White Collar Crime News

Atlantic City attorney and business partner indicted for official misconduct August 5, 2009

This is an interesting case.  On one hand, these guys had the inside track and made a profit, but on the other hand, it seems like everything was out in the open and obviously traceable.  Thus, I fail to see a real criminal intent here.  I would have to see some evidence, but this might be a good case for trial.  There is no fraud alleged from what I can see.  It seems more like a civil case to me and the mandatory stip with the official misconduct charge for these guys seems way to harsh. 

I also have to question the case against the business partner.  I think they will have to show that he had some criminal knowledge here which may be very hard for them to do.

TRENTON – Attorney General Anne Milgram today announced that a former attorney for Atlantic City has been indicted on official misconduct charges for assigning city tax sale certificates to his business partner, who used them to acquire four undeveloped properties for their real estate investment firm. The business partner was also indicted.

According to Director Deborah L. Gramiccioni, the Division of Criminal Justice obtained a state grand jury indictment charging Joseph R. Dougherty, 45, of Ventnor, a former deputy solicitor and counsel for Atlantic City, and his business partner, Brian P. Curran, 49, of Ventnor, with three counts of official misconduct and one count of misconduct by a corporate official, all second-degree crimes. The indictment resulted from an investigation by the New Jersey State Police Official Corruption Bureau and the Division of Criminal Justice Corruption Bureau. The indictment was voted on July 29 but handed up in court today.

“This is a classic case of corrupt self-dealing,” said Attorney General Milgram. “Dougherty acted in his official capacity, despite his clear duty to refrain from being involved in the transactions, to ensure that properties that were subject to city tax liens were received by his business partner so they could both profit through their real estate firm. The defendants flagrantly violated state law, which strictly prohibits public servants from taking official action in matters where they have a personal or financial interest.”

Tax sale certificates are sold by municipalities. They enable the purchaser to foreclose and take title to a property on which the city holds liens for unpaid taxes. In some cases, they are sold for the full amount of the tax liens; in others, they are sold to the highest bidder who meets a minimum bid. The municipality thereby loses any claim to past unpaid taxes.

In July 1999, Dougherty and Curran formed Bryce Madison LLC, a real estate investment firm. Beginning in June 1999 and continuing through June 2002, Dougherty was employed as deputy city solicitor in the Atlantic City Solicitor’s Office. From 2002 through 2006, Dougherty served as outside counsel for Atlantic City, providing legal services on real estate and tax matters. In both capacities, Dougherty was responsible for tax sale matters for the city, including handling the legal work involved in approving and assigning tax sale certificates.

The indictment alleges that Dougherty violated his official duties by participating, first as deputy solicitor and later as counsel for Atlantic City, in the sale of city tax sale certificates to his business partner, despite the clear conflict of interest presented. Dougherty approved or prepared resolutions, which were approved by the city council, authorizing the sale of four city tax sale certificates that were purchased by Curran. Dougherty also prepared the legal documents that assigned the four certificates to Curran or, in one instance, to their real estate investment firm, Bryce Madison.

The following four properties, all vacant lots, were acquired by Curran or Bryce Madison:

18 North Connecticut Avenue (2 adjacent properties) – Curran paid $4,000 for the two tax sale certificates for these lots in January 2002. As deputy solicitor, Dougherty approved the form and legality of the resolution of the city council authorizing the auction of the certificates. He also prepared the legal documents assigning them to Curran. Curran obtained title to the properties through foreclosure in 2004. Bryce Madison received more than $45,000 in lease payments on the two properties between 2006 and 2008 from the Atlantic City Special Improvement District, which had a warehouse for its landscaping unit adjacent to the properties. In 2008, Bryce Madison sold both lots to a private developer for $110,000. Curran subsequently issued checks payable to himself and Dougherty from the firm’s bank account totaling $89,700.

258 North Nevada Avenue – Curran paid $2,018 for the tax certificate for this property in December 2005. As counsel for the city, Dougherty prepared the resolution of city council authorizing sale of the certificate. He also prepared the assignment that transferred the certificate to Curran. In 2008, Curran obtained title to the property through foreclosure and sold it for $20,000. The sale proceeds were deposited into a bank account of Bryce Madison, and Curran subsequently issued checks payable to himself and Dougherty totaling $17,600.

21 North New Jersey Avenue – Curran paid $10,797 for the tax certificate for this property, which was assigned to Bryce Madison in December 2006. As counsel for the city, Dougherty prepared the resolution of city council authorizing sale of the certificate. He also prepared the assignment that transferred the certificate to Bryce Madison. Bryce Madison obtained title to the property through foreclosure in July 2008. The property is currently under an agreement of sale to a private developer.

“The transactions chronicled by our detectives and attorneys in the State Police and Division of Criminal Justice present what we allege in the indictment to be clear cases of official misconduct,” said Director Gramiccioni. “Dougherty was there at the start, signing or initialing each of the tax sale certificates in his official capacity, and he was there at the end as he and Curran sold the properties through their real estate firm and reaped a profit.”

The investigation was conducted for the State Police Official Corruption Bureau South by Detective John Scalabrini, Detective Anthony Carugno and Lt. Robert Shulte. It was conducted and coordinated for the Division of Criminal Justice Corruption Bureau by Deputy Attorney General Peter Lee, Deputy Attorney General Robert Czepiel Jr., Detective John Sheeran, Detective Edward Augustyn, Investigator Wayne Cummings, Special Investigator Maureen Graham, Analyst Alison Callery, and Jenny Hsu. Deputy Attorneys General Lee and Czepiel presented the case to the grand jury.