Corruption scandal rocks US state of New Jersey

Rabbis and local officials in New Jersey arrested over money laundering and organ trafficking.

A man in handcuffs is escorted by an officer at the federal court in Newark on Thursday.

WASHINGTON // A tale of black-market trafficking of kidneys, fake Gucci handbags and corrupt politicians sounds like the plot from the television drama The Sopranos about the mafia in New Jersey. But the real story of one of the biggest corruption scandals to be uncovered was on the front pages of newspapers from the United States to Israel yesterday, a day after the arrests of 44 people, including local officials alleged to be involved in influence-peddling and rabbis investigated as part of a separate money-laundering network and organ trafficking.
The 10-year investigation by federal agencies stretched from New Jersey and New York to Israel and Switzerland and embroiled a close-knit Syrian Jewish community and religious charities. An informant helped to uncover a money-laundering network run by rabbis who laundered some US$3 million (Dh110m) between the US and Israel in the last two years, authorities said.
"These complaints paint a disgraceful picture of religious leaders heading money-laundering crews acting as crime bosses," said Ralph Marra, a US lawyer. "They used purported charities, entities supposedly set up to do good works as vehicles for laundering millions of dollars in illicit funds."
A spokesman said Israel's national police force was not involved in the investigation but would not comment further, the Associated Press reported.
The bribery side of the investigation netted the arrests of three mayors in New Jersey, a deputy mayor and two state assemblymen. A member of the cabinet of Jon Corzine, the New Jersey governor, resigned after agents searched his home, although he was not arrested. More than 130 public officials have pleaded guilty or have been convicted of corruption since 2001 in New Jersey and the state has been associated with political scandal going back decades.
"The politicians willingly put themselves up for sale," Mr Marra said. "The victims are the average citizens and the honest business people in this state. They don't have a chance in this culture of corruption."
All but one of the arrested office-holders were Democrats.
The scandal posed a direct threat to Mr Corzine, who is battling for re-election later this year. He was joined on the campaign trail last week by President Barack Obama, who is struggling to push healthcare reform through a fractious Congress.
The New Jersey investigation hinged on an informant, identified by the US media as Solomon Dwek and who goes by the nickname Shlomo. He was a real-estate developer from Deal, New Jersey, and was charged with bank fraud in 2006 before becoming a "co-operating witness". He was a prominent member of the Syrian Jewish community in the New Jersey and New York area that originally came from Damascus and Aleppo in the early years of the last century.
A scam involving the sale of kidneys has drawn particular public disgust. According to the criminal complaint, Mr Dwek approached Levy-Itzhak Rosenbaum, a rabbi in Brooklyn, pretending to be soliciting a kidney on behalf of someone. Mr Rosenbaum boasted he had been in business for years buying organs for $10,000 and selling them for $160,000. Mr Rosenbaum was accused of enticing vulnerable people, believed to be in Israel, to give up their kidneys. Mr Dwek approached other people, including three rabbis in Brooklyn and two in New Jersey, telling them he was bankrupt and needed to conceal assets. These people accepted bank cheques he made out to charities they oversaw, deducted a fee and returned the rest to him in cash.
Prosecutors said much of the cash came from Israel and one of the arrested men said he obtained the money from a Swiss banker. Weysan Dunn, the special agent in charge of the Federal Bureau of Investigation's office in Newark, New Jersey, stressed that its investigation was motivated by neither politics nor religion.
The allegations against the rabbis came as several Jewish charities in the United States were already reeling after falling victim to Bernie Madoff, who earlier this month started a 150-year sentence for running one of the biggest pyramid schemes in history.
Investigators shifted to public corruption after Mr Zwek was introduced by Moshe Altman, accused of money-laundering, to Maher Khalil, a politically connected building inspector. Mr Khalil made referrals to people he called "players" and helped Mr Dwek reach out to public officials, mayoral and council candidates, and their close associates. Mr Khalil was accused of accepting $30,000 in bribes from Mr Dwek. The meetings took place in diners, car parks and even bathrooms, according to officials.
In court documents, Mr Dwek was quoted as boasting about his counterfeit handbag business and money-laundering operations. "I have at least $100,000 a month coming from money I 'schnookied' from banks for bad loans," he was supposed to have told an alleged money-launderer. The material amassed by investors using wiretaps and further evidence to be presented at any future trials will keep scriptwriters busy for years to come.
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