Soloman Dwek Sentenced to Six Years in Prison for Bank Fraud
Defendant’s Cooperation Led to More Than Three Dozen Convictions
|U.S. Attorney’s Office October 18, 2012|
NEWARK—Monmouth County real estate developer Solomon Dwek was sentenced today to 72 months in prison in connection with his scheme to defraud PNC Bank of more than $50 million, U.S. Attorney Paul J. Fishman announced.
Dwek, 40, pleaded guilty in October 2009 before U.S. District Judge Jose L. Linares to an information charging him with one count each of bank fraud and money laundering. Judge Linares imposed the sentence today in Newark federal court.
“Although Dwek’s fraudulent conduct was extremely serious, today’s sentence also takes into account his extraordinary cooperation against corrupt politicians, money launderers, and organ trafficking,” U.S. Attorney Fishman said. “As in all cases where defendants choose to assist the government, the court must impose a sentence that takes into account the magnitude of the crime; the nature, value, and extent of the defendant’s assistance; and the defendant’s personal circumstances. The sentence imposed today by the court was a just and appropriate balance.”
“Solomon Dwek’s impact on systemic corruption in New Jersey is considerable,” FBI Special Agent in Charge Michael B. Ward said. “In an environment where corruption subjects often go to great lengths to make known they have refused to cooperate, Dwek made substantial personal sacrifices in order to assist law enforcement. He must stand accountable for his own crimes, but in terms of his cooperation, he deserves much credit. His efforts exposed corruption at unprecedented levels and cast a spotlight on the lengths some political candidates were willing to go to enrich themselves.”
“This investigation took law enforcement above and beyond its traditional role in financial crimes,” Shantelle P. Kitchen, acting special agent in charge, IRS-Criminal Investigation, Newark Field Office, said. “Today’s sentencing of Solomon Dwek is a direct result of the excellent partnership between the IRS, FBI, and U.S. Attorney’s Office. An investigation such as this takes a dedicated team of investigators and prosecutors many hours of hard work and sacrifice to bring to a successful conclusion.”
According to documents filed in this case and statements made in court: Dwek and Joseph S. Kohen, 39, of Deal, schemed to defraud PNC Bank of more than $50 million and to launder approximately $22.8 million of the proceeds through other banks, which included paying off an overdue and fraudulently obtained $20 million line of credit at HSBC Bank USA, N.A. (HSBC).
Dwek and Kohen schemed to defraud PNC Bank by presenting, on April 24,2006, a $25,212,076 check drawn on a Dwek-controlled account in the name of Corbett Holdings at a PNC Bank branch in Eatontown, New Jersey. Dwek wanted the check deposited into another PNC account that he controlled in the name of SEM Realty Associates LLC. After a PNC Bank official advised him that the Corbett Holdings account was closed with a zero balance, Dwek falsely represented that “corporate” was reopening the account and that a wire transfer of funds into the Corbett Holdings account would be forthcoming, which did not occur. Dwek’s check was honored and deposited.
The next day, Dwek phoned in four wire transfers out of the SEM Realty account to various other banks, including $20 million and $2.2 million wire transfers to HSBC, according to Dwek. The $20 million wire transfer to HSBC was for the purpose of paying off an overdue and fraudulently obtained $20 million line of credit that he received from HSBC, which he had fully drawn down. As a result, the SEM Realty account was overdrawn by $22.8 million.
On April 25, 2006, Dwek presented another bogus $25 million check to be drawn on the same Corbett Holdings account for deposit into the same SEM Realty account at a PNC Bank branch in Asbury Park. This check was not honored or deposited by the bank. Dwek made a number of false statements and representations to cover up this scheme, including falsely advising a PNC bank official that he was expecting a wire transfer from an attorney that would cover the $25,212,076 check drawn on the Corbett account. Dwek later called back the PNC official and had Kohen pose as the attorney and falsely tell the bank official that he would make a wire transfer to cover the $25 million check. The wire transfers of these fraudulently obtained proceeds to HSBC, as well as two other wire transfers of $580,000 and $10,000 to other banks, was money laundering.
Kohen pleaded guilty to bank fraud on March 21, 2007. He was sentenced to 30 months in prison by Judge Linares.
Dwek was charged with bank fraud on May 11, 2006, in a criminal complaint. He cooperated with law enforcement in an investigation of pre-existing money laundering networks that operated internationally among New York, New Jersey, Israel, and other locations and laundered millions of dollars through charitable, non-profit entities. This cooperation led to the conviction of, among others, five rabbis, on money laundering and unlicensed money remitting charges. Among those convicted were Rabbi Eliahu Ben Haim of Elberon, New Jersey, the former chief rabbi of Congregation Ohel Yaacob in Deal, New Jersey; and Rabbi Mordchai Fish, the former chief rabbi of Congregation Sheves Achim in Brooklyn, New York. U.S. District Judge Joel A. Pisano sentenced Ben Haim to 60 months in prison in January 2012 and sentenced Rabbi Mordchai Fish to 46 months in prison on July 3, 2012.
Dwek’s cooperation also led to the first-ever conviction for organ trafficking under the National Organs Transplant Act of 1984. Levy Izhak Rosenbaum of Brooklyn pleaded guilty to three counts of organs trafficking and one count of conspiracy to commit organ trafficking and was sentenced to 30 months in prison on July 11, 2012, by U.S. District Judge Anne E. Thompson in Trenton.
Law enforcement officials also used Dwek to investigate public corruption in New Jersey. Those investigations led to convictions against numerous individuals for public corruption, including Hoboken Mayor Peter Cammarano, who was sentenced to 24 months in prison on August 5, 2010; Secacus Mayor Dennis Elwell, who received a term of 30 months in prison on April 12, 2012; Jersey City Council President Mariano Vega, Jr., who received a sentence of 30 months in prison on April 11, 2011; and Jersey City Deputy Mayor Leona Beldini, who received a prison term of 36 months on June 14, 2010. All four defendants were sentenced by Judge Linares. In addition, Assemblyman Daniel Van Pelt of Ocean County was convicted at trial before Judge Pisano and sentenced to 41 months’ imprisonment on November 22, 2010.
In addition to the prison term, Judge Linares sentenced Dwek to five years of supervised released and ordered restitution of $22.8 million. Dwek also is scheduled to appear in state Superior Court in Freehold, New Jersey, at 9:15 a.m. tomorrow for sentencing on state charges.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael B. Ward; and special agents of IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s sentencing. He also thanked assistant prosecutors and investigators from the Monmouth County Prosecutor’s Office, under the direction of Acting Prosecutor Christopher J. Gramiccioni, for their role in the investigation.
The government is represented Assistant U.S. Attorney Mark McCarren of the Special Prosecutions Division.