It was one of the most sordid chapters in the long history of political corruption in New Jersey, and it came to light on July 23, 2009, with the arrests of 44 people. Five of them were rabbis in the Orthodox communities in Deal and parts of Brooklyn. Among the others were three mayors, dozens of public officials, and an Orthodox Jewish real estate dealer accused of brokering the sale of a human kidney.
The man whose massive wrongdoing made all the arrests possible is Solomon Dwek, the son of a respected rabbi from Deal’s Syrian community and the self-confessed operator of a $15 million bank fraud and Ponzi scheme.
Watching the events closely were two reporters from The Star-Ledger, Ted Sherman and Josh Margolin. Their voluminously detailed 386-page book, The Jersey Sting, was published in March by St. Martin’s Press.
As two veteran investigative reporters who both happen to be Jewish, neither was taken by surprise by most of the arrests. But involving as it did rabbis who allegedly used synagogues and charities to launder illegal money, it was, as Margolin put it, a case of “man bites dog.”
“For Ted and me, seeing two dozen politicians take the walk of shame doesn’t do anything. It’s another day at the office,” he said in an April 11 phone interview. “But when you see the rabbis being walked off the bus in handcuffs, it’s disturbing.”
“It was surprising to me because when I go into my rabbi’s office there is no money-counting machine,” said Sherman, a Conservative Jew who also took part in the interview.
What especially upset Margolin was what he heard on surveillance tapes Dwek made after agreeing to cooperate with federal prosecutors by targeting suspects in bribery and money-laundering schemes across the state. At one point, suspects refer to money as “gemaras,” an ironic reference to the Gemara, a major component of the Talmud.
“Having gone to yeshiva my high school years and having taken Talmud classes, I was really surprised to hear rabbis using yeshiva terms, terms of considerable holiness as code words for criminal activity,” said Margolin. “On the flip side, while I am a Jewish man and a student of Judaism, I am also a reporter who has covered politics and corruption for almost all of my 20 years in the business. I find there are corrupt pockets among our leaders in every walk of life. So it shouldn’t be surprising that we are going to find corruption among Jewish leaders.”
A matter of trust
Much of the book details the activities of Dwek, a rabbinical school dropout who lured investors in and outside his tight community into a Ponzi scam.
Because his father, Isaac Dwek, was a prominent rabbi, “one after another of the people he victimized said they trusted him,” said Sherman. “Some of them were actually married by Rabbi Dwek.”
“We are talking about smart, sophisticated people who were successful in business,” added Margolin. “They knew Solomon through the community and there was never a moment of doubt.”
“Dwek is a very smart guy,” said Sherman. “During the Ponzi scheme he would have 20 balls in the air, and he knew where every one of them was.”
“He is not book-smart,” said Margolin. “He never had the patience to be a student. But he is someone who was adept at his chosen field. He is a great con man. He is very charming and charismatic, despite his appearance to the contrary.”
And what of the Orthodox men with apparently deep religious values whom he allegedly lured into lawbreaking?
“It strikes me there is some sort of breakdown in the importance of acting like a mensch with regard to the wider world. It is important to go to yeshiva, it is important to go to shul, it is important to give your tithe to your community, is important to wear your black hat and black coat. But there are those in the Orthodox community who have suggested that the importance of acting like a mensch with regard to the wider world is a forgotten belief.”
According to Margolin, “The federal government believed, and Dwek believed” it was not uncommon to encounter money-laundering at yeshivas and charities in some Orthodox communities.
Last Friday, a Brooklyn rabbi, Mordchai Fish, pleaded guilty to laundering more than $900,000 for Dwek and concealing the money by passing it through several purported charities, known as “gemachs.”
In February, Dwek’s former partner, Joseph Kohen of Long Branch, was sentenced to two-and-a-half years in prison and ordered to pay $22.79 million in restitution for his role in the bank fraud that propped up Dwek’s real estate empire.
Until Margolin departed The Star-Ledger for a reporter’s job at the New York Post last December, he and Sherman worked together for 10 years. They spent “a lot of nights and weekends” during the past seven months writing The Jersey Sting.
They have never been able to interview Dwek, who is being held incommunicado by FBI agents as he is being prepared to be a state’s witness in upcoming trials of political figures and two of the indicted rabbis, Edmond Nahum of Deal and Lavel Schwartz of Brooklyn.
But they were able to break through walls of silence that normally surround the intensely insular Orthodox worlds in Brooklyn and Deal.
“We did it fact by fact, quote by quote, to get any access to the Syrian community or the hasidic community,” said Margolin.
“People told us it was going to be impossible, but we did talk to people,” added Sherman.
The two reporters are discussing collaboration on a second book. And sometimes they joke about The Jersey Sting going Hollywood.
“We talk about this all the time and the movie rights are still up for grabs,” said Sherman.
And recalling Jerry Seinfeld’s television sidekick, he added, “Jason Alexander might be right for the role of Dwek.”