Graft case a doozy even for New Jersey

NEW YORK — People who live in New Jersey can be forgiven if they initially yawned Thursday at news of another federal sting that swept up a wide range of public officials, including the mayor of Hoboken who's been on the job all of three weeks.

They might even have shrugged at the report that five rabbis were snared in the dragnet, reportedly for washing $3 million through an international money-laundering ring.

But body parts?

The trajectory of the latest sting, in which more than 40 people were arrested, seemed to impress even experienced investigators who, in the course of tracking mayors taking cash in diners and rabbis depositing untraceable money into the accounts of their charities, stumbled upon Levy Izhak Rosenbaum, allegedly selling human kidneys.

Rosenbaum, a Brooklyn businessman, is accused of buying kidneys for $10,000 apiece from donors in Israel and selling them to U.S. transplant recipients for $160,000, according to a federal complaint.

"I am what you call a matchmaker," Rosenbaum told undercover agents, claiming he'd been marketing kidneys illegally for 10 years, the complaint said.

Altogether, 44 people were arrested Thursday, stemming from the investigation into the sale of black-market kidneys and fake Gucci handbags that evolved into a sweeping probe of corruption in New Jersey.

Among them were 29 New Jersey public officials, including three mayors, two state assemblymen, several city council members, local commissioners and regulatory inspectors. All but one of the officeholders are Democrats.

The case is replete with tales of furtive negotiations in diners, parking lots and boiler rooms and of the passing of cash, once in a box of Apple Jacks cereal stuffed with $97,000.

"For these defendants, corruption was a way of life," Ralph Marra Jr., the acting U.S. attorney in New Jersey, said Thursday. "They existed in an ethics-free zone."

The authorities laid out two separate schemes, one involving money laundering that led to rabbis and members of the Syrian Jewish community in Brooklyn and in the Jersey Shore town of Deal, where many have summer homes. The other dealt with political corruption and bribery and involved public officials, mostly in Hudson County towns.

Linking the two schemes was the federal informant that people involved with the investigation identified as Solomon Dwek, a failed real-estate developer arrested in May 2006 on charges of passing a bad $25 million check at a bank in Monmouth County, N.J.

Dwek led investigators to the extensive network of money launderers. Dwek, a member of the tight-knit Syrian Jewish community, told targets, which included three rabbis in Brooklyn and two in New Jersey, he was trying to conceal his assets, according to people involved in the case. According to the complaint, the rabbis used registered charities linked to their synagogues to launder money from illegal goods, such as counterfeit handbags. The person wishing to "wash" illicit proceeds would write a check to the charity and receive cash, minus a handling fee of 5 to 10 percent kept by the rabbis.

All told, some $3 million was laundered for Dwek since June 2007, prosecutors said.

The money-laundering probe mushroomed into an investigation into public corruption and bribery when Dwek was introduced to a Jersey City building inspector, John Guarini, who allegedly took a total of $40,000 in bribes and introduced Dwek to another Jersey City official, Maher Khalil, deputy director of Jersey City's Department of Health and Human Services.

Dwek pretended to be a developer interested in building high-rises, but who needed expedited permits and approvals. The complaint says Khalil made the introductions to people he called "players" in restaurants around New Jersey, and the informant would then pass envelopes stuffed with cash in the parking lots afterward. The amounts were usually in the range of $10,000 to $15,000, going to housing inspectors, planning officials, health department workers and politicians.

Most of those arrested were public officials and included Mayor Peter Cammarano, 32, of Hoboken, who took office July 1, and Mayor Dennis Elwell of Secaucus, both Democrats; Assemblyman L. Harvey Smith of Jersey City, also a Democrat; and Assemblyman Daniel Van Pelt, a Republican from Ocean County.

The arrested rabbis included Saul Kassin, the chief rabbi for the Syrian Jewish community in the United States.

Material from The Associated Press and The Washington Post is included in this report.