FBI Probe into New Jersey Political Corruption with Land Developers Leads to Bribery Arrest

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NEWARK, NJ –  The Federal Bureau of Investigation and the New Jersey Attorney General’s Office have been working overtime in 2020 to go after corrupt politicians across New Jersey. While an investigation of corruption in Ocean County continues by the agency’s Red Bank field office, the FBI charged a Newark public official with bribery today.

A member of the Newark Municipal Council and Board of Directors of the Newark Community Economic Development Corporation (NCEDC) was charged today with scheming to obtain bribes and kickbacks, U.S. Attorney Craig Carpenito announced.

Joseph A. McCallum Jr., 65, of Newark, is charged by complaint with one count of wire fraud for allegedly devising a scheme, using interstate wire communications, to defraud Newark and the NCEDC of the right to McCallum’s honest services. McCallum is scheduled to appear on a date that will be determined by the court.

Malik Frederick, 60, of Newark, a participant in the scheme, pleaded guilty today by videoconference before U.S. District Judge William J. Martini to Count 1 of a four-count information, charging conspiracy to commit honest services wire fraud, and Count 3, charging him with subscribing to a false personal federal tax return for 2017 for intentionally not reporting over $100,000 in income.

According to documents filed in these cases and statements made in court:

As a member of the Newark city council, representing the West Ward, and of the NCEDC (now known as Invest Newark!), from 2017 through February 2020, McCallum schemed to receive concealed bribes and kickbacks from Frederick, funded by developers, contracting companies, and other businesses seeking contracts and approvals principally related to development, construction, and real estate projects and deals in Newark. These developers and others were solicited by Frederick to hire his consulting company for “access,” and were introduced to McCallum as the councilman behind the particular project or deal of interest to them. McCallum then received and planned to receive concealed bribes and kickbacks derived from the fees that Frederick obtained from those who retained his company.

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In exchange, McCallum used his official positions to provide assistance to those who retained Frederick’s company. For those who refused or hesitated to pay, McCallum and Frederick intended to prevent them from obtaining contracts and work from the NCEDC and the City of Newark. McCallum and Frederick used interstate emails and phone calls to further this scheme and took significant steps to conceal these bribes and kickbacks.

The bribes and kickbacks received and sought by McCallum through Frederick included the following:

  • A $16,000 bribe funded by a payment from a contracting company;
  • a $25,000 bribe and kickback funded by a payment from a developer’s  company;
  • $500 in cash to cover travel expenses for an out-of-country trip and an attempt to receive part of a $50,000 payment from a second developer;
  • and an attempt to obtain payments from a seller of property in the West Ward and a developer who was seeking to buy and develop the property.

 

Frederick also sought to have a modular home company that was in negotiations with the NCEDC on a development project in Newark retain Frederick’s company and obtain a $40,000 payment from the company. Frederick intended to share the $40,000 payment with an NCEDC official (Co-Conspirator 2) who referred Frederick to the modular home company and expected a portion of whatever Frederick would be paid. After the modular home company refused to retain Frederick’s company, it did not receive a contract from the NCEDC.

The honest services wire fraud charge alleged in the criminal complaint against McCallum and the wire fraud conspiracy charged in Count 1 of the information to which Frederick pleaded guilty carries a maximum penalty of 20 years in prison and a fine of $250,000, or twice the pecuniary gain to the defendant or loss to the victims, whichever is greater. The false tax return charge to which Frederick pleaded guilty carries a maximum potential penalty of three years in prison and a maximum $250,000 fine, or twice the pecuniary gain to the defendant or loss to the victim, whichever is greater. Sentencing for Frederick is scheduled for March 2, 2021.

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U.S. Attorney Carpenito credited special agents of the FBI’s Newark Field Office, under the direction of Special Agent in Charge in Newark George M. Crouch Jr. in Newark; special agents of IRS-Criminal Investigation, under the direction of Special Agent in Charge Michael Montanez, and special agents of the U.S. Department of Housing and Urban Development, Office of Inspector General, under the direction of Special Agent in Charge Christina Scaringi, with the investigation leading to today’s charges against McCallum and guilty plea by Frederick.

The government is represented by Assistant U.S. Attorneys Jihee G. Suh, Jeffrey Manis, and Elaine K. Lou of the U.S. Attorney’s Office’s Special Prosecutions Division.

The charge and allegations contained in the complaint against McCallum are merely accusations, and the defendant is presumed innocent unless and until proven guilty

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