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NEWARK
– Former Newark Mayor Sharpe James
was charged in an Indictment today
with using city-issued credit cards to spend
lavishly on himself, eight female companions
and others during personal trips and vacations
to such places as Martha’s Vineyard,
Rio
de Janeiro, the Dominican Republic and Puerto
Rico, U.S. Attorney Christopher J.
Christie and State Attorney General Anne
Milgram announced.
The
Indictment also charges James in a second
fraud against the citizens of Newark in
which he allegedly facilitated and approved
the drastically cut-rate sale of city-owned
land to Tamika Riley, one of his companions,
who fraudulently reaped hundreds of
thousands of dollars from the sales. She
too is charged with this fraud in the Indictment.
Following the Indictment’s return,
James, 71, surrendered voluntarily to Special
Agents
of the FBI and was scheduled to make an
initial appearance in federal court. Riley,
38,
was arrested by the FBI and was to appear
in federal court as well.
The
credit card charges – hundreds of
them between 2001 and 2006 totaling more
than
$58,000 – covered hotel rooms and
luxury suites, meals and fine dining, airfare,
car
rentals (including a Jaguar convertible),
attendance at major sporting events –
as well as a
trip to Florida to test drive a Rolls Royce
that James was considering purchasing,
according to the 33-count Indictment.
In
one instance, James used a city credit card
to make advance payments of nearly $9,000
to Norwegian Cruise Lines to allegedly secure
a penthouse suite on an annual getaway of
the James’s Civic Association. The
cruise was scheduled for six weeks after
James left
office in 2006.
The
Indictment alleges that the more than $58,000
in expenditures made on two cityissued
credit cards were for purely personal expenses,
and not legitimate, city-related
business. The Indictment alleges that James
used the credit cards for personal expenses,
despite having separately received $25,000
a year to cover such expenses. James’
annual
mayoral compensation between 1999 and 2006
ranged from more than $171,000 to
$203,000. James also earned a $49,000 annual
Senate salary.
Riley
of Jersey City is alleged to have made more
than $500,000 from the purchase and
sale of Newark properties in transactions
facilitated by James’ official intervention
as
both Mayor and State Senator. The Indictment
charges that James improperly steered
properties to Riley under a program designed
to enable experienced, financially sound
and qualified developers to buy blighted
municipally owned properties at substantially
less than market rates on the condition
that they rehabilitate the properties before
reselling
them at market prices. With James’s
help, Riley acquired the properties at cut-rate
prices and then quickly sold – or
“flipped” – at least seven
properties at much higher
prices without any rehabilitation.
According to the charges, Riley had no real
estate or construction experience; nor did
she
possess the financial wherewithal or backing
required to participate in the program.
She
was, in fact, the owner of a failed Newark
clothing store and had operated an
entertainment and public relations firm
that reported no income or assets on tax
returns in
1999 or 2000, the years before she started
flipping Newark properties, according to
the
Indictment.
Riley
also allegedly defrauded the New Jersey
Department of Community Affairs out of
housing rental assistance for her home in
Jersey City as she reaped the windfall of
property flipping, according to the charges
against her.
At
the same time, Riley raised and donated
campaign funds for James and traveled
internationally with him, enjoying vacations
and meals funded in part with the Cityissued
credit cards, according to the Indictment.
James also intervened officially on
Riley’s behalf in other ways, including
attempting to help her secure a lease from
Newark
for office space; a $25,000 state grant
for her corporation, TRI, and the sale of
the
basement level of 111 Mulberry Street, a
City property. The latter two efforts did
not
succeed.
James
and Riley are both charged with counts of
mail and/or wire fraud and other charges
(described near the end of this news release).
Both face charges that, in some instances,
carry statutory maximum prison sentences
of 20 years.
“The
allegations in this Indictment are stark
examples of the greed and arrogance of
unchecked power,” Christie said. “When
Sharpe James had a choice between enriching
himself or helping the people of Newark,
he chose self-enrichment. When he had the
choice between impartially serving the citizens
of Newark and the State of New Jersey or
rewarding companions, supporters and himself
with taxpayer money, he chose to cheat
the people of Newark and the citizens of
New Jersey.”
