Operation Bid Rig was a long-term investigation into political corruption in New Jersey conducted by the Federal Bureau of Investigation, Internal Revenue Service, and United States Attorney for the District of New Jersey from 2002 to 2014. Public corruption generally means elected or career public officials stealing public property or receiving bribes from businesses and individuals in return for special treatment.
The investigation has resulted in the indictments of more than 60 public officials and politically connected individuals since its inception. In July 2009, sting operations resulted in the arrest of 44 people in New Jersey and New York, including 29 public servants and political operatives and five orthodox rabbis from the Syrian Jewish community. A number of high-level New Jersey elected officials were arrested in the operation, including Jersey City Deputy Mayor Leona Beldini, Hoboken Mayor Peter Cammarano, Secaucus Mayor Dennis Elwell, Ridgefield Mayor Anthony R. Suarez, former Jersey City Housing Authority Commissioner and Chairwoman Lori Serrano, Jersey City Housing Authority Commissioner Edward Cheatam, Assemblyman L. Harvey Smith, Assemblyman Daniel M. Van Pelt, former assemblyman and unsuccessful mayoral candidate Louis Manzo, and political operatives Joseph Cardwell and Jack Shaw. A member of the governor’s cabinet resigned after agents searched his home, though he was not arrested.
Background Operation Bid Rig originated with investigations of public corruption among New Jersey officials in Monmouth and Ocean counties. The first phase became public in 2002 when former Ocean Township Mayor Terrance D. Weldon pleaded guilty to extorting cash from developers to influence the approval of building projects. The second phase of the investigation resulted in the February 2005 arrests of 11 elected officials in Monmouth County, who were charged with taking bribes from an undercover cooperating witness.
Operation Bid Rig II The second phase of the investigation was conducted in 2003 and 2004. Robert "Duke" Steffer, a former developer in New Jersey and Florida, solicited public officials for projects for his company, Steffer Industries Inc., which was later found to be a shell created by investigators.
The investigation snared more than 12 public officials including:
Paul Zambrano, Mayor of West Long Branch, New Jersey John Merla, Mayor of Keyport, New Jersey Paul Coughlin, Mayor of Hazlet, New Jersey Richard Iadanza, Deputy Mayor of Neptune Township, New Jersey John Hamilton Jr., Councilman, Asbury Park, NJ Joseph DeLisa, Councilman, West Long Branch, New Jersey Robert Hyer, Councilman, Keyport, NJ Raymond O'Grady, Councilman, Middletown, NJ and director of the Monmouth County, NJ motor pool Patsy Townsend, Director of Construction and Code Enforcement, Neptune, NJ Joseph McCurnin, Operations Manager for Monmouth County's Division of Transportation Thomas Broderick, Assistant Monmouth County Roads Supervisor Richard Vuola, Commissioner, Marlboro Municipal Utilities Authority, Marlboro, NJ Monmouth County Freeholder Harry Larrison Jr. died before his case came before the court.
Operation Bid Rig III
The third phase of the investigation—Operation Bid Rig III—began after an individual identified by news sources as real estate developer Solomon Dwek of Ocean Township was arrested on charges of committing $50 million in bank fraud in May 2006. Dwek, a well-known member of the Syrian Jewish community whose parents founded the Deal Yeshiva, agreed to become a cooperating witness for the FBI, infiltrating a money-laundering network connecting Israel and Syrian Jewish communities in Brooklyn, New York and Deal, New Jersey. This network has allegedly laundered tens of millions of dollars through charitable non-profit organizations controlled by rabbis in New York and New Jersey. Among the rabbis implicated are Saul J. Kassin of Congregation Shaare Zion in Brooklyn, Eliahu Ben Haim of Congregation Ohel Yaacob in Deal, and Edmond Nahum of the Deal Synagogue.
