|TRENTON – Attorney General Jeffrey S. Chiesa announced that New Jersey Assemblyman Robert Schroeder (R-Bergen) was indicted today for allegedly stealing more than $1.8 million from individuals who loaned him money for a business venture in North Dakota, and writing more than $3.4 million in bad checks to other creditors who loaned him money or provided goods and services for his various companies, including All Points International Distributors, Inc., which sold tents and prefabricated buildings to the U.S. military.
The Division of Criminal Justice today obtained a three-count state grand jury indictment charging Schroeder, 52, of Washington Township (Bergen County), with issuing bad checks, theft by deception, and misconduct by a corporate official. The charges are all second-degree offenses which carry a sentence of five to 10 years in state prison and a fine of up to $150,000. The charges resulted from an investigation by the New Jersey State Police Official Corruption Bureau and the Division of Criminal Justice Corruption Bureau.
“We allege that as the financial house of cards he built collapsed, Schroeder lied and stole in an attempt to prop it up, defrauding creditors of in excess of $5 million, between his theft of loan funds and passing of bad checks,” said Attorney General Chiesa. “This indictment, which would carry a substantial prison sentence upon conviction, demonstrates that nobody is above the law.”
“I commend the detectives and attorneys who have skillfully handled this complex, high-profile financial fraud case,” said Director Stephen J. Taylor of the Division of Criminal Justice. “To secure this indictment, they assembled extensive financial evidence and diligently pursued the complaints of the many individual lenders who, we allege, trusted Schroeder because of his public stature, only to lose millions of dollars.”
“By allegedly writing bad checks and defrauding lenders, Assemblyman Schroeder has betrayed the public trust,” said Colonel Rick Fuentes, Superintendent of the State Police. “This indictment, which is the product of a cooperative investigation by the State Police and Division of Criminal Justice, sends a clear message that the rules are the same for everyone.”
The indictment alleges that Schroeder wrote at least 47 bad checks totaling at least $3,431,150 to 12 individuals who loaned him funds for ventures involving his various businesses, and to two companies that provided him with goods or services. He allegedly knew that the bank accounts against which he wrote the checks did not have sufficient funds to cover them.
The indictment further alleges that Schroeder stole funds from at least five individuals, identified in the indictment only by their initials, whom he persuaded to loan him at least $1,887,000 for a purported venture involving another company he formed, Hercules Global Logistics, LLC, to supply permanent and temporary housing for an oil drilling project in North Dakota. It is alleged Schroeder used the money to pay personal expenses and other debts not associated with the project.
All Points International Distributors sells tents, tarpaulins, building components, prefabricated and portable buildings, and other prefabricated structures. Historically, most of its business was with the U.S. military, with contracts providing for such items to be delivered to Afghanistan, Iraq, and other international locations. The state’s investigation revealed that the business began to decline after government contracts dropped off. Schroeder allegedly tried to sustain the company by seeking numerous short-term loans from individuals who were promised a high rate of return. As he fell behind on those loan payments, between October 2009 and August 2012, he allegedly wrote the bad checks.
Later, in January 2012, Schroeder allegedly began to raise funds by soliciting individuals for loans for a new project in North Dakota. He established Hercules Global Logistics, which he said would supply permanent and temporary housing units – and offer catering, design and other services – to establish and maintain a base camp for an oil drilling project. Schroeder allegedly claimed he expected to complete the housing project, which he named the Washington Dakota Lodge or Watford Lodge, by the end of 2012. It is alleged that Schroeder instead diverted the funds for personal expenses and other debts.
Schroeder was initially charged by complaint-summons on Aug. 3 with passing bad checks. At that time, detectives executed search warrants at Schroeder’s home and at a business facility at Prospect Place and Piermont Avenue in Hillsdale which serves as headquarters for All Points and Hercules Global Logistics. The state also obtained a court order to seize a number of bank accounts maintained and controlled by Schroeder in various business names. In addition to All Points and Hercules, Schroeder operates RS Consultants, LLC, a property management firm, and RGS Bergen, LLC, a company he set up for one of his investment properties. All four of his companies are also charged in the indictment.
Prior to being charged in this investigation, Schroeder was Deputy Republican Whip of the New Jersey General Assembly. He represents the 39th Legislative District, which includes portions of Bergen and Passaic counties. He was elected to the General Assembly in 2010.
Deputy Attorneys General Veronica Allende and Perry Primavera presented the case to the state grand jury for the Division of Criminal Justice Corruption Bureau. The investigation was conducted by Detective Brian Murphy, Detective Sgt. Lisa King, and Detectives Patrick Squitieri, Kenneth Lutz and Craig Pokrywa of the New Jersey State Police Official Corruption North Unit; Investigator Michael La Chapelle of the New Jersey Bureau of Securities; and Deputy Attorneys General Allende and Primavera, and Analyst Kathleen Ratliff of the Division of Criminal Justice.
The indictment was handed up to Superior Court Judge Mary C. Jacobson in Mercer County, who assigned it to Somerset County, where Schroeder will be ordered to appear for arraignment at a later date. The indictment is merely an accusation and the defendant is presumed innocent until proven guilty.