“The
incidents of theft and abuse detailed in
today's Indictment allege a shameless and
outrageous misuse of government funds that
are stunning in their scope,'' New Jersey
Attorney General Anne Milgram said. "While
a city struggles to balance its budget and
provide vital services to its residents,
its mayor spared no expense to entertain
himself
lavishly with public funds. Public officials
are elected to serve the public, not exploit
their positions for private gain.'”
“This
Indictment of Senator and former Newark
Mayor Sharpe James is powerful proof
that the FBI will not allow corruption to
exist in New Jersey government,” said
FBI
Special Agent in Charge Weysan Dun. “The
citizens of this state place a tremendous
amount of trust in elected officials when
they vote them into office. When elected
officials violate that trust the FBI will
be there with its investigative resources
and an
unswerving resolve to fight corruption and
greed.”
During
many of his trips and entertainment outings,
James was with one or more of his
eight female companions or other individuals
whom he treated to the same luxury
accommodations that he afforded himself,
according to the Indictment. James also
offered false justifications and pretexts
to City of Newark financial authorities
for
vacation trips that he claimed were for
city business. For the five-day trip to
Rio de
Janeiro in June 2006, during which he, a
mayoral aide and two Newark detectives stayed
in a luxury hotel, James claimed the purpose
of the trip was to meet with the region’s
Consulate General to follow up on a trip
James made there in 2004. The total charged
to
the city credit cards on that trip was approximately
$10,590, according to the Indictment.
James also claimed that a February 2006
weekend getaway to a beachfront resort in
Punta
Cana, Dominican Republic with two other
individuals was to assess the tropical gardens
on a resort property there to determine
if those gardens could be replicated near
Penn
Station in Newark. The total charged to
the city credit cards on that trip was
approximately $1,440, according to the Indictment.
James
took another trip to the Dominican Republic
a month later, this time with Riley and
others, in Boca Chica. James charged over
$2,000 for airfare and luxury accommodations
to the city credit cards for his entourage
on that trip, according to the Indictment
He also
took a city-paid trip to Santo Domingo in
2003.
The
89-page Indictment includes over 20 pages
of tables listing more than 150 instances
of credit card purchases for personal travel,
meals and entertainment. Following are just
a
few other examples alleged in the Indictment:
- More
than $1,600 for James to treat himself
and others to movies and meals dozens
of
times, always at theaters and restaurants
outside of Newark.
- More
than $3,500 for a 2003 Labor Day weekend
getaway to Martha’s Vineyard for
James, Companion 4 (as identified in the
Indictment) and others. It included hotel
room
costs and frequent restaurant charges.
(Separately, James made an advance ferry-crossing
reservation – $207 – for his
Rolls Royce and city vehicles to get to
Martha’s Vineyard for Labor Day
2004.)
-
$664 for airfare for James and Companion
1 to fly to Myrtle Beach on May 5, 2003,
to
inspect neighboring properties that they
each bought there.
- Approximately
$2,976 for the one-year rental of a public
storage unit in Hillside in June
2006. He was charged an additional $39
for exceeding the credit limit on that
city card.
-
$485 for airfare on an October 2003 trip
to Pompano Beach, Fla., to test drive
a Rolls
Royce James was considering buying (plus
$87.72 for a car rental in Florida).
-
$297 for Amtrak and meal expenses in November
2004 for James, a companion and
others to inspect a yacht that James was
interested in buying in Graysonville,
Md.
-
$741 for airfare for the same companion
to travel to Puerto Rico in April 2006
to join
James on a personal trip.
-
$600 in fees for changing airline departure
dates on the 2006 trip to Rio de Janeiro.
-
$167.22 for nightclub expenses for two
consecutive days in Rio’s “Red
Light District.”
-
$1,099 in hotel charges at the Plaza Resort
& Spa in Daytona, Fla. to attend a
tennis
tournament in August 2005. The hotel charges
included meals with a companion, Jacuzzi
and alcohol purchases.
With
respect to the Newark property fraud, the
Indictment charges that James misused his
positions as Mayor of Newark and State Senator
to improperly favor Riley and obtain
more than $500,000 in money and property
for her by steering sales of city-owned
property at steeply discounted prices to
Riley, through her company, TRI. The charges
further state that Riley, in turn, almost
always shortly thereafter sold, or “flipped,”
these
properties for lucrative profits, without
redeveloping them, as required by her contracts
with Newark.
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