N.J. corruption case witness joins rogue's gallery

N.J. corruption case witness joins rogue's gallery

Publication: AP
Date: December 26, 2009

One man ran a Mafia-controlled brokerage that fleeced investors out of millions. Another was an admitted drug user who once ordered a murder. Yet another operated a Ponzi scheme right under the nose of his employer — the U.S. government.

To that rogue's gallery of federal snitches add the name of Solomon Dwek, the failed New Jersey real estate tycoon at the center of the biggest corruption sting in the state's history.

When Dwek takes the witness stand, possibly as early as next month, the success of the government's cases against potentially dozens of defendants will hinge on whether prosecutors can persuade a jury to believe a man who recently pleaded guilty to a $23 million bank fraud.

"Jurors don't like it when the government's star witness is a far worse criminal than the people he's testifying against," said Bradley Simon, a white-collar criminal defense attorney and former federal prosecutor.

Forty-four people were arrested in New Jersey in July, about half of them public officials accused of accepting money from Dwek in exchange for helping him gain zoning approvals and other permits for fictitious building projects. The U.S. Attorney's Office did not return a message seeking comment on Dwek's criminal history.

While prosecutors in New Jersey have a perfect record in corruption cases this decade — nearly 150 people have pleaded guilty or been convicted — the challenge in prosecuting the cases that make up Operation Bid Rig is multilayered.

Aside from Dwek's recent guilty plea, he faces lawsuits stemming from an alleged real estate Ponzi scheme in which he and others are accused of forging the signatures of unsuspecting property owners.

Jurors likely will hear defense attorneys argue that rather than reporting on existing criminal activity, Dwek was a government-sponsored instigator who helped create the crimes with which others now are charged.

Without evidence that Dwek and the defendants knew each other previously, it can be more difficult for prosecutors to use what attorney Rocco Cipparone calls the "association argument."

"This isn't a situation of like-minded people hanging out with each other," said Cipparone, whose clients have included one of the five men convicted of plotting to kill soldiers at Fort Dix in 2006. He is not representing any Bid Rig clients. "If an informant is injected into the situation cold, you've lost the potency of that argument."

Here's the other thing about government witnesses: Unsavory as they may be, they usually earn convictions.

Some of the colorful characters who have graced area courtrooms in recent years include:

— Besnik Bakalli and Mahmoud Omar, who helped the government win convictions in the Fort Dix case last year — but not before admitting smoking marijuana, ordering a killing and engaging in bank fraud (Omar) and shooting a man in a family feud (Bakalli).

— Mohammed Habib "Haji" Rehman, the star witness in a 2005 terrorism case against London merchant Hemant Lakhani. Rehman testified he'd been paid between $250,000 and $300,000 by the U.S. government over a five-year period. Post-9/11 sensibilities may have allowed jurors to ignore a former Drug Enforcement Administration agent's testimony that Rehman was "a dishonest individual and liar" when they convicted Lakhani of attempting to broker the sale of shoulder-launched missiles to shoot down airliners.

— Bergen County con man Thomas Giacomaro, who helped the government convict several former business partners in the 1990s but later was sentenced to 14 years in federal prison and ordered to pay more than $69 million in restitution for running a Ponzi scheme while he was under FBI supervision.

Not all government cooperators were successful.

Secret recordings made by crooked Colts Neck stockbroker Jeffrey Pokross at his Mafia-controlled Wall Street firm led to the arrest of 120 people in 2000 in the largest securities fraud bust in U.S. history. The vast majority pleaded guilty, but several who went to trial were acquitted.

In one trial involving six defendants charged with bribing union officials to funnel hundreds of millions in pension funds into corrupt investments, Pokross spent a staggering 18 days on the witness stand, much of it under sustained attack from defense attorneys.

That trial could provide a playbook for both sides in the current cases in New Jersey.

"For the jury, it wasn't so much, 'We didn't believe Pokross,"' recalled attorney Gerald Shargel, who won an acquittal for San Francisco financial adviser William Stephens and who also represents a defendant in Operation Bid Rig. "The defense was entrapment, and that started with the proposition that, 'Yes, these things were said and these meetings occurred,' but they showed Pokross all over Stephens, promising him great riches and coming back again and again."

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