7-14-2004
N.J. GOV PAL IN HOOKER 'SETUP'
By RICH CALDER and GERSH KUNTZMAN

July 14, 2004 -- The top fund-raiser for New Jersey Gov. Jim McGreevey hired a New York City prostitute to seduce a key witness in a federal fraud case — and then sent a steamy videotape of the encounter to the witness' wife, prosecutors said yesterday.
In a scenario right out of a pulp crime novel, real-estate developer Charles Kushner — who was aware he was being pursued by the feds for tax fraud and illegal campaign contributions — personally offered the hooker up to $10,000 to do the dirty deed on tape with the witness, U.S. Attorney Christopher Christie said.

The witness is a former Kushner employee and the husband of one of Kushner's close relatives, Christie said. The wife is also a cooperating witness in the federal case against Kushner.

Kushner, 50, turned himself in yesterday and pleaded not guilty to witness tampering, obstruction of justice and promoting interstate prostitution. If convicted on all counts, Kushner could be sent to prison for a maximum of 25 years and pay fines of up to $750,000.

The charges also include Kushner's alleged attempt to similarly sway a second witness in the case, another former Kushner employee. In that instance, however, the witness turned down another prostitute's erotic overture, Christie said.

"It's the lowest form of blackmail," said Joseph Billy Jr., an FBI special agent involved in the investigation.

Kushner, one of the state's richest developers, made the $5 million bail by offering homes in Livingston and Oakhurst as collateral.

He was ordered not to leave the state, to surrender his passport and to wear an electronic monitoring device on his ankle so authorities can track his movements.

The criminal complaint, released yesterday, reads like a steamy potboiler.

According to authorities, Kushner "initiated a scheme to orchestrate the covert videotaped seduction" in August 2003 after becoming aware of the federal grand-jury probe into his taxes and campaign contributions.

To set the salacious scenario into motion, he hired two co-conspirators and paid them $25,000 to find the appropriate prostitute. But the plot stalled for several months due to the co-conspirators' "inability to recruit a woman who was willing to be paid to seduce and have sex with" the witness.

So in November, "Kushner personally recruited a woman — known by [him] to be a call girl — to seduce and have sex with [the witness] on videotape," the indictment stated. He promised her up to $10,000.

On Dec. 4, 2003, the woman tailed the witness to a diner near Bridgewater, N.J., and then — in what the witness thought was simply a chance meeting — played the damsel in distress by asking him for a ride to her motel because her car had broken down.

Once there, she invited him up to her room for a drink. He declined — but the pair exchanged phone numbers. She called him the next day, and the pair had sex in the motel room — the X-rated action caught on a hidden camera installed earlier by one of the unnamed co-conspirators.

Later that day, the co-conspirators delivered the tape to Kushner in his offices. "Kushner viewed the videotape and expressed satisfaction with it," the indictment stated.

The plot stayed dormant until May 7, when two of Kushner's employees were notified by federal authorities that they were targets of a federal probe.

Two days later, Kushner — feeling the feds' noose tightening and the need to act — allegedly instructed the co-conspirators to drive to Canada and send the videotape to the witness' wife and children.

The tape arrived at the home, but the co-conspirator had convinced Kushner to keep the kids out of it, the indictment said.

The wife turned the tape over to federal authorities.

Authorities said Kushner wanted to use the tape to "gain leverage" over the witness.

"Obstruction of a federal grand-jury investigation will not be tolerated," said Christie. "The alleged conduct is repugnant to all those who respect the rule of law."

The tapes could be made public at trial, Christie said.

Kushner's lawyer, Benjamin Brafman, lawyer denied the charges.

"Charles Kushner is one of the most respected businessmen in the country and a great philanthropist," said Brafman. "The charges filed today are entirely baseless. Once the facts are fully disclosed in a courtroom, he will be completely exonerated."

Christie, who has been cited as a possible Republican candidate for governor, refused to link the criminal probe against Kushner to McGreevey, whose other top fund-raiser, David D'Amiano, was indicted last week for extortion.

"There is nothing in this document that has anything to do with Jim McGreevey," Christie said. He refused to answer whether his office was investigating the governor.

Since his first gubernatorial campaign in 1997, McGreevey has received at least $369,050 from Kushner, Kushner's family members and employees of Kushner's Florham Park-based firm, which is valued at $1 billion. He has also bundled more than $1 million in contributions to McGreevey over the years.

               Email: moun@moun.com