Mayors, Rabbis Arrested in Corruption Sting

The mayors of three New Jersey cities, two state legislators and several rabbis were among more than 40 people arrested Thursday in a sweeping corruption investigation that began as a probe into an international money laundering ring that trafficked in goods as diverse as human organs and fake designer handbags.

Among 44 people arrested Thursday were Hoboken Mayor Peter Cammarano III, Secaucus Mayor Dennis Elwell, Jersey City Deputy Mayor Leona Beldini, former Jersey City Council President L. Harvey Smith and state Assemblyman Daniel Van Pelt.


So many people were arrested, a bus was rented.

"The list of names and titles of those arrested today sounds like a roster for a community leaders meeting," said Weysan Dun, Special Agent In Charge of the FBI in Newark.

See the full list of those arrested and/or charged

A member of the New Jersey governor's cabinet has resigned amid the investigation. Speaking Thursday at a news conference, Gov. Jon Corzine said he asked Community Affairs Commissioner Joseph Doria to step down and that Doria agreed to leave office.

Corzine says Doria could not be effective with such a serious investigation going on.

Among the 44 people arrested Thursday were the mayors of Hoboken, Ridgefield and Secaucus. Van Pelt is accused of accepting $10,000 from a cooperating government witness posing as a developer who sought help in getting permits for a project in Ocean County.

Smith, a former state Assemblyman and Jersey City mayoral candidate who served four years as the city's council president, and several other current and former Jersey City public officials also are accused of accepting money to help the fake developer gain permits and approvals.

"This investigation has once again identified a corrupt network of public officials who were all too willing to take cash in exchange for promised official action," said acting US Attorney Ralph J. Marra Jr. "It seemed that everyone wanted a piece of the action. The corruption was widespread and pervasive."

In separate money laundering complaints, several individuals from Brooklyn and New Jersey were charged with offenses ranging from the trafficking of kidneys from Israeli donors to laundering proceeds from selling fake Gucci and Prada bags.

One criminal complaint charges a Brooklyn man, Levy Izhak Rosenbaum, with conspiring to broker the sale of a human kidney for a transplant, at a cost of $160,000 to the transplant recipient. According to the Complaint, Rosenbaum said he had been brokering the sale of kidneys for 10 years, according a press release from the New Jersey Department of Justice.

Law enforcement personnel, with the assistance of a cooperating witness, first infiltrated a pre-existing money laundering network that operated internationally between Brooklyn, Deal, N.J., and Israel and laundered at least tens of millions of dollars through charitable, non-profit entities controlled by rabbis in New York and New Jersey.

Most of the defendants were arrested early Thursday morning by federal agents, led by Special Agents of the FBI Newark Division and IRS Criminal Investigation Division, according to the press release.

Mike Winnick of the Elberon section of Long Branch was praying inside the Deal Synagogue when it was raided by FBI, IRS and Monmouth County Prosecutor's Office agents.

"Everyone was looking at each other, like, `What's going on here?' " he said.

Winnick said four FBI agents escorted a rabbi from the synagogue into his office and blocked the doorway.

Winnick said he left shortly afterward.

Nearby, FBI and IRS agents removed several boxes from the Deal Yeshiva, a school that educates the children of Sephardic Jews. One agent slowly walked an elderly rabbi into the building as another covered his face with a felt hat.

Court-authorized search warrants were also being executed approximately 20 locations in New Jersey and New York, to recover, among other things, large sums of cash and other evidence of criminal conduct, according to the press release. Additionally, 28 seizure warrants were being executed against bank accounts in the names of the money laundering defendants and entities they control.

Those charged in the public corruption investigation are scheduled to begin making appearances today in federal court in Newark at 2 p.m. before U.S. Magistrate Judge Madeline Cox Arleo. Those charged in the money laundering investigation, are scheduled to begin making initial appearances thereafter before U.S. Magistrate Judge Mark Falk, according to the press release.

The state of New Jersey has seen more than 130 public officials plead guilty or be convicted of corruption since 2001.

CNBC contributed to this report