Federation of Connecticut Taxpayer Organizations

JERSEY CITY � It was a story that sparked international headlines, countless jokes on late-night television, political resignations and prosecutorial recriminations.

But two years since the biggest federal corruption sting in New Jersey history broke open, the strange and sometimes bizarre criminal case involving dozens of politicians, five Orthodox rabbis and a guy selling black market kidneys, continues to play out:

� Eight of the 46 charged are still awaiting trial, including former Democratic Assemblyman Louis Manzo, who was arraigned Tuesday on new federal charges after he successfully challenged his initial indictment in the case.

� Thursday, James P. King, one of those who had already pleaded guilty to corruption charges, was back before a federal judge to plead to reduced charges after the most serious parts of the case against him were tossed out as part of the Manzo appeal.

� On Monday, Abraham Polack and Naftoly Weber of Brooklyn � both charged as cash couriers in the money laundering side of the investigation� were each sentenced three years� probation and $5,000 fines by U.S. District Judge Joel A. Pisano in Trenton. They also agreed to forfeit $179,770.

And Solomon Dwek � the informant at the center of the investigation known as Bid Rig III who agreed to cooperate with the government after being charged in an unrelated $50 million bank fraud � is in the Essex County Jail. His bail was revoked last month after he lied to the FBI about his arrest involving a rental car that had not been returned.

With the case slowly winding down, U.S. Attorney Paul Fishman would not put a figure on the cost and manhours that went into the three-year investigation and subsequent prosecutions.

"Any large prosecution, particularly one that involves this many defendants, obviously involves a substantial commitment of time and energy by a number of people in the office," he said Thursday.

However, he said, it "clearly sent a message" the office is serious about political corruption � a focus Fishman said has not changed.

"There is no question that a number of attorneys were tied up for the last two years on cases that have emanated out of Bid Rig. That meant they could not put their time into new investigations," he said. "But we have the same commitment of resources to corruption that we always have."

Meanwhile, with the ongoing court proceedings have come new details about both Dwek and the massive money laundering and political corruption investigation that broke open the morning of July 23, 2009.

Recent documents filed in U.S. Bankruptcy Court show Dwek, who was running a $400 million real estate Ponzi scheme that collapsed with his arrest, gave more than $1 million in charitable donations to a synagogue closely tied to one of his partners. Those contributions were made while Dwek was literally insolvent, with his personal tax returns showing he was losing millions more.

According to the federal bankruptcy trustee, the contributions were a sham, often made through Dwek�s American Express card, to pay off the partner he alleged was part of the Ponzi scheme. After it all collapsed, Dwek tried to pump more money into it by writing two bogus $25 million checks on a closed account to cover several loans. When he was caught, he agreed to become an informant for the government.

PREVIOUS COVERAGE:

� Ex-Hudson County undersheriff admits to reduced charge of mail fraud in federal corruption sting

� FBI informant Solomon Dwek headed back to prison after his bail is revoked

� Key witness in N.J. corruption trial arrested in Baltimore, may not testify against former Secaucus mayor

� FBI witness Solomon Dwek details his role in corruption case of Jersey City deputy mayor

Just released surveillance transcripts also provided some insight into how some were pulled into the elaborate, three-year sting operation. Those transcripts, included in motions filed in U.S. District Court on behalf of Polack and Weber, showed Dwek tried to recruit just about anybody he met into the scheme.

Dwek met the two through Rabbi Mordchai Fish, the principal rabbi of Congregation Sheves Achim in Brooklyn, who has already pleaded guilty to laundering nearly $1 million for Dwek.

On the transcripts, Fish is recorded instructing Dwek not to tell anyone the money being exchanged is dirty. "You cannot talk at all," he says.

Despite his warnings, Dwek immediately tries to talk up Polack, who operated a vending machine business. "You�ll do vending in New Jersey?" he asks.

"Sure," Polack replies.

Dwek, apparently seeing him as another mechanism to help him move cash, turns back to Fish. "Uh, Rabbi," Dwek says. "Maybe we should make his business � "

Fish interrupts him before he can finish, telling him in Yiddish: "Not now. Not on one foot (do one thing at a time)."

The next time they met, Fish cautioned Dwek not to open his mouth. "Don�t talk. Last time talking," he says in the transcript. "Don�t even say anything. The less they know, it�s gezuntah (healthy). That�s the one favor, not to talk. In and out. No business, no nothing."

Of those charged in the case, 30 have pleaded guilty. Four others were convicted at trial, two were acquitted, one died, and charges against another dismissed.

Four of the eight still awaiting trial are charged with corruption, including former Jersey City building and taxi inspector John Guarini; former Jersey City council candidate Lori Serrano; former Jersey City health officer Joseph Castagna; and Manzo. Two others are charged in connection with the money laundering end of the case � Rabbi Lavel Schwartz and David S. Goldhirsh, both of Brooklyn.

Also awaiting trial is Levy Izhak Rosenbaum, in the first criminal case ever to be brought in this country involving charges of trafficking in human organs.

Yolie Gertner, another of the alleged cash couriers in the case, remains the lone fugitive. Court filings last week revealed that Gertner had relocated to London.

Defense attorneys, meanwhile, remain highly critical of how the case evolved, some calling Dwek a one-man crime wave who enticed others into committing felonies in an effort to get out of a jam he created from himself.

The FBI had Dwek pose as a corrupt developer willing to pay off politicians and public officials willing to expedite approvals on development projects he wanted fast-tracked. At the same time, he set up former partners and others, looking to launder millions of dollars out of his bankrupt real estate empire.

Defense attorney Michael Critchley, who represented Ridgefield Mayor Anthony Suarez � one of only two people acquitted in the case � hit Dwek hard during cross-examination, called him a "dangerous witness" whose flaws are now coming back to haunt the U.S. Attorney�s office.

"It�s one thing to send out a witness like Dwek when crime is actually occurring. It�s fair game if someone�s involved in ongoing criminal matters," he complained. "I get a little concerned and frightened when you send someone like Dwek out to entice people into committing a crime."

He said he still wonders why the government didn�t use an FBI undercover agent, rather than Dwek. "Maybe they didn�t realize what they were dealing with and got blinded by the thought of the mother lode," Critchley suggested.

Fishman would not second-guess the decision to use Dwek.

"We use undercover informants all the time. Some come with more baggage than others," he said. "When we construct an investigative plan, we make sure we do it ethically, legally and correctly."

http://www.nj.com/news/index.ssf/2011/07/as_nj_corruption_cases_wind_do.html