NEWARK, NJ — A member of the Newark City Council and board of directors of the Newark Community Economic Development Corporation was charged Oct. 20 with scheming to obtain bribes and kickbacks, U.S. Attorney Craig Carpenito announced.
Joseph A. McCallum Jr., 65, of Newark, is charged by complaint with one count of wire fraud for allegedly devising a scheme, using interstate wire communications, to defraud Newark and the NCEDC of the right to McCallum’s honest services.
Malik Frederick, 60, of Newark, a participant in the scheme, pleaded guilty Oct. 20 by videoconference before U.S. District Judge William Martini to Count 1 of a four-count information, charging conspiracy to commit honest services wire fraud, and Count 3, charging him with subscribing to a false personal federal tax return for 2017 for intentionally not reporting more than $100,000 in income.
“On behalf of the city of Newark, we do not condone any of the actions within city government that have allegedly occurred and will cooperate with the investigation,” Mayor Ras Baraka said in an Oct. 21 statement. “With that being said, we also send prayers to Council Member Joseph McCallum and his family during what must be a difficult time. We do hope that these allegations are not true. However, if in fact they are, then he should consider the West Ward and the city of Newark by resigning and allowing us to heal and move on.”
According to documents filed in these cases and statements made in court, as a member of the Newark City Council representing the West Ward and of the NCEDC, 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.
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.
The bribes and kickbacks allegedly 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; and 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.
Frederick also sought to have a modular home company that was in negotiations with the NCEDC on a development project in Newark retain his company and obtain a $40,000 payment from the company. Frederick intended to share the $40,000 payment with an NCEDC official, called 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.
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. Sentencing for Frederick is scheduled for March 2, 2021.
The charge and allegations contained in the complaint against McCallum are merely accusations, and the defendant is presumed innocent unless and until proved guilty.