TRENTON
- Attorney General Anne Milgram today announced
that a former attorney for Atlantic City has
been indicted on official misconduct charges
for assigning city tax sale certificates to
his business partner, who used them to acquire
four undeveloped properties for their real
estate investment firm. The business partner
was also indicted.
According
to Director Deborah L. Gramiccioni, the Division
of Criminal Justice obtained a state grand
jury indictment charging Joseph R. Dougherty,
45, of Ventnor, a former deputy solicitor
and counsel for Atlantic City, and his business
partner, Brian P. Curran, 49, of Ventnor,
with three counts of official misconduct and
one count of misconduct by a corporate official,
all second-degree crimes. The indictment resulted
from an investigation by the New Jersey State
Police Official Corruption Bureau and the
Division of Criminal Justice Corruption Bureau.
The indictment was voted on July 29 but handed
up in court today.
“This
is a classic case of corrupt self-dealing,”
said Attorney General Milgram. “Dougherty
acted in his official capacity, despite his
clear duty to refrain from being involved
in the transactions, to ensure that properties
that were subject to city tax liens were received
by his business partner so they could both
profit through their real estate firm. The
defendants flagrantly violated state law,
which strictly prohibits public servants from
taking official action in matters where they
have a personal or financial interest.”
Tax
sale certificates are sold by municipalities.
They enable the purchaser to foreclose and
take title to a property on which the city
holds liens for unpaid taxes. In some cases,
they are sold for the full amount of the tax
liens; in others, they are sold to the highest
bidder who meets a minimum bid. The municipality
thereby loses any claim to past unpaid taxes.
In
July 1999, Dougherty and Curran formed Bryce
Madison LLC, a real estate investment firm.
Beginning in June 1999 and continuing through
June 2002, Dougherty was employed as deputy
city solicitor in the Atlantic City Solicitor’s
Office. From 2002 through 2006, Dougherty
served as outside counsel for Atlantic City,
providing legal services on real estate and
tax matters. In both capacities, Dougherty
was responsible for tax sale matters for the
city, including handling the legal work involved
in approving and assigning tax sale certificates.
The
indictment alleges that Dougherty violated
his official duties by participating, first
as deputy solicitor and later as counsel for
Atlantic City, in the sale of city tax sale
certificates to his business partner, despite
the clear conflict of interest presented.
Dougherty approved or prepared resolutions,
which were approved by the city council, authorizing
the sale of four city tax sale certificates
that were purchased by Curran. Dougherty also
prepared the legal documents that assigned
the four certificates to Curran or, in one
instance, to their real estate investment
firm, Bryce Madison.
The
following four properties, all vacant lots,
were acquired by Curran or Bryce Madison:
18
North Connecticut Avenue (2 adjacent properties)
- Curran paid $4,000 for the two tax sale
certificates for these lots in January 2002.
As deputy solicitor, Dougherty approved the
form and legality of the resolution of the
city council authorizing the auction of the
certificates. He also prepared the legal documents
assigning them to Curran. Curran obtained
title to the properties through foreclosure
in 2004. Bryce Madison received more than
$45,000 in lease payments on the two properties
between 2006 and 2008 from the Atlantic City
Special Improvement District, which had a
warehouse for its landscaping unit adjacent
to the properties. In 2008, Bryce Madison
sold both lots to a private developer for
$110,000. Curran subsequently issued checks
payable to himself and Dougherty from the
firm’s bank account totaling $89,700.
258
North Nevada Avenue - Curran paid $2,018 for
the tax certificate for this property in December
2005. As counsel for the city, Dougherty prepared
the resolution of city council authorizing
sale of the certificate. He also prepared
the assignment that transferred the certificate
to Curran. In 2008, Curran obtained title
to the property through foreclosure and sold
it for $20,000. The sale proceeds were deposited
into a bank account of Bryce Madison, and
Curran subsequently issued checks payable
to himself and Dougherty totaling $17,600.
21
North New Jersey Avenue - Curran paid $10,797
for the tax certificate for this property,
which was assigned to Bryce Madison in December
2006. As counsel for the city, Dougherty prepared
the resolution of city council authorizing
sale of the certificate. He also prepared
the assignment that transferred the certificate
to Bryce Madison. Bryce Madison obtained title
to the property through foreclosure in July
2008. The property is currently under an agreement
of sale to a private developer.
“The
transactions chronicled by our detectives
and attorneys in the State Police and Division
of Criminal Justice present what we allege
in the indictment to be clear cases of official
misconduct,” said Director Gramiccioni.
“Dougherty was there at the start, signing
or initialing each of the tax sale certificates
in his official capacity, and he was there
at the end as he and Curran sold the properties
through their real estate firm and reaped
a profit.”
The
investigation was conducted for the State
Police Official Corruption Bureau South by
Detective John Scalabrini, Detective Anthony
Carugno and Lt. Robert Shulte. It was conducted
and coordinated for the Division of Criminal
Justice Corruption Bureau by Deputy Attorney
General Peter Lee, Deputy Attorney General
Robert Czepiel Jr., Detective John Sheeran,
Detective Edward Augustyn, Investigator Wayne
Cummings, Special Investigator Maureen Graham,
Analyst Alison Callery, and Jenny Hsu. Deputy
Attorneys General Lee and Czepiel presented
the case to the grand jury.
Second-degree
crimes carry a maximum sentence of 10 years
in state prison and a $150,000 fine. The indictment
is merely an accusation and the defendants
are presumed innocent until proven guilty.
The
indictment was handed up today to Superior
Court Judge Linda R. Feinberg in Mercer County,
who assigned it to Atlantic County, where
Dougherty and Curran will be ordered to appear
in court at a later date to answer the charges.
Attorney
General Milgram noted that the Division of
Criminal Justice Corruption Bureau has established
a toll-free Corruption Tipline: 1-866-TIPS-4CJ.
Additionally, the public can log on to the
Division’s Web site at www.njdcj.org
to report suspected wrongdoing. All information
received through the Tipline or Web page will
remain confidential.
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