US Rabbis, politicians caught in money laundering scheme involving Israel

Friday July 24, 2009 06:53 by Saed Bannoura - IMEMC News

A major raid by the Federal Bureau of Investigation (FBI), netted 40 well-known figures in New Jersey for money laundering and corruption, in a scheme that involved sales of Israeli kidneys in the US and other corruption rackets.

Two members of the New Jersey state legislature and three mayors were among those captured in the raid. They are accused of running a complex network of corruption that spanned a period of decades. The FBI investigation of the money-laundering ring began ten years ago, as federal agents grew suspicious of potential international money laundering by a group of charities controlled by rabbis.

The money laundering allegedly then expanded to fund a construction boom in New Jersey. As the New Jersey State Attorney described it, “It seemed that everyone wanted a piece of the action. Corruption was widespread and pervasive.” The State Attorney accused politicians of putting themselves up for sale to the highest bidder, and said that the rabbis involved in the scheme, "cloaked their extensive criminal activity behind a facade of rectitude".

Much of the laundered money originated in Israel, and was funneled through Swiss bank accounts before ending up in New Jersey. One of the schemes involved buying kidney from “vulnerable people” in Israel for $10,000, and then selling them on the US market for $160,000.

Those arrested include State legislator Harvey Smith, State legislator Daniel Van Pelt, Rabbi Eliahu Ben Haim, Rabbi Saul Kassin, Rabbi Edmund Nahum, and Rabbi Mordechai Fish.

WSJ: FBI arrests NY & NJ Rabbis running money laundering rings

by Moin Ansari

Rupee News, July 23, 2009

Besides Mr. Ben Haim, the charged rabbis include Edmond Nahum, the principal rabbi of Deal Synagogue in Deal; Saul Kassin, a rabbi at Shaare Zion Congregation in the New York borough of Brooklyn; Mordchai Fish, a rabbi at a Brooklyn synagogue, Congregation Sheves Achim, and his brother, Lavel Schwartz, also a rabbi.

Federal agents swept into New Jersey towns across several counties Thursday morning, charging 44 people–including three mayors–and religious leaders in a federal investigation into public corruption and money laundering.

Secaucus Mayor Dennis Elwell boarded a bus at the FBI building after being taken into custody in Newark.

Weysan Dun, special agent in charge of the Federal Bureau of Investigation’s Newark office, said more than 300 FBI and Internal Revenue Service agents began making arrests and executing search warrants at 6 a.m. Thursday. Those arrested in the corruption probe include Mayors Peter Cammarano III of Hoboken, Dennis Elwell of Secaucus and Anthony Suarez of Ridgefield, all Democrats; Leona Beldini, one of three deputy mayors of Jersey City, also a Democrat; and state Assemblyman Daniel Van Pelt, a Republican.

The money-laundering portion of the investigation swept up several rabbis in New York and New Jersey, according to Ralph Marra Jr., acting U.S. attorney for New Jersey.

In all, 29 people were caught up in the probe into public corruption, and 15 were implicated in the investigation into money laundering, including one Brooklyn man charged with conspiring to broker the sale of a kidney. Those arrested were expected to be arraigned in court Thursday afternoon.

The case underscores “the pervasive nature of public corruption” in New Jersey, Mr. Marra said. Corruption among the politicians, he said, was “a way of life.”

At the center of the two investigations was a single “cooperating witness” who directed by the investigators attempted to bribe officials and engage others in money laundering schemes.

Inside the Documents

From the Cammarano complaint:

“Defendant Cammarano assured the CW [cooperating witness] that ‘[y]ou can put your faith in me.’ Cammarano assured the CW that ‘I promise you . . . you’re gonna be, you’re gonna be treated like a friend.’ [I]f the CW was to ‘come over here, you know, and I wanna do, eh, I need a zone change, I need something, I wanna make sure that I, you know, you, you’re my man.’ “

Law Blog: More highlights, full text of complaints Video: FBI Arrests New Jersey Mayors, Rabbis A person familiar with the matter said the witness is an Orthodox Jewish real-estate developer named Solomon Dwek, a 36-year-old religious-school head and philanthropist from Ocean Township. In 2006, he was arrested and charged with defrauding PNC Bank out of $25 million. He was forced to seek bankruptcy protection for himself and his companies, which owned about 300 residential and commercial properties.

Mr. Dwek remained free on a $10 million bond. A lawyer for Mr. Dwek couldn’t be reached for comment.

To ensnare most of the defendants, the FBI used Mr. Dwek to attempt to bribe public officials in New Jersey, including several in Hoboken and Jersey City, according to a person familiar with the matter. The probe roped in several other real-estate developers who also wanted to bribe officials.

