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McGreevey Crony Pleads Guilty

South Jersey- Millionaire developer Charles Kushner pleaded guilty Wednesday to 18 federal criminal charges, admitting he hired a prostitute to seduce his brother-in-law and mailed a video of the encounter to his sister to compel them not to help an ongoing federal probe of him.

Kushner, 50, who was Gov. James E. McGreevey’s top campaign donor, also told U.S. District Judge Jose L. Linares he defrauded the IRS by claiming more than $1 million in charitable donations and three private school tuition payments as business expenses.

Kushner also admitted lying to federal officials about nearly $400,000 in campaign contributions he made in the names of business partners, without their knowledge, to surpass legal limits on political donations.

Kushner plans to step down today as chairman of Kushner Companies, a Florham Park-based conglomerate of real estate interests controlling more than $3 billion in assets. An acting chairman will be named for the company, which wasn’t part of the guilty plea.

Linares scheduled Kushner’s sentencing for Nov. 29. U.S. Attorney Christopher J. Christie said he expects Kushner, who remains free on $5 million bail secured in part by homes in Livingston and Long Branch, to serve 18 months to two years for his crimes. Kushner also faces more than $1 million in fines.

Christie said his investigation into matters surrounding Kushner’s campaign contributions continues. Wednesday’s plea covers only witness retaliation through the videotape escapade, lying about campaign contributions and 16 counts of tax fraud.

But Kushner’s spokesman, New York public relations giant Howard Rubenstein, insisted in a statement that the plea “resolved all criminal investigations against (Kushner) himself personally,” including probes by the IRS and Federal Election Commission.

“This is a sad day,” said Kushner’s attorney, celebrity lawyer Benjamin Brafman. An “extraordinarily great man of this generation just admitted to criminal conduct and will ultimately be faced with sentencing as a convicted felon.”ADVERTISEMENT – CLICK TO ENLARGE OR VISIT WEBSITE Featured Advertisers All Shore Audubon Savings Oskar Huber Advertise with us!

Kushner, who appeared with his wife and a quartet of attorneys and was immediately surrounded by an aggressive media scrum, left the courthouse without talking to the press directly.

Kushner “accepts responsibility by acknowledging that he did something wrong and deserves to be punished,” Brafman said. “But, on balance, Mr. Kushner is an extraordinary man, an extraordinary human being.”

In addition to contributing more than $5 million to state and federal Democratic Party causes in the past decade, Kushner, the son of a Holocaust survivor, is known nationally for his philanthropy to Jewish, education and health-care causes.

“Even a good person can do something wrong. And in this case, what you have is a good man who has done something wrong,” Brafman said.

Rubenstein’s statement said, “By pleading guilty, Mr. Kushner accepts full responsibility for his conduct. He deeply regrets the poor judgment he exercised in these matters and hopes that by acknowledging his wrongdoing he will shorten the ordeal that he, his family and Kushner Companies would otherwise have endured were Charles Kushner to have continued to litigate these personal legal issues in the coming months and years.”

Christie said the court proceedings, which started with Kushner’s arrest July 13, must have been “an incredibly humiliating moment for someone of Mr. Kushner’s power and prestige.”

“There is no question that Mr. Kushner was one of the most powerful and influential forces on the political scene, both in New Jersey and across the country,” Christie said after Kushner entered his guilty plea.

“No matter how rich or powerful you are, or poor and unpowerful, if you have violated federal criminal law in the district of New Jersey, if you are corrupting our political system, this office will bring you to justice. And today Charles Kushner is brought to justice,” Christie said.

Both Christie and Brafman insisted Kushner is not – and will not be – cooperating with the government by offering them information on any new or ongoing case. Christie declined to speculate on how his cooperation could have affected the plea deal.

Brafman also said Kushner has nothing to do with McGreevey’s sudden political downfall; the governor announced last week he is gay and leaving office in November because he had an extramarital affair with a man.

Kushner has had no contact with Golan Cipel, the alleged lover – who says he is straight and was sexually harassed by McGreevey for years – and has nothing to do with Cipel’s threats to file a lawsuit against the governor, Brafman said.

“Mr. Kushner’s case has absolutely nothing to do with Governor McGreevey,” Brafman said. He described talk that Kushner is involved somehow with Cipel as “baseless false rumor.”

Sen. Joseph M. Kyrillos Jr., R-Middletown, Monmouth County, said Kushner’s guilty plea is a poor reflection on the ethical climate in Trenton since McGreevey took office.

“The Kushner saga is very symbolic of this state,” Kyrillos said. “So many people around the governor are bad choices.”

McGreevey’s office declined to comment on the guilty plea.

Kushner surrendered to federal authorities on July 13, charged with conspiracy, obstructing justice and promoting prostitution. Discussions over the past month led to a plea deal that touched on aspects of Christie’s original probe of tax fraud and questions about his political donations, plus Kushner’s efforts to thwart that investigation.

In a dark pinstriped suit, white shirt and subtle gray tie, Kushner appeared relatively calm during the proceedings, speaking quietly with his wife and lawyers Brafman and Alfred DeCotiis.

As the judge repeated the charges laid out by U.S. Attorneys Ralph J. Marra Jr. and Scott Resnik, Kushner responded with a single word: “Guilty.”

Kushner admitted he paid $25,000 to a private investigator in the fall of 2003 to hire a hooker and videotape the woman having sex with his brother-in-law, William Schulder, at the Red Bull Inn in Bridgewater.

Eventually he had to find the call girl himself, Kushner said, when the private eye failed. He later ordered associates to mail the tape to his sister, Esther Schulder, in an effort persuade the couple – former Kushner Companies employees on the opposite side in a family estrangement – not to rat him out to a grand jury.

In pleading guilty to the FEC charge, Kushner said that between 1999 and 2002, he made more than $385,000 in campaign contributions to federal politicians in the name of “certain partners.” But the partners didn’t give permission for the donations.

In June, Kushner paid a $508,900 fine – the fourth-largest ever – to the Federal Election Commission for improper donations he made in other people’s names. That fine didn’t end the federal probe into whether those donations also violated federal laws.

For the 16 tax fraud counts, Kushner admitted engaging in two separate schemes: recording over $1 million in charitable contributions as business expenses from four partnerships and diverting nearly $14,000 in company funds for private school tuition and writing the costs off as business expenses.



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