2002-04-03 -- Luongo, Gerald J. -- Sentencing -- News Release

TRENTON - The former mayor of Washington Township in Gloucester County was sentenced to 13 months in prison for misappropriating for his personal use legislative and mayoral campaign funds, as well as money from a community programs fund, U.S. Attorney Christopher J. Christie announced.

U.S. District Judge Anne E. Thompson sentenced Gerald J. Luongo, 63, now of Pompano Beach, Fla, and ordered him to surrender to U.S. Marshals within five days of the Bureau of Prison's designation of a facility. Meanwhile, Luongo remains free on a $100,000 personal recognizance bond.

Judge Thompson also ordered Luongo to pay $14,850 in restitution and a fine of $21,140. Combined those figures equal the full amount of the loss which Luongo stipulated to in his plea agreement with the government.

Further, Luongo must pay the Internal Revenue Service $25,794 in taxes, penalties and interest on the amount of misappropriated funds.

Luongo pleaded guilty on Nov. 1 to Count One (mail fraud) and Count Three (tax fraud) of a five-count corruption Information, which charged him with diverting approximately $35,990 for personal, non-campaign expenses, according to Assistant U.S. Attorney Treby Williams.

Among those expenses, Luongo told Judge Thompson, were home mortgage payments, maintenance fees on a Manhattan apartment, credit card debt, vacation rentals, family celebrations at restaurants, utility bills and $7,496 toward the purchase of a Chevy Blazer.

Luongo also pleaded guilty to filing a false tax return for the 1997 tax year for failing to report the diverted income to the IRS.

The statutory maximum for Count One is five years and a $250,000 fine; on Count three it's three years and a $100,000 fine.

Under U.S. Sentencing Guidelines, Judge Thompson determined Luongo's actual sentence based on a formula that takes into account the severity and characteristics of the offense and other factors. Parole has been abolished in the federal system. Under Sentencing Guidelines, defendants who are given custodial terms must serve nearly all that time.

Judge Thompson denied a Luongo's request for a downward departure from the Sentencing Guidelines. Luongo argued that he should get a reduction in his sentence based on what he and his attorney described as extraordinary charitable work and his prior good works in community service.

During his plea hearing, Luongo admitted his involvement in two schemes described in the Information.

Count One described how Luongo defrauded contributors of his mayoral and state assembly campaigns and the Mayor's Community Fund. Luongo admitted that he did that by illegally diverting approximately $35,990 in campaign and community funds between January 1996 and December 1999, to pay for personal, non-campaign expenses.

Luongo violated the mail fraud statute by mailing false campaign fund reports to the New Jersey Election Law Enforcement Commission and false annual financial statements to the New Jersey Department of Community Affairs. Those falsified documents, which omitted diverted funds, were part of Luongo's efforts to conceal the fraudulent use of the campaign and community funds, according to the Information.

Count Three of the Information charged that Luongo filed a false 1997 U.S. Individual Income Tax Return, in violation of the tax evasion statute.

Luongo served three consecutive terms as mayor of Washington Township between Jan. 1, 1988, and Dec. 31, 2000, according to the Information. Luongo was defeated for re-election in November 2000. Luongo also served one term in the state Assembly, from Jan. 1, 1998, and Dec. 31, 1999. He was defeated for re-election in November 1999.

Luongo maintained and controlled mayoral and assembly campaign funds as well as a Mayor's Community Fund, to which individuals and companies contributed money to support community projects in Washington Township.

Luongo told Judge Thompson that between January 1996 and December 1999, he deposited more than $350,000 in contributions into mayoral and assembly campaign accounts and approximately $19,000 into the Mayor's Community Fund account.

Despite his public duty to contributors to honestly and faithfully identify all expenditures in those accounts, Luongo knowingly and deliberately breached that duty and used those contributions for personal expenses.

Pursuant to a plea agreement, Judge Thompson dismissed three of five counts of tax fraud. However, the plea agreement stipulated that Luongo be held responsible for all of the conduct described in all counts of the Information, and Judge Thompson considered all of the relevant conduct in passing sentence.

Christie credited Special Agents of the FBI's Cherry Hill field office, under the direction of Acting Special Agent in Charge Thomas Harrington in Philadelphia; and Special Agents of the IRS Criminal Investigation Section, under the direction of Special Agent in Charge Anne D. Fahy in Newark, with bringing the case against Luongo.

The government is represented by Assistant U.S. Attorney Williams of the U.S. Attorney's Criminal Division in Trenton.

Defense Attorney: Rocco Cipparone, Jr. Esq. Haddon Heights