According to criminal complaints, Dwek (identified as "CW" for "cooperating witness") informed targets of the sting that he was bankrupt and trying to conceal his assets, claiming involvement in illegal businesses including the sale of counterfeit Gucci and Prada handbags, as well as insurance scams and bank frauds. The targets accepted checks made by Dwek made out to their charitable foundations and returned the money to him after deducting a fee. Much of the cash they provided him came from Israel, and some of that in turn came from a Swiss banker, prosecutors said. Prosecutors said that about $3 million had been laundered for Dwek since the beginning of the third phase of the operation in June 2007, much of the money coming from Israel.
The case shifted to focus on public corruption after one of the men accused of money laundering, Moshe Altman of Monsey, New York, a Hudson County developer, introduced Dwek to a politically connected building inspector in Jersey City, who then steered him to another city official, Maher Khalil. Khalil, who is accused of accepting $30,000 in bribes from Mr. Dwek, introduced Dwek to a web of public officials, mayoral and council candidates, and their confidants, whom he called "players"
On July 23, 2009, Acting United States Attorney for the District of New Jersey Ralph J. Marra Jr. announced the arrest of the following 44 people:
Money laundering
Eliahu Ben Haim, 58, Long Branch, NJ Schmulik Cohen, 35, Brooklyn, NY Levi Deutsch, 37, Brooklyn, NY Yeshayahu Ehrental, 65, Brooklyn, NY Mordchai Fish, 56, Brooklyn, NY Yolie Gertner, 30, Brooklyn, NY David S. Goldhirsh, 30, Brooklyn, NY Shimon Haber, 34, Brooklyn, NY Saul Kassin, 87, Brooklyn, NY Edmund Nahum, 56, Deal, NJ Abe Pollack, 40, Brooklyn, NY Lavel Schwartz, 57, Brooklyn, NY Binyomin Spira, 28, Brooklyn, NY Naftoly Weber, 40, Brooklyn, NY Arye Weiss, 34, Brooklyn, NY
Human organ trafficking
Levy-Izhak Rosenbaum, 58, Brooklyn, NY
Political corruption
Moshe Altman, 39, Monsey, NY Charlie Ammon, 33, Lakewood, NJ Leona Beldini, 74, Jersey City, NJ Peter Cammarano, 32, Hoboken, NJ Joseph Cardwell, 68, Jersey City, NJ Joseph Castagna, 53, Jersey City, NJ Guy Catrillo, 54, Jersey City, NJ Edward Cheatam, 61, Jersey City, NJ Dennis Elwell, 64, Secaucus, NJ Itzak Friedlander, 41, Union City, NJ Richard Greene, 45, Jersey City, NJ John Guarini, 59, Bayonne, NJ Denis Jaslow, 46, Wall, NJ Maher A. Khalil, 39, Jersey City, NJ James P. "Jimmy" King, 67, Jersey City, NJ Louis Manzo, 54, Jersey City, NJ Michael Manzo, 53, Jersey City, NJ Ronald Manzo, 65, Bayonne, NJ
Michael Schaffer, 58, Hoboken, NJ Lori Serrano, 37, Jersey City, NJ Jack Shaw, 61, Jersey City, NJ L. Harvey Smith, 60, Jersey City, NJ Anthony R. Suarez, 42, Ridgefield, NJ Vincent Tabbachino, 68, Fairview, NJ Daniel M. Van Pelt, 44, Waretown, NJ Mariano Vega, Jr., 59, Jersey City, NJ Lavern Webb-Washington, 60, Jersey City, NJ Jeffrey Williamson, 57, Lakewood, NJ
Jersey City councilman Philip Kenny, while not one of the original 44 arrested, nevertheless pleaded guilty to taking $5,000 in bribes on October 6, 2009.
