Prison bureau puts Kushner's release on hold

His eligibility is under review
Friday, February 24, 2006

Star-Ledger Staff

Charles Kushner isn't coming home just yet.

The U.S. Bureau of Prisons is postponing the Livingston businessman's release from an Alabama prison while it reviews his eligibility for a substance-abuse program, Kushner's spokesman and two sources involved in the case said yesterday.

Kushner, who says he is an alcoholic, was expected to be transferred to a halfway house in New Jersey after serving less than half of his two-year sentence.



Kushner, 51, was expected to arrive at the halfway house as early as Tuesday and possibly return to work at his family's real estate business immediately. His return is on hold until the review is complete, two sources close to Kushner said.

The decision is a setback for the millionaire developer who was convicted of cheating on his taxes, hiding campaign donations and retaliating against a grand jury witness. The residential substance-abuse treatment program is the only one in the federal prison system that allows inmates to earn credit against their sentences.

Federal prosecutors and FBI agents said they believe Kushner faked his way into the program.

Michael Drewniak, a spokesman for U.S. Attorney Christopher Christie, declined comment yesterday.

Carla Wilson, a spokeswoman for the Bureau of Prisons said she could not comment on whether Kushner's case was under review. She said that, in general, she did not know how common such reviews were or how long one would take.

According to prison records, Kushner's release date is still set for Aug. 26.

He has already completed a 500-hour program in Alabama and has only the residential portion left, said a source close to Kushner.

CONTINUED   1 | 2  Next  for rest of report.

1/8/06 Star-Ledger's Matthew Futterman gives us a glimpse of Charles Kushner's empire today, while Charles sits in a prison on Maxwell Air Force Base, in Montgomery, Alabama. However, unlike other prisoners, Kushner's wife and kids arrive for weekly visits via a private plane. Click for the story.

Kushner Sentenced -

Kushner sentenced to two years in witness plot
Tycoon's lawyers cite philanthropy but feds say he felt above the law

Saturday, March 05, 2005
Star-Ledger Staff
Real estate magnate Charles Kushner was sentenced yesterday to two years in federal prison for violating tax and campaign laws, and for retaliating against an FBI witness, his own sister, by luring her husband into a videotaped tryst with a prostitute.

Calling the crimes "horrific and reprehensible," U.S. District Judge Jose Linares announced his ruling in a packed Newark courtroom. It was final stroke in a spectacular downfall for one of the region's wealthiest and most influential businessmen and philanthropists.

The sentence followed a contentious hearing in which the judge was asked to weigh different portraits of the man: Prosecutors said Kushner was a vengeful schemer who considered himself above the law even after his arrest, while his defense attorney described the Livingston developer as a kind and generous man who became a victim after being pushed too far by rivals in a family feud.

Speaking publicly for the first time since his arrest last summer, Kushner told the judge that neither description was really accurate.

"My poor judgment was really rooted in very sad, very tragic family dispute that just got out of control," he told the judge. "I lay awake at night, and I think about the guilt, the pain and the suffering that I've caused to my family. I've caused a lot of pain."

His two-year term was the maximum under the plea agreement negotiated by the two sides last summer.

Prosecutors had sought an even stiffer penalty in recent days, contending that Kushner had not fulfilled the terms of his plea deal and was obstructing their continuing probe into the Kushner Cos., the partnerships that own or manage $3 billion in assets. The judge cast aside that argument, but also wasn't swayed that Kushner's charity should get him a lighter term.

Linares also ordered Kushner to undergo a mental health evaluation and pay a $40,000 fine, the maximum allowed. At Kushner's request, the judge recommended he serve his term in Montgomery, Ala., at a prison camp with a program for Orthodox Jews. The judge ordered him to surrender to prison by May 9.

U.S. Attorney Christopher Christie said he was pleased by the sentence and hailed the work of the FBI, IRS and prosecutors. But he continued the war of words with defense attorneys that had threatened three times before to derail the plea deal, saying he believed Kushner still considered himself above the law.

