Jersey City Mayor Gerald McCann Indicted on Fraud Charges
Jul. 22, 1991
NEWARK, N.J. (AP) _ The combative mayor of Jersey City, one of the state's most powerful Democrats, was indicted on fraud charges Monday for misusing money from a bank that later failed, authorities said.
The 16-count federal indictment charged that Mayor Gerald McCann used most of the $300,000 for himself rather than for a hotel and recreation project that had been planned by his private company.
U.S. Attorney Michael Chertoff said the fraud took place while McCann was out of office between 1985 and 1989. During that time, McCann was running Historic Equishares Inc., a corporation he set up in 1986.
McCann, a 41-year-old Democrat, was elected to a second four-year term in 1989, after being voted out of office in 1985.
According to court papers, McCann persuaded the savings and loan, Southern Floridabanc, to invest $300,000 in a hotel and recreation project.
The plans never got off the drawing board, and Boca Raton-based Southern Floridabanc, saddled with millions of dollars in bad real estate loans, was declared insolvent in April 1987.
McCann didn't tell bank directors that the plans were ditched, and then transferred the money to pay credit card bills and other personal expenses, the indictment said.
He was charged with eight counts of mail fraud, three counts of wire fraud, one count of bank fraud, one count of tax evasion, two counts of making false statements to the IRS and one count of failing to file personal income tax.
If convicted of all counts, he faces up to 76 years in prison and more than $1 million in fines.
Rumors that McCann would be charged have swirled for years, and he has said in the past several months that he expected to be indicted.
McCann had repeatedly said he could account for all the money, but denied requests by reporters to do so.
McCann has earned a reputation as one of the city's strongest mayors since the days of Frank ''Boss'' Hague. Hague controlled the city as a virtual fiefdom from 1917 to 1947, and once declared, ''I am the law.''