Organ trafficking Levy Izhak Rosenbaum of Brooklyn was alleged to have been conspiring to arrange the sale of an Israeli citizen's kidney for $160,000. According to the complaint, Rosenbaum told the cooperating witness that he had been involved in the illegal sale of kidneys for 10 years. Acting US Attorney Ralph Marra said "His business was to entice vulnerable people to give up a kidney for $10,000 which he would turn around and sell for $160,000". Anthropologist and organ trade expert Nancy Scheper-Hughes claimed that she had informed the FBI that Rosenbaum was "a major figure" in international organ smuggling 7 years ago, and that many of Rosenbaum's donors had come from Eastern Europe. This is the first organ trafficking case in U.S. history. In October 2011, Rosenbaum pleaded guilty to three counts of organ trafficking and one count of conspiracy.Guilty Plea to Kidney-Selling Charges - The New York Times, 27 October 2011
Fallout from arrests One of the 44 defendants, political operative Jack Shaw, was found dead in his Jersey City apartment on July 28, 2009. His death was suspected to be a suicide.
Some officials have been sentenced and are serving time in prison. Two were found not guilty. Many have their sentences pending after a federal appeals court judge threw out sentences of extortion based on the Federal Hobbs Act.Hayes, Melissa, Judge tosses Hobbs Act charges against former Hudson assemblyman Lou Manzo and his brother, The Jersey Journal, May 18, 2010 Prosecutors have decided not to appeal that decision,Spoto, Mary Ann, U.S. attorney won't appeal dropped charges against ex-Assemblyman Lou Manzo, brother, The Star-Ledger, May 5, 2011 and they are now reviewing several cases.Conte, Michaelangelo, Hearing on status of five Jersey City political figures in various stages of being prosecuted..., The Jersey Journal, March 17, 2011 Other defendants are currently on trial or awaiting trial.
Charges dismissed
In May 2010, U.S. District Court Judge Jose L. Linares dismissed counts of extortion under the Federal Hobbs Act against Louis Manzo and his brother Ronald Manzo, ruling that the act only applies to elected officials. Louis Manzo then faced two counts of violating the Travel Act, charging him with crossing state lines to commit a crime, and two counts of failing to report to authorities that others were collecting bribes. On February 17, 2012, all remaining charges against Louis Manzo were dismissed by Linares.
Sentenced Solomon Dwek pleaded guilty in October 2010, in federal court in Newark to one count each of money laundering and bank fraud charges amounting to about $50 million. Standing before U.S. District Judge Jose L. Linares, Dwek answered questions on attempting to defraud PNC Bank. On October 18, 2012, Dwek was sentenced to six years in federal prison for his conviction on bank fraud charges. The following day, he received a sentence of four years in state prison for the separate fraud charges before the New Jersey Superior Court in Monmouth County. He will serve the two prison terms concurrently.
Moshe "Michael" Altman, Union City real estate developer was sentenced to 41 months in prison for money laundering through the charity Gmach Shefa Chaim.Union City developer ensnared in Operation Bid Rig III sentenced to 41 months in prison, The Jersey Journal, March 31, 2011 He pleaded guilty to 15 separate instances of money laundering in which he pocketed more than $100,000. Itzhak Friedlander, another Hudson County developer involved with the charity, was sentenced to two years in prison for his role in the money laundering sting.Sherman, Ted, Hudson County investor gets 2 years in prison for conspiring to launder nearly $200K, The Star-Ledger, April 14, 2011 Shimon Haber, a Brooklyn developer, pleaded guilty to conspiracy charges related to the money launderingHayes, Melissa, Union City real estate developer pleads guilty to laundering money as part of last year's massive sting operation, The Jersey Journal, December 2, 2010 and was sentenced to 10 months' detention—five in prison and five at home.Ray, Joe, Shimon Haber, who pleaded guilty in N.J. corruption bust, gets five months in prison, The Star-Ledger, May 25, 2010
Peter Cammarano III, former Hoboken Mayor stepped down as Mayor and was found guilty on August 5, 2010, and given two years in prison.Sherman, Ted, Former Hoboken Mayor Peter Cammarano gets 2 years in prison for taking bribes, The Star-Ledger, August 5, 2010 He entered prison in October 2010.
Catrillo entered a guilty plea and was fired by the City of Jersey City. He was sentenced to 18 months in prison, and fined $4000. He entered federal prison in March, 2010.