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New Jersey criminal corruption sting largest in history

By Michael Webster: Investigative Reporter syndicated. 3 November 2009 7:30 PT

Solomon Dwek, wire wearing FBI informant turned witness for the federal government in the largest New Jersey criminal corruption sting in its history emerged recently from the federal protection program long enough to plead guilty in a 50 million U.S. dollar bank fraud. Dwek, 37, pleaded guilty in federal court in Newark to one count each of money laundering and bank fraud charges that could put him in jail for up to 11 years.
As Mr. Dwek stood before U.S. District Judge Jose L. Linares in Newark in his less than 30-minute appearance he entered pleas to separate counts of bank fraud and money laundering in connection with two counterfeit checks totaling more than 50 million U.S. dollars that he tried to deposit at PNC Bank.
"I'm guilty your honor," he declared, firmly and without hesitation. Later in Monmouth County, scene was repeated before Superior Court Judge Thomas Scully in Freehold, where Dwek pled to similar state charges.
Many people know about who Dwek really is and wants to know more about him and the explosive details about his private con schemes and his role as a cooperating witness in one of the largest ongoing federal corruption investigation in which Finally, some details have begun to come to light.
2006 system is how Dwek originally came to the attention of federal prosecutors, who then made him a informant. Following his arrest, Dwek apparently spent 29 months as a cooperating witness, establishment rabbis and others in the religious community, as well as leaders which included incumbent mayors, current political candidates and public officials on charges ranging from political corruption, money laundering in an undercover sting operation that prosecutors have called unprecedented.
Allegedly Dwek snared 45 people in the string of 45, as seven – all from Hudson – have pleaded guilty. Those who have been arrested and say they are innocent include the former mayors of Hoboken and Secaucus.
The U.S. Attorney's office issued an advisory just before the hearing in which Dwek guilty says only that "a central figure" in the July 23 arrest of 45 persons on public corruption and money laundering charges appear in federal court before U.S. District Judge Jose L. Linares in Newark. A spokesman for the agency declined to answer questions. Dwek's lawyer did not return calls to our office. Dwek is described in almost all criminal complaint, and every indictment as a "cooperating witness who had been indicted for bank fraud", but his name never appears in court records and he has not appeared in public in a court as a witness, then sting began. The first trial of the accused in corruption sting is scheduled for January 2010, and Dwek expected to be the main witness in the case.
In less than four years, Dwek has gone from a highly respected real estate Mogul with a 300 million U.S. dollars empire in seven states to an FBI informant, community and outcast confessed criminal.
The following was reported in The Daily Record ":
… The subjects of arrests also religious leaders from the Syrian Jewish enclaves in Brooklyn, Deal and Elberon. Sources said the IRS and the FBI this morning seized documents from Deal yeshiva and Ohel Yaacob Synagogue on Ocean Avenue in Deal.
The Deal yeshiva is a religious school, which educates children in the Sephardic Jewish tradition, The yeshiva has two separate divisions: a boys school on Logan Road in Ocean Township and girls school on Wall Street in West Long Branch.
The school was founded more than 20 years ago by Rabbi Isaac Dwek and Raizel Dwek, Solomon Dwek parents, of Ocean Township. Rabbi Dwek was the school's President, Raizel and was its treasurer until 2006, when their son's real estate empire began to crumble after Dwek deposited a bad $ 25.2 one million a look at a drive-through window at The PNC Bank in Eatontown. …
Now the second wave of stories that suggest that Dwek may actually be the central witness in numerous other arrests.
Here is a report from Bloomberg:
… The cooperating witness Solomon Dwek, a real estate developer in Monmouth County, New Jersey, was charged May 11, 2006, with scheming to defraud PNC Bank out of 50 million U.S. dollars, according to a person familiar with the proceedings and court records.

Prosecutors claimed that Dwek deposited two checks 25 million U.S. dollars from a another account of his who had a zero balance. Dwek then wired $ 22.8 million from PNC, falsely secure bank officials that he would send funds to cover overdrafts, according prosecutors.

Dwek posted a $ 10 million bond, secured by $ 3 million in equity in the homes of his mother-in-law and sister-in-law. Dwek was never indicted, instead receive 17 enlargements from a judge to continue the period during which his case would be presented to a federal grand jury. …
An Asbury Park Press investigation revealed that people who knew Dwek say that he was wealthy, private, quiet, easy going and a pillar of society. Business relationships believed him to be a respected leader of a religious school, a successful real estate investor, a philanthropist and a devoted father of five. But according to court documents Dwek's real estate empire may have been built on a underpinnings of crime, which included money laundering, bank fraud and lies.
How could his empire expand as quickly and collapse even faster? And how could the big banks, lenders, investors and even family members been so blind to give millions of dollars to a man they now say owe them more than 338 million dollars?
Star Ledger:
Star Ledger reported that the review of court documents that showed before Dwek was an informant for the FBI, he was running a Ponzi wild-operation where an investment was used to pay off mounting debts from the past and into the millions in the same kind of geometry that ultimately exposed financier Bernard Madoff. The documents there also seems to show that when Dwek turned informant, he was so good at his work – money laundered to religious leaders, bribe-taking developer politicians – that some of his targets seemed to be as good as throwing money at him.
In an amended bankruptcy, Dwek disclosed nearly $ 500,000 in 20 separate secret payments:
There was $ 75,100 from a former partner, "left in a garbage bag behind his office."
And another $ 28,400, labeled as "kickbacks for sale of Florida property. "
About $ 9,000 in deposits left on a canceled contract for two condominium units located in Miron, Israel.
And $ 5,000, which was listed as "fictitious charitable donations given through Solomon Dwek's American Express card."
According to other court filings, investors were also made to believe that Dwek would buy properties and flip them at the same time, sales for what turned out to be fictitious third party for a higher price.
In another part of the scheme described in a series of lawsuits filed by the administrator, Dwek allegedly paid Eli Seruya, Comptroller of his uncle's business, to facilitate the fraudulent deals are being made through the company. Trustee out gifts to Seruya of a new Lexus, part payment of nine condominiums in Israel, and transfers via Dwek's American Express account in excess of $ 1.3 million for a synagogue, where the controller's brother was a rabbi, and he had access to their accounts, and had the ability to write checks to himself, the court documents charge.

