NEWARK, NJ — Newark West Ward Councilman Joseph A. McCallum, who is also a member of Invest Newark’s board of directors, has been charged with scheming to obtain bribes and kickbacks, United States Attorney Craig Carpenito announced today.
McCallum, 65, was charged with one count of wire fraud for allegedly conspiring to using interstate wire communications to defraud Newark and Invest Newark, the city’s landbank institution nonprofit economic development agency, of the right to McCallum’s honest services, according to a statement from the U.S. Attorney's Office.
Elected as West Ward councilman in 2014 after serving as an aide to former West West representative Ron Rice, McCallum worked as a public health professional and mental health counselor.
Invest Newark, formerly known as the Newark Community Economic Development Corporation, removed McCallum from its website's board of directors list late Tuesday afternoon.
According to court documents, from 2017 to 2020, McCallum planned to receive concealed bribes and kickbacks from co-conspirator Malik Frederick, a Newark business developer who pleaded guilty on Tuesday to conspiracy to commit honest services wire fraud, and failing to report income over $100,000 on in his 2017 taxes. The funds allegedly came from developers, contracting companies and other businesses seeking contracts and approvals related to the development, construction and real estate projects.
Frederick was the point of “access” for the developers to connect with McCallum as the project sponsor. McCullum then allegedly planned to take funds from the fees that Frederick charged and pushed the projects forward using his position of power. The two co-conspirators used interstate emails and phone calls to advance their plans and cover up their tracks.
For those who refused or hesitated to pay, McCallum and Frederick intended to prevent them from obtaining contracts and work from (Invest Newark) and the City of Newark, according to documents.
McCallum is charged with receiving a $16,000 bribe from a contracting company, a $25,000 bribe from a developer and $500 in cash to conceal travel expenses for an out-of-country trip to secure a $50,000 payment from another developer. The government also charges that McCallum also solicited payments from a property seller in the West Ward as well as a developer who was looking to buy the property.
An official from Invest Newark, whose identity was not provided, also acted as a co-conspirator in another scheme involving a modular home company. Frederick wanted the company, which was in negotiations with Invest Newark on a development project to retain his company for a $40,000 payment. Half of the payment would go to the unnamed Invest Newark official, who referred Frederick to the modular home company and expected a portion of whatever Frederick would be paid, according to documents.
The modular home company was denied a contract from Invest Newark after refusing to participate in the arrangement.
Bernel Hall, CEO and President of Invest Newark, said that McCallum was removed as a member of the board of directors and that Invest Newark is cooperating with the U.S. Attorney's Office. He added that McCallum did not have a direct role in the day-to-day operations and the allegations do not involve any present employee or board member of the company.
"Since our relaunch as Invest Newark in 2019, we have strengthened our policies and procedures to prevent conflicts of interest and protect against fraud," he said. "From overseeing a COVID-19 small business grant program, piloting a Section 8 Homeownership Conversion program, launching Newark’s first cooperatively owned company, and more, we take great pride in the future of Newark, and we are committed to transparency and accountability.”
McCallum's defense counsel, Tim Donohue of Arleo & Donohue, said he plans to defend against the charges and prove McCallum's innocence.
The stunning announcement makes McCallum the first elected official in Newark to be accused of corruption since former Mayor Sharpe James in 2008. A Newark city councilmember has not been accused of fraud since the 1990s, when charges were brought against former Newark City Council President Gary Harris, at-large member Ralph Grant Jr. and Marie Villani for misuse of city funds and bribery.
The two Newark City Councilmen were indicted on federal charges of helping to grant contracts for towing concessions in return for bribes and convicted in 1995. Villani pleaded guilty and resigned from her position in 1994.
McCallum faces a maximum of 20 years of prison and a fine of $250,000. His court date has not yet been scheduled. Frederick’s guilty plea carries a maximum of three years of prison and $250,000 fines. Sentencing is scheduled for March 2, 2021.