former bergen county, n.J., democratic chairman indicted on racketeering charges
FOR IMMEDIATE RELEASE
September 11, 2013
Kickbacks, Bribery and Extortion Alleged
NEWARK, N.J. – A federal grand jury indicted Joseph A. Ferriero, the former chairman of the Bergen County Democratic Organization (BCDO), today, charging him with a racketeering scheme involving kickbacks paid to a public official, soliciting and accepting bribes as a party official and extortion, U.S. Attorney Paul J. Fishman announced.
The indictment charges Ferriero, 56, with conducting the BCDO’s affairs through a pattern of racketeering activity. He is also charged with conspiring to promote bribery and distribute bribe proceeds and to commit mail and wire fraud; as well as with one count each of violating the Travel Act and the mail and wire fraud statutes.
Ferriero is expected to make his initial court appearance before U.S. Magistrate Judge Joseph A. Dickson in Newark federal court on a date to be determined.
“According to the indictment, Joseph Ferriero ran a political organization as a racketeering enterprise, abusing power for profit,” said U.S. Attorney Fishman. “Today’s charges expose years of peddled influence, from grants to building projects to software contracts. Battling political corruption is a constant priority for this office; we will continue to demand honest public service for the people of New Jersey.”
“The conduct alleged in today’s indictment is another unfortunate example of someone misusing their position in our political system for personal gain,” said FBI Special Agent in Charge Aaron T. Ford. “Such conduct tarnishes our political system. Today’s indictment reaffirms the FBI’s commitment to combat public corruption in New Jersey, and serves as a stark reminder that those who seek to violate public trust will be held accountable.”
According to the indictment returned today:
Ferriero served as the chairman of the BCDO from 1998 until January 2009. From December 2001 until October 2008, he conducted the BCDO’s affairs through a pattern of racketeering activity involving three schemes: the Governmental Grants Consulting (GGC) kickback scheme, the retail and entertainment project bribery and extortion scheme and the SJC Consulting (SJC) bribery scheme.
Ferriero offered Dennis J. Oury, 63, of Naples, Fla., the then-incoming borough attorney in Bergenfield, N.J., a concealed ownership interest in GGC in exchange for Oury’s agreement to exercise official action and discretion in GGC’s favor in Bergenfield. Oury accepted the offer and used his official position to cause GGC to be hired in Bergenfield. A portion of GGC’s proceeds from the borough were ultimately “kicked back” to Oury by Ferriero.
The conduct in this scheme was the subject of an earlier indictment and superseding indictment against Oury and Ferriero. On Sept. 29, 2009, Oury pleaded guilty before U.S. District Judge Stanley R. Chesler to Count One of the superseding indictment, charging him with conspiring with Ferriero to defraud Bergenfield through the use of the mails, and Count 11, charging him with willful failure to file a tax return. Oury was sentenced by Judge Chesler on Nov. 29, 2012, to three years of probation.
On Oct. 29, 2009, a federal jury found Ferriero guilty of one count of conspiracy and two counts of mail fraud related to the same scheme, but Judge Chesler dismissed the superseding indictment prior to Ferriero’s sentencing after the U.S. Supreme Court’s decision in Skilling v. United States.
Ferriero engaged in the retail and entertainment project bribery and extortion scheme by soliciting payments totaling $1.7 million from a Virginia-based real estate investment trust (the “Virginia REIT”) that, between 2002 and 2006, was involved in an attempt to develop land owned by the N.J. Sports & Exposition Authority (NJSEA) in Bergen County.
In 2002, the Virginia REIT agreed to secretly pay a consulting company operated by Ferriero and two of his then-law partners $35,000 a month in exchange for Ferriero’s agreement not to publicly oppose – nor to cause members of the BCDO or other public officials with whom he had influence to publicly oppose – the Virginia REIT’s proposal to the NJSEA. The payments were also in exchange for Ferriero’s assistance in obtaining endorsements, public support and other official action and inaction in favor of the Virginia REIT from members of the BCDO and other public officials with whom he had influence.
The indictment also alleges that Ferriero accepted bribes in his capacity as BCDO chairman in the course of the SJC bribery scheme. Ferriero agreed with a Nutley, N.J.-based attorney and software developer that Ferriero would recommend and provide a favorable opinion of the software developer and his companies to various public officials in Bergen County with whom Ferriero had influence. The software developer agreed to pay Ferriero one-quarter to one-third of the gross receipts from any contract obtained as a result of Ferriero’s efforts. Ferriero’s financial interest in the software developer’s public contracts was completely hidden using two shell companies, one of which was created and incorporated in Nevada for the sole purpose of contracting with and accepting payments from another shell company controlled by the software developer.
The racketeering charge carries a maximum potential penalty of 20 years in prison; the conspiracy charge carries a maximum potential penalty of five years in prison; the Travel Act charge carries a maximum penalty of five years in prison; and the mail and wire fraud charges each carry a maximum potential penalty of 20 years in prison. Each count of the indictment also carries a maximum $250,000 fine.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Ford in Newark, for their work in the investigation.
The government is represented by Counsel to the U.S. Attorney Rachael A. Honig. Criminal investigators from the U.S. Attorney’s Office led the investigation in this case.
The charges and allegations contained in the indictment are merely accusations and the defendant is considered innocent unless and until proven guilty.
Defense counsel: Michael Baldassare and Jennifer Mara, Esqs., Newark