Prominent ‘Gold Coast’ developer denies fraud charges
NEWARK, N.J. (AP) — A prominent “Gold Coast” developer accused of using a bank he founded to fraudulently obtain millions of dollars in loans pleaded not guilty Tuesday.
Prosecutors in an indictment accuse Fred Daibes and an associate of lying on loan applications and misapplying funds from Mariner’s Bank over several years to benefit Daibes’ business interests.
Prosecutors accuse them of accomplishing this by recruiting borrowers without disclosing the borrowers’ connections to Daibes. Prosecutors also say Daibes and Michael McManus, chief financial officer of Daibes Enterprises, orchestrated a loan scheme to “circumvent the lending limits” from 2008 to 2013.
The loans in question amounted to about $9 million, according to the indictment.
In a statement emailed after Tuesday’s brief proceeding in federal court, Daibes said he is confident his name “will be cleared at the end of this.”
“It is unbelievable that I am being accused of defrauding the bank I own,” Daibes said.
His attorney, Lawrence Lustberg, called the charges “the worst kind of government overreach” and said evidence would show each loan was “legitimate, fully collateralized and 100 percent repaid.”
McManus also pleaded not guilty. His attorney, John Whipple, said in an email, “We are confident that when a jury hears all of the evidence a swift not guilty verdict will be returned.”
Daibes’ company is based in Edgewater, one of several towns that occupy New Jersey’s “Gold Coast,” a sliver of Hudson River waterfront north of Hoboken. The area has experienced a radical transformation over the decades as gleaming office towers and luxury high-rises have replaced factories and refineries.
A separate lawsuit filed by a developer against Edgewater last December doesn’t name Daibes as a defendant, but accuses him and the town of colluding to block the developer’s plans to erect residential buildings on the last large, undeveloped space on the waterfront.
The lawsuit claims the town’s relationship with Daibes is marked by “corrupt transactions, self-dealing and conflicts of interest” in real estate matters. Through its attorneys, the town has denied the allegations.
Daibes has called the allegations “out-and-out lies” and denied claims in the lawsuit that he receives preferential treatment from the town on zoning decisions.
This story has been corrected to show that the town of Edgewater is the defendant in the lawsuit, not Daibes.