Dozens held in US corruption probe

Jul 24 2009

Forty people including town mayors, state politicians and rabbis have been arrested in the US as part of a major FBI probe into corruption.

Federal prosecutors said the investigation initially focused on a money laundering network that operated between the New York City borough of Brooklyn, Deal in New Jersey and Israel which is alleged to have laundered tens of millions of dollars through Jewish charities.

Prosecutors then used an informant in that investigation to help them go after corrupt politicians. The informant - a real estate developer charged with bank fraud three years ago - posed as a crooked businessman and paid a string of public officials tens of thousands of dollars in bribes to get approvals for buildings and other projects.

Among the 44 people arrested are the mayors of Hoboken, Ridgefield and Secaucus, Jersey City's deputy mayor, and two state assemblymen. All but one of the officeholders are Democrats.

Also, five rabbis from New York and New Jersey - two of whom lead congregations in Deal - were accused over the laundering of millions of dollars, some of it from the sale of counterfeit goods and bankruptcy fraud.

Others arrested included building and fire inspectors, city planning officials and utilities officials, all of them accused of using their positions to further the corruption.

In rounding up the defendants, FBI and IRS agents raided a synagogue in Deal, a wealthy oceanfront city of Mediterranean-style mansions with a large population of Syrian Jews.

Those arrested include Levy Izhak Rosenbaum of Brooklyn, who is charged with conspiring to arrange the sale of an Israeli citizen's kidney for $160,000 for a transplant for the informant's fictitious uncle. Rosenbaum was quoted as saying he had been arranging the sale of kidneys for 10 years.

The politicians arrested were not accused of any involvement in the money laundering or the trafficking in human organs.

The number of arrests was remarkable even for New Jersey, where more than 130 public officials have pleaded guilty or have been convicted of corruption since 2001.