Ex-banker at center of U.S. indictment of Sen. Bob Menendez

Ting Shen/Photographer: Ting Shen/Bloomber

WASHINGTON – Sen. Bob Menendez, D-N.J., a prominent member of the Senate Banking Committee, and his wife have been indicted on charges they took bribes from New Jersey businessmen including a former community bank executive, according to the Justice Department.

Menendez and his wife Nadine Menendez allegedly accepted hundreds of thousands of dollars in bribes in exchange for exerting political influence on the businessmen's behalf. 

In a 39-page indictment unsealed Friday, federal prosecutors accused Menendez of sharing sensitive information with the government of Egypt and taking other steps to benefit the businessmen, in exchange for cash, gold bars, mortgage payments and other valuable items. 

According to federal prosecutors, Menendez promised "and did use his influence and power" to recommend Philip R. Sellinger as U.S. attorney for New Jersey, because Menendez believed he could influence him with respect to the federal prosecution of former bank executive Fred Daibes. Sellinger is not accused of wrongdoing in the indictment. 

Daibes is one of three prominent New Jersey businessmen named in the indictment, alongside Wael Hana, the founder of a halal meat certification company that serves Egypt, and Jose Uribe, a former insurance agent. 

At the time he made gifts to Menendez, Daibes was facing federal bank fraud charges that could have come with a decade-long prison sentence. Daibes founded and was formerly CEO and chairman of the $414 million-asset Mariner's Bank in Edgewater, New Jersey, which was bought by nearby Spencer Savings Bank in 2021 for an undisclosed cash payout.

Representatives from Spencer Savings did not immediately comment on Friday.

Daibes and an associate had been accused by federal prosecutors in 2018 of circumventing state and federal limits on lending to a single borrower, according to a grand jury indictment. 

Allegedly, Daibes used friends and relatives to secure millions of dollars in loans without the knowledge of Mariner's Bank or the Federal Deposit Insurance Corp. between 2008 and 2013. Prosecutors say associates would obtain loans from the bank and turn the funds over to Daibes, then submit falsified documents to hide the fact that Daibes was the ultimate beneficiary. In some instances, Daibes was said to have voted to approve the loans as a member of the bank's loan committee.

Last year, Daibes pleaded guilty to a single count of making false entries in connection with a loan document, paid back a $1.8 million loan and didn't serve prison time, according to his plea agreement.  

In January 2019, the Federal Reserve Board barred Daibes from any involvement with any insured depository, bank or bank holding company. According to court records, Daibes has remained active in his real estate business and has been granted permission to leave the country to meet with investors in London and Qatar to finance one of his development projects.

Attempts to reach Daibes through his attorney in the federal fraud case were unsuccessful Friday afternoon.

In response to the indictment Friday, Menendez said in a statement that the "facts are not as presented" by prosecutors. 

"The excesses of these prosecutors is apparent," Menendez said in the statement. "They have misrepresented the normal work of a congressional office. On top of that, not content with making false claims against me, they have attacked my wife for the long-standing friendships she had before she and I even met. Those behind this campaign simply cannot accept that a first-generation Latino American from humble beginnings could rise to be a U.S. senator and serve with honor and distinction. Even worse, they see me as an obstacle in the way of their broader political goals." 

Menendez is the third most senior Democratic member on the Senate Banking Committee, behind panel Chairman Sen. Sherrod Brown, D-Ohio, and Sen. Jack Reed, D-R.I. 

It's not immediately clear how the indictment might affect Menendez's work on the committee. According to a schedule from the committee issued after the indictment was made public, Menendez is still set to chair a subcommittee hearing on flood insurance on Wednesday, Sept. 27, the same day he's now expected to appear in Manhattan federal court. 

Brown's office did not respond to a request for comment on if or how the indictment will affect the committee's schedule. Menendez's office also did not comment beyond the statement. 

On the committee, Menendez championed the nomination of Adriana Kugler to the Federal Reserve Board; she was sworn last week and is the first Hispanic person to serve in that position. 

He was also a promoter of the SAFER Banking Act, which aims to make it easier for financial institutions to serve cannabis businesses. The bill was already facing an uphill climb given its uncertain number of Republican supporters. It is scheduled to be considered by the committee Wednesday, also. 

Menendez is up for reelection in 2024. In 2015, a federal grand jury indicted Menendez on bribery, conspiracy and fraud charges, although that case ended with a mistrial in 2017, and Menendez won reelection after that incident.