Solomon Dwek: Bank Fraud, FBI Sting, and Prison Sentence

Solomon Dwek is a former New Jersey real estate developer who, after being caught in a $50 million bank fraud in 2006, became a federal informant whose three years of undercover work produced Operation Bid Rig III, a 2009 sweep that resulted in the arrest of 44 people, including mayors, state legislators, five rabbis, and a black-market organ broker. He was sentenced in 2012 to six years in federal prison and ordered to pay $22.8 million in restitution, and he was released in 2015.

The Real Estate Empire and the Fraud Behind It

Dwek grew up in the Syrian Jewish community centered in Deal, New Jersey. His father, Rabbi Isaac Dwek, and mother, Raizel, founded the Deal Yeshiva, a school serving the Sephardic Jewish community in Brooklyn, Deal, and nearby towns; Solomon served as its vice president and was known locally for philanthropy.1Jewish Telegraphic Agency. Who Is Solomon Dwek By his early thirties he controlled more than 350 properties across Monmouth and Ocean counties, a portfolio valued at roughly $420 million in 2006.2Asbury Park Press. Dwek Properties

The empire was a fraud. Dwek had drawn a $20 million line of credit from HSBC by falsely claiming he was buying commercial properties for another entity, when in fact the properties were either already his or worth far less than represented.3U.S. Department of Justice. United States v. Solomon Dwek, Criminal Information Prosecutors later described the broader operation as a real estate Ponzi scheme, with Dwek pulling in bank financing to buy properties that were nonexistent or that he already owned. The sentencing judge put losses at roughly $135 million.4CNBC. Snitch Who Snared NJ Politicians Gets 6 Years

The PNC Check-Kiting Scheme That Ended It

HSBC discovered the fraud and demanded repayment by April 2006. Dwek’s response was audacious. On April 24, 2006, he walked into a PNC Bank branch in Eatontown and deposited a check for $25,212,076.35 drawn on a closed, zero-balance account held by one of his own entities, Corbett Holdings II. When bank staff flagged the account as closed, Dwek claimed the corporate office was reopening it and that a wire transfer was on the way.3U.S. Department of Justice. United States v. Solomon Dwek, Criminal Information

PNC credited the funds the next morning. Dwek immediately wired out $22.79 million, including $20 million straight to HSBC to clear his overdue line of credit, leaving the PNC account overdrawn by roughly $22.8 million. He then tried to deposit a second $25 million check drawn on the same closed account at a PNC branch in Asbury Park; the bank voided it before any money moved.5FBI. Solomon Dwek Sentenced to Six Years in Prison for Bank Fraud

To buy time, Dwek enlisted his longtime mortgage broker, Joseph S. Kohen of Deal, who called a PNC employee posing as an attorney named “J.S.” and promised the incoming wire. Kohen had also forged the attorney’s signature on the original check. The scheme collapsed within weeks. On May 11, 2006, Dwek was charged with bank fraud in a federal criminal complaint. Kohen later pleaded guilty and was sentenced to 30 months in prison and $22.79 million in restitution.6U.S. Department of Justice. Joseph Kohen Sentencing

Turning Informant for the FBI

Facing up to 30 years in prison on the bank fraud alone, and with the Ponzi scheme exposed, Dwek signed a cooperation agreement with the FBI and the U.S. Attorney’s Office for the District of New Jersey and began wearing a wire.7Washington Post. Solomon Dwek, Informant Behind Rabbis Corruption Case, Released From Prison

Under the alias “David Esenbach,” he posed as a corrupt developer trying to grease approvals for construction projects, offering cash bribes to public officials from the Jersey Shore through Hudson County. FBI cameras and microphones recorded the meetings. On a second track, Dwek presented himself as a developer looking to hide assets and wrote large checks to charities controlled by rabbis in New Jersey and Brooklyn; the rabbis returned the money in cash, minus a fee, effectively laundering it through tax-exempt entities.8New York Times. Vast NJ Corruption Sweep Stretches From Mayors to Rabbis The operation ran roughly three years.

Operation Bid Rig III: The 44 Arrests

On July 23, 2009, the FBI arrested 44 people in a mass sweep announced by Acting U.S. Attorney Ralph J. Marra Jr. The investigation, called Bid Rig III, hit officials at nearly every level of local government in northern and central New Jersey.9U.S. Department of Justice. Bid Rig III Arrests

Among the political defendants:

Others charged included state assemblyman L. Harvey Smith, who accepted $15,000; Ridgefield mayor Anthony Suarez; and former assemblyman and mayoral candidate Louis Manzo, charged with accepting $27,500.12FBI. Bid Rig III Arrests More than three dozen of the 44 defendants were ultimately convicted or pleaded guilty.5FBI. Solomon Dwek Sentenced to Six Years in Prison for Bank Fraud

The Money-Laundering Rabbis

Five rabbis were charged with running money through synagogues and charities for Dwek’s undercover persona, a network that stretched across New York, New Jersey, and Israel and laundered at least $3 million between June 2007 and July 2009. The rabbis typically kept 5 to 15 percent.9U.S. Department of Justice. Bid Rig III Arrests

