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Opening Arguments Begin in Racketeering Trial of N.J. Politician

September 26, 1988

CAMDEN, N.J. (AP) _ A former state senator charged with racketeering was driven by greed when he masterminded a plot to defraud millions of dollars from a union pension fund, a prosecutor said Monday.

David Friedland, 50, a former legislator from Jersey City who tried to fake his death in 1985, is accused of heading a $20 million swindle of the pension fund of Local 701 of the Teamsters in North Brunswick.

″This case is about greed, corruption and cover-up,″ Assistant U.S. Attorney J Imbert said in opening arguments before Chief U.S. District Judge John F. Gerry.

″What David Friedland did was to try to set up his own retirement plan with truckers’ money,″ Imbert told jurors.

The indictment against Friedland contains 47 counts, including racketeering, perjury and wire and mail fraud. The indictment also says Friedland violated the Employee Retirement Income Act of 1974 by participating in the business of the pension fund despite a prior conviction that prohibited him from doing so.

Friedland was convicted in 1980 of taking kickbacks for arranging a loan from the Local 701 pension fund.

According to the indictment, Friedland and former Union County Assemblyman Joseph J. Higgins defrauded the Local 701 pension fund through a bogus mortgage company they allegedly established in Florida.

However, defense attorney John Yacovelle said the deal began as a legitimate business transaction and that there was no cover-up of Friedland’s dealings.

″The game plan was to loan it out and make money for the union. I don’t think there was ever a scheme to defraud the pension fund,″ he said. ″Unfortunately there were some bad loans made.″

Higgins, who was the government’s key witness during the trial of Friedland’s co-defendants, testified that he and Friedland skimmed $3 million from the fund for themselves and put the rest of the money in bad mortages and risky loans.

Higgins pleaded guilty to racketeering charges and the three co-defendants, all former Local 701 officials, were convicted in December of accepting kickbacks from Friedland.

Friedland will take the stand and admit to paying cash kickbacks to the former Local 701 officials in 1982, the defense said.

″He paid them because his life was threatened,″ said Peter Willis, another defense attorney. ″He was told that a contract was out on him.″

The defense said that in early Septmeber 1985, Friedland learned he probably would not get a sentence reduction for the prior conviction involving the pension fund, although he had cooperated with the government in return for a lighter penalty.

″The result of that is the famous scuba diving accident,″ said Yacovelle.

Friedland staged a fake drowning in the Bahamas on Labor Day 1985, just before being indicted in the pension fund swindle.

The disbarred attorney was the subject of a worldwide search until he was arrested Dec. 12 in the Maldive Islands. He is being held without bail.

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