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protection long enough today to plead guilty to a $50 million bank fraud. But even as Solomon Dwek stood fidgeting before a judge in a perfunctory 30-minute appearance, explosive new details about his private con schemes and his role as the cooperating witness in the ongoing federal corruption investigation were coming to light.
Tony Kurdzuk/The StarLedgerSolomon Dwek is led out of the courtroom after pleading guilty to misconduct by a corporate official this afternoon at the Monmouth County Courthouse in Freehold. 7 0 13Share • Solomon Dwek's brief, 'scrupulously managed' court appearances hints at role in N.J. corruption trials • Full Star-Ledger coverage of the New Jersey corruption probe A Star-Ledger examination of court documents shows that before Dwek became an informer for the FBI, he was running a wild Ponzi operation in which one investment was being used to pay off the debt mounting from the last one and on into the millions in the same kind of geometry that eventually exposed financier Bernard Madoff. The documents also seem to show that once Dwek turned informant he was so good at his work — money launderer to religious leaders, bribe-taking developer to politicians — that some of his targets seemed to be virtually throwing money at him. In an amended bankruptcy petition, Dwek disclosed almost $500,000 in 20 separate secret payments: There was $75,100 from a former partner, "left in a garbage bag behind his office." And another $28,400, labeled as "kickbacks for the sale of Florida properties."
he began his role as an undercover informant in what turned into a widespread money laundering and public corruption probe. corruption probe." stated Stanziale in court papers. According to the court filings. Dwek — the son of a prominent rabbi in the Sephardic Jewish community in Deal — appeared to be a successful real estate investor. were included in the amended petition because by law all assets must be accounted for. ." The payments mostly came from people who were set up by Dwek. seemingly worth millions. and also to make charitable donations.000 that were listed as "fictitious charitable donations given through Solomon Dwek’s American Express card. pleads guilty Before his arrest. Not long after. taxes or mortgage payments. Dwek began cooperating with the government after being charged in 2006 in connection with a bank fraud tied to the Ponzi scheme. The entries. He used money from investors to repay others.J.000 in deposits returned on a cancelled deal for two condominium units located in Miron. and has sparked some 120 lawsuits. key witness in FBI's N. investors were led to believe that Dwek would buy properties and simultaneously flip those sales to what turned out to be fictitious third parties at a higher price. it has become clear from filings in the bankruptcy case that it was all a mirage. His real estate properties were basically a shell game. it seems if the money came from a sting and was passed on to the Feds. eventually leading to dozens of arrests of rabbis. before he started buying and selling properties with abandon. according to filings by Charles Stanziale. giving generously to charitable organizations and political candidates. even. the documents show. And the money went straight to the feds. political candidates and public officials last July. And $5. Court records describe his business enterprise as a multi-million-dollar scam orchestrated by Dwek who cheated friends and even his own uncle on fraudulent land deals. Solomon Dwek. philanthropic real estate mogul who delivered incomparable investment returns.Some $9. The bankruptcy proceeding involves the liquidation of more than 350 properties he had once owned. But while Dwek had held himself out to be a wealthy real estate investor. cover shortfalls on so-called "bleeder" properties that did not generate the income needed to cover carrying costs. in Dwek’s own words. the court-named trustee in the case. "Dwek was able to raise money from new investors by delivering false profits to earlier investors and creating an illusion that he was a successful. mayors. Israel. He was a high school graduate who had gone to rabbinical school for two years.
m. red flags went up. the account was immediately credited and the next morning. His attorney did not return calls to his office.076 check. the comptroller of his uncle’s business. he checked by telephone access to see if the money was there. he began wiring funds out of the account. Dwek went to the PNC bank in Eatontown and pulled to the drive-up window with a bogus $25. which provided Dwek with a $25 million credit line. While the check was drawn on an account he controlled. Accompanied by his father.212. as the Ponzi scheme began to falter and financial pressures started spilling over to others.8 million. the court records claim. Within hours. According to court documents. Dwek made four payments totaling $22. The largest was made to HSBC Bank to repay the money they were demanding back. Franco demanded: "THE $ IS STILL NOT IN MY ACCOUNT. repeatedly threatened Dwek in a series of e-mails. Dwek allegedly paid off Eli Seruya. He assured a reluctant PNC employee that "corporate" had agreed to reopen the account and that funds to cover the check would soon arrive by wire transfer. That same day. HSBC called in Dwek to a meeting at the bank’s office in New York in April 2006 and demanded the money be repaid. the account had been closed and had no money in it.In another part of the scheme described in a series of lawsuits filed by the trustee. PNC knew it had been defrauded and tried unsuccessfully to reverse the wire transfer. Dwek was warned: "I STILL DO NOT HAVE ANYTHING IN MY ACCOUNT! THEY ARE CALLING ME EVERY 5 MINUTES AND NEED THIS RIGHT NOW!!!!! IF