"I was personally sickened today by the arguments made in the court about the victims in this case, that somehow tried to equate the conduct of the victims to Mr. Kushner's conduct," Christie said.

In turn, defense attorney Benjamin Brafman bristled over the sentence and the way prosecutors vilified his client.

"Sentencing Mr. Kushner to jail in my judgment is not a good thing for this country," Brafman told reporters, "because he is quite an extraordinary man who, in my judgment, earned over a lifetime of extraordinary work some consideration by the sentencing judge."

Kushner, the son of Holocaust survivors, rose steadily in political and philanthropic prominence through the 1990s as his business swelled. Schools and charities across the region benefited from his largesse, and he donated millions of dollars to the Democratic Party and its candidates, particularly Gov. James E. McGreevey.

Then his older brother, Murray, accused him in lawsuits of secretly siphoning millions from the family business for a lavish lifestyle, political contributions and charities. The two brothers privately settled their lawsuits, but the allegations sparked the interest of federal agents.

Last July, prosecutors charged Kushner with retaliating against his sister, Esther, who had been a grand jury witness. They said Kushner paid $25,000 to an East Orange police officer and a private investigator to hire a prostitute and lure Esther Schulder's husband into an extramarital affair.

The trap worked. The men secretly videotaped William Schulder during a December 2003 encounter at a Bridgewater motel and later mailed a copy to the Schulders.

Four weeks after his arrest, Kushner pleaded guilty to witness retaliation and also admitted writing off some charitable donations as business expenses and illegally making political contributions.

In arguing for the maximum sentence, Assistant U.S. Attorney Scott Resnik told the judge that Kushner's crimes amounted to a "systemic assault" on the people and institutions that stood in the way of his success.

"These were crimes of greed, power and arrogance," Resnik said. "The crimes of a man who truly believed that he was so powerful, so wealthy, that he did not have to abide by the rules of society."

Kushner's attorneys -- Brafman, Alfred DeCotiis and Jeffrey Smith -- fought to portray Kushner as a philanthropist of historic proportions. They submitted more than 700 letters to the judge from his supporters.

"I have never met anybody who I am more proud to call a friend today than Charlie Kushner," Brafman told Linares, "because I have never met anybody who has done more for humanity."

The judge also received a brief letter from Esther Schulder. "Despite all that has happened, Charles is still the son of my parents," she wrote in the four-paragraph note. "Thus, I would understand any consideration that you find appropriate."

Kushner sat slightly slumped in his chair at the defense table while the attorneys argued, his eyes downward, looking up only occasionally. His wife, Seryl, sat in the first row with their children and occasionally dabbed her eyes with a tissue. The rows behind them were filled with friends, business partners and supporters.

Addressing the judge, Kushner said he often visits his parents' graveside and was, in some ways, grateful they did not live to see him standing there. He said that as he and his wife drove to the courthouse, he told her it would be a bad day, but would not define him.

"I'm still proud of my life," Kushner said. "This experience has strengthened my resolve to be a better person. It's not going to destroy me."

John P. Martin covers federal courts and law enforcement. He can be reached at (973) 622-3405 or at
TAXING TIMES FOR CHUCK: Charles Kushner arrives for sentencing yesterday, flanked by wife Sheryl Beth and lawyer Alfred DeCotiis. He was sentenced for two years for violations of tax and campaign-finance laws.
Photo: AP

March 5, 2005 -- New Jersey real-estate magnate Charles Kushner, a major donor to Democratic politicians, was sentenced yesterday to two years in federal prison for campaign- finance and tax violations, as well as for retaliating against a witness — his sister — by having her husband seduced by a prostitute.
Kushner was also fined $40,000 by U.S. District Judge José Linares in Newark.

Two years was the maximum suggested by sentencing guidelines after Linares rejected a government effort for a 33-month ceiling.

Prosecutors claimed Kushner had impeded subpoenas of his business and may not have surrendered all copies of the videotape.

