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FBI Informant Solomon Dwek Gets 6 Years in Prison for Role in $50M Fraud Scheme

Solomon Dwek — the informant behind the sweeping federal corruption sting that ensnared politicians, rabbis and even a black market kidney broker — was sentenced today to six years in prison for his role in an unrelated $50 million check-kiting scheme.

He was facing nine to 11 years under the terms of his plea deal, which led to his cooperation agreement with the government.

Federal prosecutors urged U.S. District Judge Jose Linares in Newark to impose a lesser sentence, citing the extensive scope of his efforts in a three-year FBI undercover operation that became the largest sting operation in New Jersey history.

The U.S. Attorney’s office filed what is known as a 5K letter to Linares, detailing the assistance Dwek provided to the investigation and asking the judge to depart from federal sentencing guidelines in acknowledgement of that cooperation.

Also seeking leniency was Dwek’s attorney, who cited his client’s history of mental illness. In court filings, Dwek was said to be suffering from bipolar disorder and chronic high anxiety, characterized by “ mental excitement, racing thoughts, irritability, illusory thinking, efforts to engage in multiple activities at the same time, poor insight and inability to foresee consequences.”

Dwek faces a second sentencing date tomorrow morning in Monmouth County on additional charges involving fraudulent bank loans.

Dwek, now 40, has been behind bars since June 2011, when Linares summarily revoked his bail for lying to the FBI about a rental car that had been reported stolen in Maryland, where his family now lives. The charges in the matter were later dropped.

The son of a respected Monmouth County rabbi, Dwek was first arrested in 2006 after he deposited a worthless $25 million check on a closed account at a PNC Bank drive-through window in Eatontown, and then quickly wired out all the money. The next day, he tried to do it again at another branch in Asbury Park before the bank — only then realizing there were no funds to back the first check — abruptly stopped the transaction as the second deposit was being made.

It was later revealed that Dwek had been running a $400 million real estate Ponzi scheme before he ran out of investors and needed to quickly cover a short-term loan that had come due. Facing 30 years in jail for the bank fraud, Dwek secretly entered into a plea deal following his arrest, agreeing to cooperate with the U.S. attorney in a bid to cut the amount of time he would serve.

That cooperation led to one of the most far-reaching, and at times bizarre, undercover sting ever seen.

Wearing a hidden video surveillance camera, Dwek targeted politicians, candidates for office, religious leaders, and ultimately a man who arranged black market kidney transplants for fees of $150,000 or more.

Posing as a corrupt developer, he offered cash bribes to dozens of elected officials and candidates for office in Hudson County and elsewhere to expedite phony real estate projects — one, an unbuildable luxury condominium development purportedly located atop a chromium waste site in Jersey City near the turnpike.

At the same time, he set up former business partners, rabbis and others who helped him launder millions supposedly siphoned out of his bankrupt real estate empire — along with cash he claimed was coming out of a knock-off designer handbag operation — through religious charities and organizations.

The sting, which became known as Bid Rig III, did not come to light until July 2009, when three mayors, two legislators, five Orthodox rabbis and dozens of others were arrested in a case that made national headlines.

Lawyers for many of those charged sharply criticized the operation, claiming that Dwek set up people in an effort to get out of jail.

Dwek himself raised the ire of Linares over the course of several trials, culminating with his bail revocation after learning Dwek had misled his FBI handlers over the stolen car report. The judge, calling Dwek a “consummate defrauder and an extremely cunning liar,” said Dwek had violated the terms of his cooperation agreement with the government.

Most of those charged in the case were either convicted or pleaded guilty. Of the 46 people ultimately arrested, 32 entered guilty pleas, four were convicted at trial, two were acquitted, one died, and charges were dropped against four.

With Dwek now sentenced, the case has only a few loose ends left. Just two others are still awaiting trial while one other defendant, who disappeared the day of the July 2009 arrests, remains a fugitive.

Source: The Star Ledger

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Posted by on October 18, 2012. Filed under NY News,Slider. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

2 Responses to FBI Informant Solomon Dwek Gets 6 Years in Prison for Role in $50M Fraud Scheme

  1. trust no one

    October 18, 2012 at 8:49 pm

    If anyone still thinks that you should cooperate with the Feds, think again, they end up screwing you one way or another.

  2. 770 dude

    October 18, 2012 at 9:33 pm

    Rot in hell my friend, you got approx 1800 days to look at yourself and to think what you did with your pathetic life. Did you really think that by ratting on everyone you will get away with it? FOOL!