By Ron Leir
Last Monday, March 9, at his second day on trial in Camden Federal Court for his alleged participation in a $13 million mortgage fraud scheme that, according to the government, used fake documents and “straw buyers” to make illegal profits on overbuilt condos at the Jersey Shore, former Kearny lawmaker/school trustee John Leadbeater, 58, pled guilty to a single count of wire fraud.
In return for his plea, the government dropped a second charge of money laundering for which he had been indicted (along with wire fraud) nearly two years ago.
Leadbeater, a former Kearny Board of Education vice president and a former member of the Kearny Town Council who made an unsuccessful bid for mayor in 2009, will be sentenced June 26 by U.S. District Court Judge Jerome B. Simandle in Camden.
Under federal sentencing guidelines, as a first offender, Leadbeater could face a minimum of 46 to 57 months to a maximum of 30 years in prison, depending on other factors, plus a fine of up to $1 million. He will also be expected to make restitution for any losses to the lenders.
His Jersey City defense attorneys, Thomas Cammarata and Jeffrey Garrigan, issued a statement last week which said that their client entered his plea “after lengthy negotiations with the U.S. Attorney’s office.”
In early October 2014, federal prosecutors had sought – and were granted – a three-month extension of the original Dec. 1, 2014 trial date to prepare their case against Leadbeater on the grounds that it was a “complex case,” because it required more intensive judicial management … involving multiple parties … geographically diverse witnesses … numerous expert witnesses, complex subject matter” and other factors.
In granting the government’s request for more time, Judge Simandle noted that the case involved allegations of wrongdoing involving a “voluminous” case file covering “a period of several years.”
U.S. Attorney’s Office spokesman Matthew Reilly declined to say how many witnesses the government had prepared to call or how many days the trial had been expected to last.
Asked whether Leadbeater could hold public office at some future date, Reilly said he would have to research that question.
Leadbeaters’ defense team, in their statement, sought to narrow the extent of his participation in the conspiracy.
They said their client “pled guilty to conspiracy in that he advanced deposits for buyers in certain transactions involving homes in Wildwood and Wildwood Crest … without disclosing this fact on the closing statements sent to the lenders for the buyers.” But, they added that, “His admission of guilt did not include any involvement in activities of others regarding false loan applications. He regrets his bad judgment and is anxious to put this matter behind him.”
Cammarata said that his client received a “finder’s fee” for each property for which he – not the buyers — advanced deposits and that those fees were recorded in the mortgage closing documents. While Leadbeater is not licensed as a real estate agent, Cammarata said that has no relevancy to the crime to which he has admitted guilt.
According to the plea agreement, Leadbeater was involved in seven property transactions in Wildwood and two in Wildwood Crest for which he wired loan amounts from a variety of brokers totaling $4,711,556.86 between July 24, 2007, and March 27, 2008.
However, Cammarata noted that the total loss to the lenders has been reduced to the extent that the properties involved have been resold, accounting for a reduction in the overall loss to between $1 million and $2.5 million, which will be taken into consideration by the court at sentencing.