of influence peddling the investigation had unearthed.
Even veteran political observers were taken aback by the scope of the investigation. The mayors of Hoboken, Secaucus and Ridgefield were among those arrested.
This is so massive, said Joseph Marbach, a political scientist at Seton Hall University. Its going to just reinforce the stereotype of New Jersey politics and corruption.
The arrests had immediate reverberations in the governors race, and a member of Gov. Jon S. Corzines administration was forced to resign after federal agents raided his home.
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.
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.
The case shifted to focus on public corruption, prosecutors say, after one of the men accused of money laundering, Moshe Altman of Monsey, N.Y., a Hudson County developer, introduced Mr. Zwek to a politically connected building inspector in Jersey City, who then steered him to another city official, Maher Khalil.
Mr. Khalil, who is accused of accepting $30,000 in bribes from Mr. Dwek, made a series of referrals to what he called players, helping Mr. Dwek to branch out to a web of public officials, mayoral and council candidates, and their confidants.
Mr. Dwek now operating under an assumed identity, according to people involved in the case honed an approach: introduced to a local influence-peddler, he would say he was looking to build high-rises or other projects in their city or county.