The payments which mainly came from people who were created by Dwek. And the money went directly to the Fed, the documents show. The inputs of Dwek's own words, was included in the amended petition because Act all assets into account, although it seems that if the money came from a sting, and were forwarded to the Feds.
These payments were detailed on a modification of original Dwek bankruptcy to correct the list of assets he held, and was described in amazingly honest language. Included were checks coming out of Florida and several Israeli fixed property deals, some involving partial payments to Eliahu Ben Haim principle Rabbi of Congregation Ohel Yaacob Deal. Ben Haim was among those charged in July with money laundering. Another $ 15,300 came out of a $ 20,000 cancellation agreement that involved Ben Haim and Moshe "Michael Altman," a Hudson County developer who, according to the criminal complaints, "washed" more than $ 600,000 in dirty cash for control of Dwek through charitable, non-profit enterprises.

The most curious – and still unsolved – Payment included in the new asset list filed with the court was $ 75,100 in cash from Barry Kantrowitz, a Monmouth County real estate broker who represented Dwek in numerous real estate transactions. According to the application, the cash was left in a trash bag behind the broker's office.
Dwek's bankruptcy lawyer, Timothy Neumann, would not elaborate on the filing.
"I am not at liberty to talk about it. The document speaks for itself," he said.

In court Dwek admitted he schemed with a mortgage broker Joseph Kohen, 39, Deal to defraud PNC Bank of more than 50 million U.S. dollars and launder $ 22.8 million of proceeds through other banks.
Kohen pleaded guilty in the case in March 2007. His sentencing is pending.
Court records describe its business as a multimillion-dollar fraud orchestrated by Dwek defrauded by friends and even his uncle on fraudulent land deals.
His property was basically a shell game. He used money from investors to repay others, cover the deficit of the "Bleeder" properties that did not generate the revenue needed to cover transaction costs, taxes or mortgage payments, and also to make charitable donations, according to filings by Charles Stanziale, the court-named administrator in the case.
"Dwek was able to raise money from new investors by providing false profits to earlier investors and create an illusion that he was a success, philanthropic real estate Mogul who delivered incomparable return on investment, "said Stanziale in court papers.
The Ponzi scheme finally together as a house of cards after the HSBC Bank, which gave Dwek with a $ 25 million bank overdraft, late have a title search and discovered that it was not mortgages on properties in the country thought it was financing on behalf of Dwek in Neptune. According to court documents, Dwek already owned properties. When the bank finally began to look at property records, red flags went up, said Stanziale in the right applications.
Most of the defendants charged in string operation maintains them and the government, which cheated by Dwek and as a result federal authorities framed "innocent people" to avoid a long prison.
Dwek made as a developer, secretly recorded interviews and so-called payments to officials, involving proposed projects, and he recorded several rabbis in New York and New Jersey, along with others in their religious society, with respect to suspected money laundering.
The lawyers claim Dwek fictional cases for the FBI, all hoping to avoid a lengthy prison sentence.
"I believe that a jury will look at tape and Dwek, and they will come to the conclusion that only one guilty of criminal conduct is Dwek. He is one of the most vilified criminal defendants we have had in the past decade, and the government wants to erase all his bad behavior – even things that he has not been charged – to make him their star witness, "said Robert Fuggi, a lawyer for the Assembly husband Daniel Van Pelt.
Other lawyers said Dwek own misdeeds, which remains untangled by federal prosecutors, tower over of the alleged crimes of their clients and bands in corruption case shows Dwek to extort money from people – not public officials asking him to yield.
"When there is an undercover informant, he would be the detection of crime is happening. In case of assembly man Van Pelt and many others, was that not happening. Dwek fabricated crime not revealed the crime. He was the instigator of crime, and he tried to entrap Van Pelt and others, "said Fuggi.
Prosecutors However, regular attention entrapment defenses rarely succeed in court.
Willis said federal prosecutors could try to test some customers without Dwek to avoid to open a "Pandora's box". It would be difficult and unusual, say several former federal prosecutors.
"He almost has to witness, "said John J. Fahy, a former political corruption chief at the U.S. Attorney's office office in Newark.
For jurors to hear tapes of alleged corruption, there must be no witnesses whether they are legitimate, and Dwek is likely to be the best to do it, "said Mark Rufalo, former head of organized crime strike force in the U.S. Attorney's office.
"The U.S. lawyers gave him his Chanukah gift early this year. He looks realistic to have only five years (in prison) and it is pretty lenient, "says lawyer Peter Willis, who represents the Assembly man L. Harvey Smith and Jersey City Deputy Mayor Mariano Vega.
Sources:
U.S. District Court in Newark
FBI
PNC Bank
Monmouth County Superior Court
The Daily Record
Bloomberg
An Asbury Park Press
Star-Ledger
Robert Fuggi Lawyer
John J. Fahy, a former political corruption chief at the U.S. Attorney's office in Newark.
Mark Rufalo, former head of organized crime strike force in the U.S. Attorney's office office.
Defense Lawyer Peter Willis

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