2003-04-02 -- Saunders, Kenneth and Rayfield James -- Indictment -- News Release

Former Asbury Park Mayor and Political Aide Arrested Today on Corruption Charges

NEWARK - Former mayor of Asbury Park Kenneth E. Saunders, Sr. was arrested this morning, charged in an Indictment with conspiracy to bribe a member of the Asbury Park City Council in connection with the redevelopment of the Asbury Park oceanfront, U.S. Attorney Christopher J. Christie announced.

Also arrested by Special Agents of the FBI and the IRS was Rayfield James, Jr., 46, formerly a political consultant to the 58-year-old Saunders, who was charged in the same corruption Indictment. Both men, residents of Asbury Park, were arrested early this morning at their homes.

Count One of the six-count Indictment, charging conspiracy, describes efforts of Saunders and James to influence the Council Member's votes regarding the redevelopment of the Asbury Park oceanfront, by offering to pay the Council Member's property tax liens. Count One also alleges that James, 46, promised seven-figure payoffs for himself, Saunders and the Council Member from a preferred developer in connection with the oceanfront redevelopment, should this developer secure the redevelopment rights.

The Council Member was cooperating in the investigation and tape-recorded conversations with Saunders and James during numerous meetings between March 2000 and October 2000.

To avoid detection as a public official involved in corrupt activities, according to the Indictment, Saunders told the Council Member that he was using James as a go-between with the preferred developer, who, according to James, was offering payoffs to get the oceanfront development rights. At one meeting, in March 2000 at the Boys and Girls Club in Asbury Park - where Saunders held a full-time job - Saunders was discussing with the Council Member the elimination of the Council Member's tax liens. Saunders allegedly said that he used James to do his "dirty work," explaining that as an elected official he did not want to speak directly with the preferred developer.

The Indictment sets forth that James allegedly told the Council Member that he was attempting to arrange for corrupt payments of "seven figures" for Saunders, the Council Member and James in connection with the approval of the oceanfront redevelopment rights.

The scheme charged in the Indictment does not involve the transfer of the redevelopment rights which were ultimately approved by the Asbury Park City Council in August 2001 and does not implicate the redevelopment efforts that are currently ongoing.

"This is the corrupt activity that we are determined to stamp out in Asbury Park, in Monmouth County and New Jersey, wherever we find it," Christie said. "Rest assured this office is not done in Asbury Park and Monmouth County."

Saunders was also charged with aiding and assisting in the preparation and filing of his personal income tax returns for the years 1997 through 2001, knowing that those returns were false and fraudulent as to material matters.

Counts Two through Six charge Saunders with aiding in the preparation and submission to the Internal Revenue Service of his federal income tax returns for the years 1997 through 2001, knowing that they contained false assertions which fraudulently inflated the refund he claimed each year. Specifically, the Indictment alleges that for each of the five years, Saunders improperly claimed head of household status and dependent grandchildren and submitted inflated claims regarding unreimbursed job expenses which he had allegedly incurred in his role as Asbury Park mayor.

Saunders served as the Mayor of Asbury Park from July 1, 1997, through June 30, 2001. Saunders was elected to the Asbury Park City Council in May of 1997 and was chosen to serve as mayor by the other members of the Council, which included John Hamilton, a current Councilman who served as Deputy Mayor under Saunders, Louise Murray, Sheila Solomon and James Condos. Condos was indicted along with developer Philip Konvitz in October of 2002 on corruption charges. Trial is pending for Condos and Konvitz, and a status conference is scheduled tomorrow, Thursday, before U.S. District Judge John C. Lifland at 10 a.m.

Saunders did not run for re-election in 2001. James, 46, served as the campaign manager for Asbury United, a slate of candidates who ran during the 1997 Asbury Park City Council election and of which Saunders was a member. James remained as a political consultant to Saunders throughout Saunders' term in office.

Saunders and James are charged with conspiracy to commit bribery in Count One which carries a maximum penalty of five years in prison and a $250,000 fine. Saunders is charged in Counts Two through Six with aiding and assisting the preparation and presentation to the Internal Revenue Service of his federal income tax returns for the calendar years 1997 through 2001. Each of these counts carry a maximum penalty of three years in prison and a maximum fine of either $100,000 plus the costs of prosecution or a $250,000 fine.

Under U.S. Sentencing Guidelines, U.S. District Judge C. Lifland, to whom the Saunders and James case has been assigned, as well as other of the related Monmouth County cases, would, upon conviction, determine the actual sentences based upon a formula that takes into account the circumstances of the crime and criminal histories, if any.

An arraignment on the Indictment for Saunders and James is scheduled before Judge Lifland for April 8 at noon.

An Indictment is a formal charge made by a grand jury, a body of 16 to 23 citizens. Grand jury proceedings are secret, and neither persons under investigation nor their attorneys have the right to be present. A grand jury may vote an Indictment if 12 or more jurors find probable cause to believe that the defendant has committed the crime or crimes charged.

Despite Indictment, every defendant is presumed innocent, unless and until found guilty beyond a reasonable doubt, following a trial at which the defendant has all the trial rights guaranteed by the U.S. Constitution and federal law.

Christie credited Special Agents of the FBI, under the direction of Special Agent in Charge Louie F. Allen, and the IRS Criminal Investigation Section, under the direction of Special Agent in Charge Anne D. Fahy, for their work in developing the case.

-end-

Defense Counsel:

Saunders: Anthony J. Iacullo, Esq. Montclair

James: Kenneth Kayser, Esq. Livingston