Linares said Kushner's generosity in giving money to charity and individuals, attested to in some 700 letters to the judge, was difficult to reconcile with his "vengeful and hateful" acts.

"I do believe that there is a side of you that has done tremendous good," Linares said.

He noted that one of the letters was from Kushner's sister, Esther Schulder, who received the tape.

She wrote: "I do want to express to you my feeling that despite all that has happened Charles is still the son of my parents. Thus, I would understand any consideration that you find appropriate."

Kushner addressed the judge for eight minutes, calling his own behavior "disgraceful and reprehensible."

"My poor judgment was rooted in a very sad, very tragic family dispute that just got out of control," Kushner said.

Assistant U.S. Attorney Scott Resnik argued that Kushner should get the maximum. "These were crimes of greed, power and arrogance," he said.

Defense attorney Benjamin Brafman countered that Kushner's "extraordinary" philanthropy merited the lowest possible sentence of 18 months.

Brafman insisted that Kushner suffered "terrible abuse" from his older brother, saying Murray Kushner — jealous of his sibling's success — corrupted the relationship between Charles and Esther.

Brafman claimed Charles Kushner was also a victim, and now has endured humiliation. "In this case, there are only victims," the lawyer said.

Kushner, 50, of Livingston, remains free on $5 million bail. He must report to prison by May 9.

Kushner pleaded guilty Aug. 18, admitting that he sent a videotape of the sexual encounter to his sister in retaliation because she was cooperating in a federal investigation of his business activities.

Kushner also pleaded guilty to 16 counts of filing false tax returns for various partnerships affiliated with his company, avoiding up to $325,000 in taxes.

The partnerships falsely claimed more than $1 million in charitable contributions as office expenses for tax years 1998 to 2000.

Partnerships can deduct office expenses from profits, but not charity.

He also pleaded guilty to making false statements to the Federal Election Commission.

Kushner gets 2-year sentence, $40,000 fine

Saturday, March 5, 2005


Charles Kushner, a multimillionaire business tycoon who bankrolled political campaigns across New Jersey and once conferred with heads of state, was sentenced Friday to two years in prison.

U.S. District Judge Jose L. Linares said Kushner's standing as an influential businessman and generous philanthropist didn't excuse "the evil nature" of his conduct, which included tax fraud, violating election law and hiring a prostitute to seduce witnesses cooperating with a federal probe into his finances.

"These were indeed crimes driven by greed and power and revenge" by a man "who put himself above the law," Linares said in Newark.

Under a plea agreement with the government, the judge sentenced Kushner to the maximum term possible under federal guidelines. He also fined him $40,000 and ordered that Kushner participate in a mental health program while in federal prison.

Linares said he ordered counseling largely because he couldn't "reconcile" the two portraits of Kushner - a good family man and community benefactor, as painted by his supporters, and the "revengeful, hateful" schemer who admitted recruiting a prostitute so he could film her having sex with his own brother-in-law.

"These actions are incomprehensible to the court," Linares said.

By his own admission, Kushner's fall from grace grew from a family feud that pitted him against his siblings. Coiffed and clad in a navy suit, he told the judge Friday that the internecine fight had eventually consumed him and propelled him to do things he now believes were "reprehensible."

"My poor judgment was rooted in a very sad, very tragic family dispute that just got out of control," Kushner said. "I retaliated against my brother and sister, my own flesh and blood. What I did was wrong, and I say that in front of my own children."

As he spoke, Kushner's wife, Seryl, who was seated next to the couple's four grown children, wiped away tears.

Kushner, the son of Holocaust survivors and onetime chairman of the $1 billion-strong Kushner Companies in Florham Park, must report to a federal prison in Montgomery, Ala., by May 9.

The 50-year-old real estate magnate from Livingston told Linares on Friday that his legal ordeal will make him "a better man."

"I hope to resume a positive and productive role in society when this chapter is over," Kushner said.

