Developer convicted of bribing Menendez pleads guilty to bank fraud

One of the businesspeople convicted this summer of bribing former Sen. Bob Menendez pleaded guilty Thursday to a separate federal bank fraud charge, continuing a fall from grace for one of New Jersey’s most powerful real estate developers.

The developer, Fred Daibes, literally rebuilt Edgewater, New Jersey, turning a once-industrial strip of riverfront properties into a “Gold Coast” of high-rises with million-dollar views of Manhattan.

Daibes, an affable former refugee with a rags-to-riches story, remains beloved by allies in Edgewater for his generosity and for the mark he left on the landscape. During the two-month Menendez trial, one government witness called one of Daibes’ apartment complexes “the most beautiful building I’ve ever seen.”

The bank fraud case, a multi-count indictment filed in 2018, involves another part of 67-year-old Daibes’ once sprawling empire: a bank he once chaired called Mariner’s Bank.

Federal prosecutors in New Jersey alleged that between 2008 and 2013, Daibes and others conspired to avoid federally imposed lending limits by having Daibes’ friends and relatives falsely apply for loans in their own names that were, in actuality, for Daibes.

According to a press release from the US Attorney’s Office in New Jersey , Daibes pleaded guilty Thursday to making false entries to improperly obtain a $1.8 million loan from his own bank.

The crime Daibes pleaded guilty to has a maximum prison time of 30 years and maximum fine of $1 million. Sentencing in the bank fraud case is scheduled for Jan. 23, 2025 — months after the Oct. 29 sentencing in the Menendez case, where Daibes was found guilty of bribing the senator with piles of cash and gold bars .

Daibes’ influence over Edgewater long been subject of scrutiny. A state investigation last year found Edgewater Mayor Michael McPartland had received “below market, payment-deferred and interest free rent” at one of Daibes’ luxury apartment buildings. That same investigation also found a former councilmember’s husband with ties to the Genovese crime family lived rent-free in a Daibes’ building for years.

But all Daibes’ business interests and legal troubles would have been relatively local matters, except for his decades-long friendship with Menendez and the ensuing indictment and trial in Manhattan.

The bank fraud case was a major part of the Menendez trial. Federal prosecutors in New York said that Menendez had attempted to intervene in the bank fraud case, which was being handled by federal prosecutors in New Jersey.

To do that, the jury found, Menendez first tried to influence who would become federal prosecutor in New Jersey and then tried to influence the office’s handling of Daibes’ case.

Daibes and Menendez are both contesting the jury’s verdicts .

The top federal prosecutor in New Jersey, Philip Sellinger, who was at the center of Menendez’s attempts to influence the Daibes case, was recused from Daibes’ case. The guilty plea was announced Thursday following a court hearing by Vikas Khanna, Sellinger’s No. 2.

Before becoming the U.S. attorney in New Jersey, Sellinger had been involved in a lawsuit targeting a Daibes real estate project — but he was also Menendez’s friend and Menendez, who helped President Joe Biden select Sellinger for the job, believed Daibes was being treated unfairly. Prosecutors in New York did not accuse Sellinger of any wrongdoing, but his testimony during the trial about a key meeting raised questions about his candor , with one portion conflicting with the sworn testimony of another government witness who was a longtime aide to Menendez.

Daibes and his attorney in the bank fraud cause always argued it was a misguided, in part because, according to a Daibes filing attempting to dismiss the case several years ago, “all of the loans at issue were fully repaid with interest and neither the bank nor the FDIC is alleged to have suffered even a single dollar of financial harm.”