2002-07-01 -- Barnes, Martin G. -- Guilty Plea -- News Release

Former Paterson Mayor Barnes Admits Accepting Gifts from Contractors and Tax Evasion

NEWARK - Former Paterson mayor Martin G. Barnes pleaded guilty today to mail fraud, and tax evasion, admitting that he took free trips, home improvements, a swimming pool and more from city vendors or prospective vendors, U.S. Attorney Christopher J. Christie announced.

Barnes, 54, admitted that he accepted those things of value from city vendors and concealed his receipt of those valuables in official financial disclosure forms mailed to the State of New Jersey. Barnes also admitted that he failed to disclose the same information to the Internal Revenue Service.

Assistant U.S. Attorney Perry A. Carbone told U.S. District Judge William G. Bassler that, had the case gone to trial, the government would have proved that the value of the unreported goods received by Barnes was worth approximately $200,000.

Barnes also admitted that he took official action approving city contracts with the vendors, one of which he identified as United Gunite Corp. of Irvington.

"This a sad day for the City of Paterson but also a chance to move ahead with new, honest leadership. Martin Barnes obviously fell far short in that regard," said U.S. Attorney Christopher J. Christie.

The former mayor pleaded guilty to Count One, mail fraud, of a superseding Indictment returned on January 24, 2002. He also pleaded guilty to Count 36, subscribing to a false tax return. Count One carries a maximum penalty of five years in prison and a $250,000 fine; Count 36 carries a maximum penalty of three years in prison and a $100,000 fine.

As part of a non-cooperating plea agreement, the rest of the counts in the Indictment will be dismissed at sentencing. The dismissal of those counts, however, will have only a minimal impact on the sentencing range that Barnes faces.

Under the terms of the agreement, Barnes faces an approximate range of between 24 and 37 months in prison. However, the actual sentence will be determined by Judge William G. Bassler. A sentence toward the top of that range could be imposed if Judge Bassler determines, as the government contends, that Barnes obstructed the corruption investigation.

Judge Bassler set sentencing for Nov. 18 at 10 a.m. Barnes remains free on $100,000 bail until sentencing.

Count One of Barnes' Indictment alleges that from almost his first day in office, beginning in January 1997, he began accepting things of value from contractors and individuals in exchange for favorable treatment and then concealed his receipt of those benefits by lying to the Paterson City Council and filing false financial disclosure forms with the State of New Jersey.

Barnes pleaded guilty to Count One but was not required to admit each and every thing of value he accepted. However, Count One lists them in detail. Among the items of value, but not limited to the following, were:

• Hotel expenses, meals, drinks, air fare and train fare to places including Rio De Janeiro, Reno, Nevada, Washington, D.C., Puerto Rico, London as well as other locations;

• Female companionship paid for by a city contractor on the trip to Rio De Janeiro;

• Home improvements, including a new gunite swimming pool with a waterfall provided by the contractor;

• Designer suits provided by the contractor;

• Backyard excavation worth $3,540 paid for by another contractor

• A $5,000 cash payment from a third contractor.

Despite requests from the Paterson City Council for Barnes to disclose details and the source of his extensive travel, Barnes refused to provide the information, according to Count One or the Indictment. Barnes also failed to disclose the travel and other things of value in his annual Financial Disclosure Statements, as required by the New Jersey Local Government Ethics Law, and had them mailed to the state Department of Community Affairs.

Christie credited Special Agents of the FBI, under the direction of Special Agent in Charge Louie F. Allen; Special Agents of the IRS Criminal Investigation section, under the direction of Special Agent in Charge Anne D. Fahy; and Ruth Ritzema, Special Agent in Charge, Inspector General, Department of Housing and Urban Development, for their agencies' respective roles in the Barnes investigation, as well as the ongoing investigation of public corruption in Paterson.

The case was handled by Assistant U.S. Attorneys Carbone, Deputy Chief, and Michael F. Buchanan, of the Special Prosecutions Division of the U.S. Attorneys's Office in Newark.

-end-

Defense counsel: David W. Fasset, Esq. Chatham