Mr. Cammarano, a 32-year-old who became Hoboken mayor on July 1, allegedly agreed to take $10,000 in bribes from the cooperating witness in exchange for supporting the developer’s future plans in Hoboken, the once-hardscrabble, now gentrified hometown of Frank Sinatra across the river from Manhattan. The alleged bribes occurred during Mr. Cammarano’s mayoral campaign earlier this year, according to the FBI’s complaint, which also charged an associate of Mr. Cammarano, who allegedly served as a middleman and took cash for him.

Mr. Dwek was also the key to the money-laundering probe, according to the person familiar with the matter. Under the FBI’s direction, Mr. Dwek represented himself as someone who engaged in illegal businesses and schemes including bank fraud, trafficking in counterfeit goods and concealing assets and monies in connection with bankruptcy proceedings.

In 2007, for example, Eliahu Ben Haim, the principal rabbi of Congregation Ohel Yaacob, a synagogue in the shore community of Deal, accepted a $50,000 check from the cooperating witness, which was drawn from an account held by a fictitious company set up by the FBI “for the purpose of enabling [the cooperating witness] to launder money represented to be the proceeds of illegal activities,” according to one criminal complaint. Mr. Ben Haim was named as a co-conspirator in court documents. The check was made payable to one of Mr. Ben Haim’s charitable organizations “with the expectation that the proceeds would be returned to the [cooperating witness] at a later date, minus a ten percent fee to be retained by Co-conspirator Ben Haim.”

Besides Mr. Ben Haim, the charged rabbis include Edmond Nahum, the principal rabbi of Deal Synagogue in Deal; Saul Kassin, a rabbi at Shaare Zion Congregation in the New York borough of Brooklyn; Mordchai Fish, a rabbi at a Brooklyn synagogue, Congregation Sheves Achim, and his brother, Lavel Schwartz, also a rabbi.

Women who answered the phones at Ohel Yaacob and Shaare Zion both declined to comment.

The alleged money-laundering operations run by the rabbis laundered about $3 million for Mr. Dwek since June 2007, according to the court documents and a person familiar with the matter. The rabbis used charitable, nonprofit entities connected to their synagogues to “wash” money they understood came from criminal activity, prosecutors alleged.

“The rings were international in scope, connected to Deal, N.J., Brooklyn, N.Y., Israel and Switzerland,” said Mr. Marra, the U.S. attorney, at the news conference. “They trafficked in the cleaning of dirty money all across the world.”

Levy Izhak Rosenbaum of Brooklyn was charged separately with conspiring to broker the sale of a human kidney for a transplant, at a cost of $160,000 to the transplant recipient. According to the FBI’s complaint, Mr. Rosenbaum said he had been brokering the sale of kidneys for 10 years. Mr. Rosenbaum couldn’t be reached for comment. A relative of Mr. Rosenbaum who answered the phone at an address belonging to him declined to comment.

Ed Kahrer, the supervising FBI agent on the case, said the probe began in July 1999. The investigations using Mr. Dwek began in mid-2007. A confidential informant, independently verified as Mr. Dwek, often wore a wire and was followed by FBI agents who videotaped his encounters with the probe’s targets, federal prosecutors said in a statement.

Prosecutors said the bribe-taking by public officials was connected to their fund-raising efforts in heavily contested mayoral and city-council campaigns. The bribes were often parceled out to straw donors, who wrote checks in their names or businesses to the campaigns in amounts that complied with legal limits on individual donations, prosecutors alleged. Other bribe recipients took cash for direct personal use and benefit, prosecutors said. Some of the individuals who were charged with taking bribes from Mr. Dwek didn’t win their elections.

New Jersey has been rife with political corruption for decades. Chris Christie, a Republican and former federal prosecutor, is campaigning for governor citing his long track record of winning convictions of public officials.

Gov. Jon Corzine, a Democrat who is running for re-election this year against Mr. Christie, issued a statement saying: “Any corruption is unacceptable – anywhere, anytime, by anybody. The scale of corruption we’re seeing as this unfolds is simply outrageous and cannot be tolerated.”

Mr. Corzine ran four years ago promising to quash corruption in the state. A package of proposed legislative fixes have been held up in the legislature and he has been subject to withering criticism by voters who say he failed to act on his promise.

In a move that appears to be related to the investigation, Mr. Corzine said he asked for and received the resignation of Joseph V. Doria Jr., his commissioner of community affairs. A former state Assembly speaker, Mr. Doria had purview over local-government services. He also has been leading the state Redevelopment Authority and the state Housing and Mortgage Finance Agency. Mr. Doria served as mayor of Bayonne, which lies just to the south of Jersey City, for nine years. David Bergeland, The Bergen Record/ Associated Press. .

Dozens Arrested in New Jersey Corruption Probe By SUZANNE SATALINE, AMIR EFRATI and CHAD BRAY—Steve Russolillo contributed to this article.

Write to Suzanne Sataline at suzanne.sataline@wsj.com, Amir Efrati at amir.efrati@wsj.com and Chad Bray at chad.bray@dowjones.com