Wednesday, January 20, 2021

Newark city councilman charged in bribery and kickback scheme

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Joseph A. McCallum Jr., a city councilman in Newark’s West Ward, has been accused of taking part in a “bribery and kickback” scheme involving local construction and real estate projects, federal prosecutors announced Tuesday.

McCallum, 65, is a member of the Newark Municipal Council and board of directors of the Newark Community Economic Development Corporation (NCEDC), the U.S. Attorney’s Office stated.

Prosecutors said another participant in the alleged scheme, Malik Frederick, 60, of Newark, pleaded guilty Tuesday to count one of a four-count information, charging conspiracy to commit honest services wire fraud, and count three, charging him with subscribing to a false personal federal tax return for 2017 for intentionally not reporting over $100,000 in income.

According to prosecutors:

“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.”

Prosecutors alleged:

“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.”

Prosecutors said 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
  • 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

Prosecutors continued:

“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.”

Prosecutors said 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, prosecutors stated.

Sentencing for Frederick is scheduled for March 2, 2021, prosecutors said.

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