All but one of 11 criminal charges against Meadowlands EnCap founder William Gauger were dismissed by a federal judge on Monday in a Newark courtroom as part of a plea deal with prosecutors, seemingly bringing to an end the last of the federal corruption investigations related to the controversial golf course and housing project in Lyndhurst, Rutherford and North Arlington.
Gauger was sentenced to one year of probation and a $5,000 fine by U.S. District Court Judge Claire Cecchi for admitting to defrauding North Carolina-based Cherokee Investment Services of $299 by receiving a reimbursement in that amount for a plane ticket. That March 2007 flight was canceled due to a snowstorm, and Gauger received a refund from the airline.
The submission of the fraudulent expense report was “sloppy, stupid, and ultimately criminal,” Gauger told the court in brief comments just before sentencing. “I pledge never to be here again.”
The EnCap development was embroiled in controversy almost from the beginning and it swept up lawmakers and attorneys as the project fell apart.
The plan, first approved by the state in 1999 as a way to bring economic development to an undeveloped area, moved forward quickly once former Gov. James McGreevey took office in 2002. But after the developers were granted $300 million in low-interest and no-interest loans toward cleanup of the site, state Inspector General Mary Jane Cooper launched a year-long investigation in Jan. 2007.
A bid later that year by real estate mogul Donald Trump to revive the project failed, and state taxpayers were left on the hook for more than $50 million when project executives filed for Chapter 11 bankruptcy protection in 2008.
There were two indictments that resulted from the failed EnCap plan.
Former state Sen. Wayne Bryant was acquitted in Aug. 2012 of fraud allegations. The judge concluded that the government did not prove beyond a reasonable doubt that the $100,000 a year retainer paid by EnCap developers to Bryant’s South Jersey law firm “for little or no work” was directly related to Bryant’s legislative support for the project.
A co-defendant in that case, former project attorney Eric Wisler, passed away in Aug. 2011 with the case against him unresolved.
A Jan. 2012 indictment of Gauger alleged that EnCap was falsely billed $20,000 by Gauger’s brother-in-law in 2005 for a review of concept plans for a train station at the site.
The core of that indictment, however, featured assertions by the government of an alleged shakedown by Gauger of a former friend for $100,000 as the result of an Asbury Park real estate deal. The friend was a banking executive referred by Gauger to the developer, who wound up paying the friend nearly $1 million in consulting fees for helping raise funding for the project.
But all five of those counts — including one count of extortion — as well as the EnCap-related charge were dropped last fall as part of a plea deal that led to Monday’s sentencing.
Laurence Shtasel, Gauger’s attorney, told the judge before the sentencing that Gauger — who has no criminal background — had led “an exemplary life” as a husband, father, and active community volunteer other than the lone charge before the court.
The attorney noted that since a state investigation of the failed Meadowlands EnCap condo and golf course development began in 2007, Gauger’s life “has been on hold in some ways.” Shtasel added that Gauger’s employment opportunities had been curtailed, and that “financial stresses” and “community shame” had arisen due to the nature of the charges.
“This is a bad mistake that will not be repeated,” Shtasel said of his client.
