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Solomon Dwek, cooperator in largest NJ corruption probe, gets 6 years in federal prison

Photo Credit: Cliffview Pilot File Photo

More than three years after the largest corruption bust in New Jersey history, the man who helped make it all happen — crooked developer Solomon Dwek — was sentenced to 72 months in federal prison today in connection with his scheme to defraud PNC Bank of more than $50 million.

U.S. District Judge Jose L. Linares also sentenced Dwek to five years of supervised released and ordered the broke criminal to pay restitution of $22.8 million.

He will be taken to state Superior Court in Freehold for a morning sentencing on related state charges.

“Although Dwek’s fraudulent conduct was extremely serious, today’s sentence also takes into account his extraordinary cooperation against corrupt politicians, money launderers, and organ trafficking,” U.S. Attorney Paul J. Fishman said.

“As in all cases where defendants choose to assist the government, the court must impose a sentence that takes into account the magnitude of the crime, the nature, value and extent of the defendant’s assistance, and the defendant’s personal circumstances,” Fishman added. “The sentence imposed today by the Court was a just and appropriate balance.”

“Solomon Dwek’s impact on systemic corruption in New Jersey is considerable,” FBI Special Agent in Charge Michael B. Ward said. “In an environment where corruption subjects often go to great lengths to make known they have refused to cooperate, Dwek made substantial personal sacrifices in order to assist law enforcement. He must stand accountable for his own crimes, but in terms of his cooperation he deserves much credit.

“His efforts exposed cooruption at unprecedented levels and cast a spotlight on the lengths some political candidates were willing to go to enrich themselves.”

It was on July 23, 2009 that CLIFFVIEW PILOT became the first media outlet to identify Dwek as the key witness in a federal corruption probe involving several North Jersey mayors, other government employees and a group of Sephardic rabbis, thorugh an extensive review of tapes and transcripts.

A review of government complaints released that morning didn’t identify him by name but pointed to Dwek as the man who met several times at the Malibu Diner with Hoboken Mayor Peter Cammarano and Michael Schaffer, a North Hudson Utilities Authority commissioner.

Each time, the “cooperating witness” gave Schaffer envelopes stuffed with cash from his car trunk, the FBI said at the time.

Dwek also helped the government crack a high-volume international money laundering conspiracy among rabbis from the Syrian Jewish enclaves of Deal and Brooklyn.

Several others were snared by Dwek, including two mayors — Dennis Elwell of Secaucus and Anthony Suarez of Ridgefield — who later were cleared.

U.S. District Judge Jose Linares in Newark sentenced Dwek today in connection to the crime that brought the crooked developer and the FBI together.

Six years ago, government agents arrested him on fraud charges.  Federal authorities said Dwek went to a drive-through window at PNC’s Eatontown branch and convinced the manager to accept a $25.2 million check written on a closed account, promising the money was being wired to cover it. The next morning, Dwek wired $22.8 million to pay off four loans, although no money had been received to cover the check, authorities say.

Later that day, Dwek deposited another $25 million check written on the same closed account at another PNC branch, which soon voided the check, federal prosecutors said.

It turned out Dwek had been involved in hundreds of questionable land deals, moving around money and not fulfilling commitments, the government said. Victims in civil court, meanwhile, accused Dwek of forging signatures to obtain millions of dollars from lenders.

Even his uncle filed a claim against Dwek, whose parents founded the Deal Yeshiva, a Jersey Shore religious school that teaches Sephardic Jewish children.

As complaints mounted from people who said Dwek had conned them out of millions, his options for avoiding prison shrank.

It’s unclear when the government “rolled” him, but it wasn’t long before Dwek was cozying up to rabbis from his own community, as well as North Jersey officials who’d never even heard of him.

A total of 46 people were charged in “Operation Bid Rig II” — 32 of whom pleaded guilty and four who were convicted at trial.

Two were acquitted, one died, and charges were dropped against four. Two others are awaiting trial. One is listed as a fugitive.

From a release issued this afternoon by Fishman’s office:

Dwek and Joseph S. Kohen, 39, of Deal, schemed to defraud PNC Bank of more than $50 million and to launder approximately $22.8 million of the proceeds through other banks, which included paying off an overdue and fraudulently obtained $20 million line of credit at HSBC Bank USA, N.A. (HSBC).

