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Court setbacks put damper on NJ corruption busts

Associated Press Modified: April 1, 2012 at 1:45 pm •  Published: April 1, 2012
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NEWARK, N.J. (AP) — Louis Manzo was preparing to do a radio interview from his family's shore home on the morning of July 23, 2009, when the FBI called. Hours later, he was being led in handcuffs before TV cameras with dozens of other suspects in New Jersey's largest political corruption and money laundering sting.

One problem: He was charged with crimes he couldn't have committed, a federal judge would later rule in two separate opinions.

Today Manzo, a former state lawmaker, is a free man after a bruising legal battle to clear his name, an effort that cost him his home, his job and $150,000 in legal fees — expenses he recently filed a motion to have the government reimburse him for.

Manzo's odyssey has spotlighted the flaws in a 2 1/2-year sting operation that cost millions of dollars to mount and prosecute but never became the type of slam-dunk usually attained in federal investigations.

It has also brought allegations that Chris Christie, who initiated the probe as U.S. attorney, steered it away from Republican officials who later helped him win election as governor. The vast majority of those arrested in the sting were Democrats.

Even for those who have been exonerated, the human cost has been steep.

Joseph Doria, a longtime northern New Jersey politician who headed the state Department of Community Affairs in 2009 under former Gov. Jon Corzine, was never charged with any crimes. But the fallout from images of FBI agents carrying boxes out of his office was enough to force his resignation.

"When you charge someone, particularly a public figure, you essentially ruin their life," said Rutgers School of Law Dean John Farmer, a former New Jersey attorney general whose former law firm represented Doria. "It's almost as if it's the charge that matters, not what eventually happens. I think there wasn't enough sensitivity to that reality when these cases were brought. It's why the government should be very circumspect about charging public officials."

Doria, who didn't return a message seeking comment, had acknowledged meeting with the man at the center of the investigation, government cooperator Solomon Dwek. A disgraced real estate speculator and admitted Ponzi schemer, Dwek agreed to wear a wire for the government in a plea deal after his arrest in a $50 million bank fraud.

Dwek recorded hundreds of hours of meetings and conversations with public and elected officials between 2007 and 2009, presenting himself as a developer looking to get favorable treatment in exchange for cash. He also met with prominent members of his own Orthodox Jewish community, more than a dozen of whom were later charged with laundering money through charities.

Prosecutors knew Dwek's criminal past would be a tough sell with jurors, but other obstacles originated in their own office.

Those were exposed when a judge ruled in 2010 that the U.S. attorney's office had erred when it charged several candidates for public office under a law that applies to already-elected officials. Several defendants had charges dismissed as a result. In his opinion, U.S. District Judge Jose L. Linares accused the government of using "legal alchemy" to charge defendants when the facts didn't align.

Prosecutors brought additional charges against some defendants, including Manzo, who was charged with interstate travel in aid of crimes because he had met with Dwek in New York's Staten Island. Those charges were thrown out last month.

"We based the prosecution on evidence Manzo agreed to take money from Solomon Dwek for a criminal purpose," U.S. Attorney Paul Fishman said. "We agree with the court's characterization of the defendant's alleged conduct as 'reprehensible,' and 'deeply objectionable,' but accept the Court's finding that his actions do not violate existing federal law."

David Shapiro, a former prosecutor and FBI agent who runs corporate investigations for Aon Corp., said the number of guilty pleas indicates that wrongdoing did occur. He said the charging errors shouldn't be interpreted as government malfeasance.

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