Federal prosecutors argued that Kushner's actions went far beyond a quest for revenge.

Assistant U.S. Attorney Scott Resnik said Kushner, then a prominent Democratic fund-raiser and the top donor to former Gov. James E. McGreevey's campaign in 2001, viewed laws as surmountable hurdles to his personal aims. When they blocked his path, Resnik said, Kushner launched "a systematic assault" on those people or institutions that blocked "his ability to amass wealth" and "influence political action."

For instance, he said, Kushner knowingly committed tax fraud by falsely writing charitable donations off as business expenses. Then he made illegal campaign donations that exceeded federal limits, disguising their true origin by putting them in his employees' names, the prosecutor said.

"Here the defendant sought to subvert the democratic process," Resnik told the judge.

When he learned that his brother and sister were helping federal prosecutors probing his business dealings, Kushner attempted to blackmail the siblings to prevent their further cooperation.

"It is a threat to the entire judicial system," Resnik said.

Linares ordered Kushner to pay back taxes and penalties to the Internal Revenue Service and said he must serve two years' probation after his release from custody. Meanwhile, the probe related to Kushner and his associates continues, U.S. Attorney Christopher J. Christie said Friday.

Kushner pleaded guilty in August to 16 counts of filing false tax returns, one count of retaliating against a federal witness and one count of making false statements to the Federal Election Commission.

He said he paid $25,000 to a New York City call girl, with the help of a corrupt police officer and a private investigator, officials said. Intermediaries videotaped his brother-in-law, William Schulder, having sex with the prostitute in a Bridgewater motel room in December 2003.

Kushner said that in May 2004, shortly after his business associates learned they were targets of a federal grand jury investigation, he ordered that a copy of the tape and still photographs of the encounter be mailed to Schulder and his wife, Kushner's sister, Esther.

The judge on Friday read portions of a letter written to him by Esther Schulder, asking for "appropriate" leniency.

"Despite all that has happened, Charles is still the son of my parents," she wrote. "Hopefully, this will enable future generations within the family to find some peace."

Kushner sentenced to two years
Staff & Wire Report
NEWARK -- Charles Kushner, a powerful real estate developer and one-time Jim McGreevey and Democratic party supporter, was sentenced yesterday to two years in federal prison for campaign finance violations and retaliating against a witness -- his sister’s husband -- by having him seduced by a prostitute.

Kushner reportedly employed Golan Cipel, a former aide to McGreevey who allegedly was the individual with whom the governor carried on an extra-marital affair. A one-time poet who served in the Israeli Navy briefly -- Cipel was McGreevey’s choice to be his top homeland security adviser earning more than $100,000.

McGreevey shocked New Jersey and the entire nation last August when he announced that he was a "gay American" who had carried on a homosexual relationship and that he would resign on Nov. 15.

"My truth is that I am a gay American," the then-governor said publicly on Aug. 11 as his wife, Dina, and his parents stood nearby.

"Shamefully, I engaged in an adult consensual affair with another manIt was wrong. It was foolish. It was inexcusable," McGreevey said.

McGreevey did not reveal the name of the man with whom he had the extra-marital affair, but administration sources acknowledged it was with the governor’s former anti-terrorism czar, Golan Cipel.

Cipel had little experience and law enforcement officials decried his posting. Federal authorities refused to grant Cipel proper security clearances.

McGreevey adamantly stood by Cipel for months, grudgingly accepting his resignation in March 2002. Cipel, who has returned to Israel, has repeatedly denied having any sexual involvement with the former governor.

Kushner’s influence ties Cipel to one of McGreevey’s earliest scandals. He signed the papers Israeli citizen Golan Cipel needed to work in the United States, and gave him a $30,000-a-year marketing job.

Kushner, who yesterday received the maximum term, was also fined $40,000 by U.S. District Judge Jose L. Linares.

Linares said Kushner’s generosity in giving money to charity and individuals was difficult to reconcile with his "vengeful and hateful’’ acts.