44 arrested in N.J. corruption probe

updated 7:26 p.m. ET July 23, 2009

NEWARK, N.J. - An investigation into the sale of black-market kidneys and fake Gucci handbags evolved into a sweeping probe of political corruption in New Jersey, ensnaring more than 40 people Thursday, including three mayors, two state lawmakers and several rabbis.

Even for a state with a rich history of graft, the scale of wrongdoing alleged was breathtaking. An FBI official called corruption "a cancer that is destroying the core values of this state."

Federal prosecutors said the investigation initially focused on a money laundering network that operated between Brooklyn, N.Y.; Deal, N.J.; and Israel. The network is alleged to have laundered tens of millions of dollars through Jewish charities controlled by rabbis in New York and New Jersey.

Prosecutors then used an informant in that investigation to help them go after corrupt politicians. The informant — a real estate developer charged with bank fraud three years ago — posed as a crooked businessman and paid a string of public officials tens of thousands of dollars in bribes to get approvals for buildings and other projects in New Jersey, authorities said.

All but one are Democrats
Among the 44 people arrested were the mayors of Hoboken, Ridgefield and Secaucus, Jersey City's deputy mayor, and two state assemblymen. A member of the governor's cabinet resigned after agents searched his home, though he was not arrested. All but one of the officeholders are Democrats.

Also, five rabbis from New York and New Jersey — two of whom lead congregations in Deal — were accused of laundering millions of dollars, some of it from the sale of counterfeit goods and bankruptcy fraud, authorities said.

Those arrested include:

• Hoboken Mayor Peter Cammarano III, charged with accepting $25,000 in cash bribes from an undercover cooperating witness.
• Assemblyman L. Harvey Smith, charged along with an aide of taking $15,000 in bribes to help get approvals from high-level state agency officials for building projects.
• Assemblyman Daniel Van Pelt, charged with accepting a $10,000 bribe.
• Secaucus Mayor Dennis Elwell, charged with taking a $10,000 bribe.
• Ridgefield Mayor Anthony Suarez, charged with agreeing to accept a $10,000 corrupt cash payment for his legal defense fund.
• Former Assemblyman Louis Manzo, charged with taking $27,500 in corrupt cash payments for use in his failed Jersey City mayoral campaign.
• Jersey City Deputy Mayor Leona Beldini, charged with taking $20,000 in illegal campaign contributions.
• Eliahu Ben Haim, a rabbi at a synagogue in Deal, N.J., charged with money laundering.
  Saul Kassin, the chief rabbi of a synagogue in Brooklyn, charged with money laundering.
• Edmund Nahum, the principal rabbi of a synagogue in Deal, charged with money laundering.
• Mordchai Fish, a rabbi at a synagogue in Brooklyn, charged with money laundering of proceeds derived from criminal activity. His brother Albert Schwartz, also a rabbi, was charged as well.

Those arrested included Levy Izhak Rosenbaum of Brooklyn, who was charged with conspiring to arrange the sale of an Israeli citizen's kidney for $160,000 for a transplant for the informant's fictitious uncle. Rosenbaum was quoted as saying he had been arranging the sale of kidneys for 10 years.

The politicians arrested were not accused of any involvement in the money laundering or the trafficking in human organs and counterfeit handbags.

'Problem is one of the worst'
The number of arrests was remarkable even for New Jersey, where more than 130 public officials have pleaded guilty or have been convicted of corruption since 2001.

"New Jersey's corruption problem is one of the worst, if not the worst, in the nation," said Ed Kahrer, who heads the FBI's white-collar and public corruption division. "Corruption is a cancer that is destroying the core values of this state."

Gov. Jon Corzine said: "The scale of corruption we're seeing as this unfolds is simply outrageous and cannot be tolerated."

Hours after FBI agents seized documents from his home and office, New Jersey Community Affairs Commissioner Joseph Doria resigned. Federal officials would not say whether he would be charged. Doria did not return calls for comment.

The informant, whose name was not released, was the hinge between the two investigations. He gave prosecutors information about the money laundering operation, and later, at the direction of the FBI, drew on his background to go after politicians.

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