Eliahu Ben Haim, principal rabbi of Congregation Ohel Yaacob in Deal, was accused of laundering $1.5 million and sentenced to 60 months. He was related to Dwek by marriage; his daughter was married to one of Dwek’s brothers.13New York Times. From Riches in Real Estate to Scandal Saul Kassin, the 87-year-old chief rabbi of the Syrian Jewish community and spiritual leader of Congregation Shaare Zion in Brooklyn, pleaded guilty to unauthorized money transmitting and received two years of unsupervised probation, a $36,750 fine, and forfeiture of nearly $370,000; the judge cited his age.14CBS News. Rabbi Gets Probation in New Jersey Corruption Case Brooklyn rabbi Mordchai Fish, charged with laundering $585,000, received 46 months.5FBI. Solomon Dwek Sentenced to Six Years in Prison for Bank Fraud Edmund Nahum, a Deal rabbi, was charged with laundering $185,000, and Lavel Schwartz, a Brooklyn rabbi and Mordchai Fish’s brother, was also charged.9U.S. Department of Justice. Bid Rig III Arrests

The Organ Trafficking Case

The investigation also produced the first-ever conviction under the National Organ Transplant Act of 1984. Levy Izhak Rosenbaum, a Brooklyn man originally from Israel, was charged with brokering black-market kidney sales. According to prosecutors, he recruited vulnerable donors in Israel for roughly $10,000 each and sold the kidneys to American patients for $120,000 to $160,000, coaching both sides to lie to hospital staff so the transplants would look like voluntary donations.15FBI. Defendant Admits Orchestrating Three Completed Transplants From Israeli Donors for New Jersey Residents

On a recorded call with Dwek, Rosenbaum said he had been “doing this a long time” and knew it was illegal. He pleaded guilty to three counts of acquiring, receiving, and transferring human organs and one count of conspiracy, and was sentenced to 30 months by U.S. District Judge Anne E. Thompson in Trenton.15FBI. Defendant Admits Orchestrating Three Completed Transplants From Israeli Donors for New Jersey Residents

Dwek’s Own Plea, Bail Revocation, and Sentence

On October 20, 2009, Dwek pleaded guilty in federal court in Newark before U.S. District Judge Jose L. Linares to one count of bank fraud and one count of money laundering for the PNC scheme.16FBI. Solomon Dwek Pleads Guilty He was released on a $10 million bond backed in part by home equity from his mother-in-law and sister-in-law.1Jewish Telegraphic Agency. Who Is Solomon Dwek He also pleaded guilty to state charges of misconduct by a corporate official for defrauding Amboy Bank of $13 million in loans meant to fund the purchase and rehabilitation of a Manhattan building.17NJ.com. Another Sentence for Solomon Dwek

In June 2011, Judge Linares revoked Dwek’s bail after Dwek failed to return a rental car and then lied to his FBI handlers about it. The judge called Dwek “a consummate defrauder and an extremely cunning liar.”18NJ.com. FBI Informant Solomon Dwek Sentenced Dwek then spent 16 months in jail before sentencing.

On October 18, 2012, Judge Linares sentenced Dwek to 72 months in federal prison, five years of supervised release, and $22.8 million in restitution to PNC Bank. Sentencing guidelines had called for nine to 11 years, and prosecutors had recommended three to four years to reward his cooperation and encourage future informants. The judge rejected the government’s recommendation, calling the underlying bank fraud “brazen,” while also citing Dwek’s “extraordinary cooperation.”19NJ.com. Infamous Federal Informant Solomon Dwek Sentenced Dwek was permanently barred from the real estate business.20Courier-Post. Solomon Dwek Released From Federal Prison The next day, a Monmouth County Superior Court judge added a four-year state sentence for the Amboy Bank fraud, to run concurrently with the federal term.17NJ.com. Another Sentence for Solomon Dwek

Fallout in Deal and Release From Prison

The reaction inside the Syrian Jewish community of Deal was severe. The 2006 bank fraud arrest had already damaged Dwek’s standing; his role as a government informant against fellow community members provoked deeper anger. He was labeled a “moser,” a Hebrew term for someone who informs on his own people, and treated as a pariah.21NJ Monthly. Deal Gone Sour His parents disowned him, and his father publicly denounced the act of a Jew informing on other Jews during a synagogue address. At sentencing, Dwek told the court his wife and children had been ostracized.20Courier-Post. Solomon Dwek Released From Federal Prison

In March 2015, Dwek was released from the Federal Correctional Institution in Cumberland, Maryland, having served less than 30 months of his six-year sentence after credit for good conduct and for the 16 months he spent in jail following bail revocation.22NJ.com. Solomon Dwek at Center of Federal Corruption Sting Released On March 17, 2015, he was transferred to a halfway house in Baltimore and then placed on home confinement, permitted to leave for employment, medical appointments, and certain family activities. He remained barred from real estate and was ordered to pay his $22.8 million restitution in $300 monthly installments.20Courier-Post. Solomon Dwek Released From Federal Prison