Atlantic City mayor resigns after pleading guilty to stealing $87K from his own nonprofit
Atlantic City Mayor Frank Gilliam Jr. is the latest controversy in a line of corrupt city officials so long that it spawned a hit HBO TV series.
Updated 6:07 p.m.
Atlantic City’s mayor resigned Thursday evening after pleading guilty earlier in the day to stealing more than $87,000 from a youth basketball club he founded and using it for personal expenses.
Frank Gilliam Jr.’s resignation came about an hour after New Jersey Attorney General Gurbir Grewal released a statement saying he had filed court papers “seeking his swift removal” from office.
Gilliam appeared Thursday in federal court in Camden, where it emerged that roughly half the amount of money he took from basketball program AC Starz was recovered from his home when FBI agents raided it last December.
He was released after posting a $100,000 bond with the court.
Gilliam did not speak to reporters as he left the U.S. courthouse in Camden and his attorney issued a statement saying the charge related to conduct in the mayor’s personal — as opposed to official — capacity.
“Mr. Gilliam, who is a lifelong resident of Atlantic City, has admitted his wrongful conduct, is accepting responsibility for his actions, and is genuinely remorseful,” his attorney, Harry Rimm, said.
At an afternoon news conference, Democratic Gov. Phil Murphy called Gilliam’s actions “despicable” and demanded he resign.
“He has squandered the trust and confidence of his community and his administration to lead that community,” Murphy said, according to The Press of Atlantic City.
Gilliam was elected mayor in 2017 after serving as a city councilmember.
City Council President Marty Small was expected to take over as acting mayor, city officials said.
The FBI made it known that a federal investigation was afoot when it raided Gilliam’s Atlantic City home last year. But his court appearance Thursday came as a surprise. The FBI had remained silent about why it conducted the raid, no indictment was brought in the case, and Gilliam had continued to serve as mayor in the intervening months.
Gilliam, 49, admitted to U.S. District Judge Joseph H. Rodriguez that from 2013 to 2018, he solicited $87,215 from donors on the false pretense that the money would go toward the basketball club he founded in 2011.
In reality, Gilliam used a “substantial portion” for personal expenses. Prosecutors said that included luxury clothes, expensive meals, and trips. The wire fraud charge relates to a solicitation he made of a Philadelphia donor via fax in 2014.
The wire fraud count carries a maximum penalty of up to 20 years, although Gilliam will likely face less when sentenced on Jan. 7, 2020. He must also repay the donors whose money he diverted into his own pocket. The $41,335 recovered during the FBI raid will be applied to his restitution obligation, prosecutors said.
In a document released by the government after the guilty plea, prosecutors said some of the money was also solicited under the false pretense it would be used to buy school supplies for underprivileged children.
“When a scheme depletes [a] charity for children, it’s unconscionable,” FBI Special Agent in Charge Gregory W. Ehrie said in a statement. “But when the fraud is perpetrated by someone the public trusts, it damages the community’s confidence in their public servants.”
Gilliam now joins a long list of Atlantic City officials who have pled guilty to crimes and given the resort town a reputation for corruption. As recently as 2007, four of the city’s last eight mayors had been arrested on corruption charges and one-third of the nine-member City Council was either in prison or under house arrest.
Mayor Michael Matthews in 1984 admitted to extortion as part of a wide-ranging sting operation against organized crime.
His successor, Robert Usry, pleaded guilty to violating a campaign finance law after prosecutors accused him of accepting cash to support an ordinance.
And in 2007, Mayor Robert Levy temporarily went missing amid rumors of a federal investigation. He later admitted to falsifying his military records to receive veteran benefits.
The Associated Press contributed reporting.
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