Dwek and Kohen schemed to defraud PNC Bank by presenting, on April 24,2006, a $25,212,076 check drawn on a Dwek-controlled account in the name of Corbett Holdings at a PNC Bank branch in Eatontown, N.J. Dwek wanted the check deposited into another PNC account that he controlled in the name of SEM Realty Associates LLC. After a PNC Bank official advised him that the Corbett Holdings account was closed with a zero balance, Dwek falsely represented that “corporate” was reopening the account and that a wire transfer of funds into the Corbett Holdings account would be forthcoming, which did not occur. Dwek’s check was honored and deposited.

The next day, Dwek phoned in four wire transfers out of the SEM Realty account to various other banks, including $20 million and $2.2 million wire transfers to HSBC, according to Dwek. The $20 million wire transfer to HSBC was for the purpose of paying off an overdue and fraudulently obtained $20 million line of credit that he received from HSBC, which he had fully drawn down. As a result, the SEM Realty account was overdrawn by $22.8 million.

On April 25, 2006, Dwek presented another bogus $25 million check to be drawn on the same Corbett Holdings account for deposit into the same SEM Realty account at a PNC Bank branch in Asbury Park. This check was not honored or deposited by the bank. Dwek made a number of false statements and representations to cover up this scheme, including falsely advising a PNC bank official that he was expecting a wire transfer from an attorney that would cover the $25,212,076 check drawn on the Corbett account. Dwek later called back the PNC official and had Kohen pose as the attorney and falsely tell the bank official that he would make a wire transfer to cover the $25 million check. The wire transfers of these fraudulently obtained proceeds to HSBC, as well as two other wire transfers of $580,000 and $10,000 to other banks, was money laundering.

Kohen pleaded guilty to bank fraud on March 21, 2007. He was sentenced to 30 months in prison by Judge Linares.

Dwek was charged with bank fraud on May 11, 2006, in a criminal Complaint. He cooperated with law enforcement in an investigation of pre-existing money laundering networks that operated internationally among New York, New Jersey, Israel and other locations and laundered millions of dollars through charitable, non-profit entities. This cooperation led to the conviction of, among others, five rabbis, on money laundering and unlicensed money remitting charges. Among those convicted were Rabbi Eliahu Ben Haim of Elberon, N.J., the former chief rabbi of Congregation Ohel Yaacob in Deal, N.J., and Rabbi Mordchai Fish, the former chief rabbi of Congregation Sheves Achim in Brooklyn,

N.Y. U.S. District Judge Joel A. Pisano sentenced Ben Haim to 60 months in prison in January 2012 and sentenced Rabbi Mordchai Fish to 46 months in prison on July 3, 2012.

Dwek’s cooperation also led to the first-ever conviction for organ trafficking under the National Organs Transplant Act of 1984. Levy Izhak Rosenbaum of Brooklyn pleaded guilty to three counts of organs trafficking and one count of conspiracy to commit organ trafficking and was sentenced to 30 months in prison on July 11, 2012, by U.S. District Judge Anne E. Thompson in Trenton.

Law enforcement officials also used Dwek to investigate public corruption in New Jersey. Those investigations led to convictions against numerous individuals for public corruption, including Hoboken Mayor Peter Cammarano, who was sentenced to 24 months in prison on Aug. 5, 2010; Secacus Mayor Dennis Elwell, who received a term of 30 months in prison on April 12, 2012; Jersey City Council President Mariano Vega Jr., who received a sentence of 30 months in prison on April 11, 2011; and Jersey City Deputy Mayor Leona Beldini, who received a prison term of 36 months on June 14, 2010. All four defendants were sentenced by Judge Linares. In addition, Assemblyman Daniel Van Pelt of Ocean County was convicted at trial before Judge Pisano and sentenced to 41 months imprisonment on Nov. 22, 2010.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s sentencing. He also thanked assistant prosecutors and investigators from the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher J. Gramiccioni, for their role in the investigation.

The government is represented Assistant U.S. Attorney Mark McCarren of the Special Prosecutions Division

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