Ex-City Councilman In Newark Sentenced To Prison For Bribery, Kickback Scheme

NEWARK, NJ — A former city council member in Newark has been sentenced to 18 months in prison in connection with a real estate-related bribery scheme, prosecutors say.

Joseph A. McCallum Jr., 66, of Newark, previously admitted to “scheming to obtain bribes and kickbacks and subscribing to a false personal tax return for 2018,” according to the U.S. Attorney’s Office.

Last week, federal prosecutors announced that McCallum has been sentenced to 18 months’ imprisonment and one year of supervised release.

McCallum formerly served as a councilman in Newark's West Ward. He previously served as a member of the board of directors of Invest Newark, formerly known as the Newark Community Economic Development Corporation (NCEDC), which removed him from the board in 2020 after the bribery allegations surfaced.

Another person connected to the scheme, Malik Frederick, 65 – a former consultant for developers seeking construction and real estate deals in Newark – was sentenced to 25 months’ imprisonment and one year of supervised release on Dec. 4, prosecutors said.

Here’s how the scheme worked, authorities said:

“From 2017 through February 2020, Frederick paid concealed bribes and kickbacks to McCallum, who was then a member of the Newark City Council, representing the West Ward of Newark, and an NCEDC board member. These bribes and kickbacks were funded by developers, contracting companies, and other businesses seeking contracts and approvals principally related to development, construction, and real estate projects and deals in Newark. Frederick and others solicited these developers to hire Frederick’s consulting company for ‘access,’ and were introduced to McCallum as the councilman behind the project or deal of interest to them. McCallum then received concealed bribes and kickbacks from the fees that Frederick obtained from those who retained his company.”

In exchange, McCallum used his official positions on the city council and NCEDC to provide assistance in support of the projects and deals of interest to the developers and others who retained Frederick’s company, prosecutors said.

For those who refused to pay or were hesitant to pay the fees that Frederick charged, McCallum and Frederick intended to prevent them from obtaining contracts and work from the NCEDC and the City of Newark. McCallum and Frederick took significant steps to conceal these bribes and kickbacks and other material aspects of their arrangement and dealings with these developers and others, prosecutors said.

Authorities said the bribes and kickbacks that McCallum sought and received through Frederick included:

• On April 11, 2017, McCallum accepted a $16,000 check from Frederick’s company bank account in exchange for McCallum’s official assistance and favors for Frederick as specific opportunities related to construction projects in Newark arose that were of interest to the contracting company.
• On October 29, 2018, McCallum accepted a $25,000 check from Frederick’s company bank account in exchange for McCallum’s official assistance to Developer 1’s company in acquiring City-owned properties in the West Ward for a redevelopment project.
• From October 2019 through early 2020, McCallum also sought to obtain bribes from Frederick funded by Developer 2’s company, which was seeking to acquire and redevelop properties in Newark, including multiple City-owned lots in the West Ward and the City Council’s passage of a resolution for a redevelopment agreement related to those lots. On October 9, 2019, McCallum accepted $500 in cash from Frederick at a cigar lounge in Newark, funded by one of the monthly payments that Developer 2’s company made to Frederick’s company in relation to the redevelopment agreement that Developer 2 sought. In addition, in early 2020, McCallum, using Frederick to assist him, sought a balloon payment of $100,000 from Developer 2 once McCallum secured the City Council’s approval of the redevelopment agreement with the passage of the official resolution approving the deal.
• From October 2019 through January 2020, McCallum planned to share payments with Frederick from a business owner in Newark seeking to sell property to and from Developer 1, who was seeking to acquire and develop the property, in exchange for McCallum’s official assistance to ensure Developer 1’s acquisition and eventual development of City-owned lots adjoining the Seller’s Property.

In addition to paying the bribes and kickbacks to McCallum and attempting to obtain payments to be used for bribes and kickbacks, Frederick sought to have a modular home company that was in negotiations with the NCEDC on a development project in Newark to retain Frederick’s company and obtain a $40,000 payment, prosecutors said.

Frederick intended to share the $40,000 payment with a NCEDC official who referred Frederick to the modular home company and expected a portion of whatever Frederick would be paid. After the modular home company refused to retain Frederick’s company, it did not receive a contract from the NCEDC, prosecutors said.

McCallum previously pleaded guilty to one count of wire fraud for devising a scheme, using interstate wire communications, to defraud Newark and the NCEDC of the right to McCallum’s honest services and one count of subscribing to a false personal tax return for calendar year 2018.

Frederick previously pleaded guilty to participating in the honest services wire fraud conspiracy and one count of subscribing to a false personal tax return.

Send local news tips and correction requests to eric.kiefer@patch.com