I DON’T SEE IT IN THE NEXT TWO MINUTES I’LL STRANGLE YOU!" The Ponzi scheme ultimately collapsed like a house of cards after HSBC Bank. The trustee described gifts to Seruya of a new Lexus. and was allowed to deposit the check into a second account he controlled. Another partner. belatedly did a title search and discovered that it did not own the mortgages on properties it believed it was financing on behalf of Dwek in Neptune." In another. even though the promised wire transfer to cover the check had never been made. IF IT IS NOT THERE IN THE NEXT 5 MINUTES — I AM GOING TO YOUR OFFICE AND YOU ARE NOT GOING TO LIKE IT. . and had the ability to write checks to himself. to facilitate the fraudulent deals being made through the company. partial payments on nine condominiums in Israel. When the bank finally began looking at the property records. the court documents charge. In one. Seruya has denied all allegations. and transfers through Dwek’s American Express account in excess of $1.3 million to a synagogue where the controller’s brother was a rabbi and he had access to its accounts. he was charged with criminal fraud and in January. according to the federal criminal complaint. Once PNC moved to reclaim the money. according to court filings. entered into a plea agreement with the government.. he signed over the deeds and then drove to Roseland to meet with the criminal attorney he had retained. Joseph Dwek of Brooklyn after a tense meeting in Hackensack with a law firm representing the uncle. Under the bank’s policies. Dwek already owned the properties. At 8:51 a. Dwek began transferring his properties to an uncle. Isaac Franco of Brooklyn. Days later. said Stanziale in court filings. or they would report him to authorities.
the scene was repeated before Superior Court Judge Thomas Scully in Freehold. A stout man with a trim beard. Dwek stood as he entered pleas to separate counts of bank fraud and money laundering in connection with two bogus checks totaling more than $50 million that he tried to deposit at the PNC Bank. His sentencing is still pending." he declared.000 in dirty checks to cash for Dwek through charitable. former partners. Another $15. adjusted his steel-wire glasses and touched his face. The document speaks for itself.100 in cash received from Barry Kantrowitz. He tapped his fingers on the defense table during parts of the hearing. which was crowded with reporters. Later in Monmouth County. Dwek’s bankruptcy attorney. all while Dwek was getting deeper and deeper into the sting operation. firmly and without hesitation. Included were checks coming out of several Florida and Israeli real estate deals. Linares in Newark this morning. Kohen pleaded guilty in the case in March 2007. as well as others. and were described in startlingly frank language.8 million of the proceeds through other banks. Ben Haim was among those charged in July with money laundering. would not elaborate on the filing. Dwek admitted that he schemed with mortgage broker Joseph Kohen. Dwek was receiving payments from those tied to the criminal case. Those payments were detailed on an amendment to Dwek’s original bankruptcy petition to correct the list of assets he held. One parked parallel to the courthouse. .000 cancelled deal that involved Ben Haim and Moshe "Michael Altman. 39. some involving partial payouts to Eliahu Ben Haim. touching his hands lightly to the table in front of him or clasping his hands together. he wore a dark suit with a light blue tie and a black velvet yarmulke atop his thinning black hair. the cash was left in a garbage bag behind the broker’s office..m. records show.The bankruptcy action in Newark — a complex and convoluted proceeding involving dozens of creditors. brought in by U. According to the filing. "I’m not at liberty to talk about it." a Hudson County developer who. District Judge Jose L. Appearing before U. and has dragged on nearly three years. non-profit entities. to defraud PNC Bank of more than $50 million and launder $22. "I am guilty your honor. principal rabbi at Congregation Ohel Yaacob in Deal. shielding the vehicle carrying Dwek from photographers as it rolled into an underground parking garage.300 came out of a $20. as he answered questions of the judge clearly and directly. a Monmouth County real estate broker who represented Dwek in many property deals. Dwek emerged from a secured entrance to Linares’ courtroom. where Dwek pled to similar state charges. In court today. The most curious — and still unexplained — payment included on the new asset list filed with the court was $75. according to the criminal complaints. The money was all turned over to the government. according to the court records. "washed" more than $600. He arrived first at the federal courthouse shortly before 9 a. But even while that proceeding was underway.S. relatives and investors — was filed after Dwek began cooperating with the government.S. of Deal. About one hour later. Neither Kantrowitz nor his attorney returned repeated phone calls. Timothy Neumann. Other times he just smiled. shifting his weight from foot to foot while glancing around at the courtroom. Marshals and the FBI in a caravan that included two black Chevy Suburbans with dark tinted windows." he said.
and then walked back through the secure door of the courtroom. Linares scheduled Dwek’s sentencing for Feb. After the 30-minute hearing. Dwek poured himself a white Styrofoam cup of water.S. smiled and nodded at federal prosecutors. Marshals and FBI agents. although judges are not bound by such agreements and have wide discretion when imposing sentence. accompanied by U.He faces between nine and roughly 11 years under the terms of his plea deal. . He shook hands with an FBI agent and Stanziale. 9.
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