Developer convicted alongside former Sen. Bob Menendez pleads guilty in related bank fraud case

Fred Daibes arrives for trial in Manhattan federal court on June 11, 2024. He was convicted in July of bribing former Sen. Bob Menendez with cash and gold bullion to help him evade criminal prosecution. (Michael M. Santiago | Getty Images)

Edgewater developer Fred Daibes pleaded guilty Thursday in a bank fraud case he bribed former Sen. Bob Menendez to fix.

Daibes, 67, faces up to 30 months in prison and $1 million in fines for fraudulently obtaining a $1.8 million loan in 2008 from Mariner’s Bank in Edgewater, where he was CEO and chairman of the board, according to the New Jersey U.S. Attorney’s Office.

Daibes pleaded guilty in federal court in Newark to making false entries to deceive the bank. U.S. District Judge Susan D. Wigenton set sentencing for Jan. 23.

He was indicted in 2018 and later accepted a plea deal that would have granted him probation, rather than prison. But Wigenton rejected the deal last October, after federal prosecutors in New York City charged Menendez, Daibes and three others in the bribery scheme.

According to prosecutors, under that scheme, Daibes paid Menendez tens of thousands of dollars in cash and gold bullion and in exchange, the former senator intervened in an attempt to derail Daibes’ bank fraud case. Testimony about the scheme dominated several days of the 10-week bribery trial in Manhattan, where Menendez, Daibes and a third co-defendant, Wael Hana, were convicted in July.

Philip Sellinger, the U.S. attorney for New Jersey, testified that Menendez, his longtime friend, called him in late 2020 to complain about Daibes’ prosecution. Sellinger was being considered for the job at the time; Menendez, a Democrat and New Jersey’s ranking senator, recommended candidates for federal jobs to the White House. Sellinger testified that Menendez said Daibes was being treated unfairly and urged him to “look at it carefully,” should he get the job.

However, Sellinger told Menendez that he would likely be recused from the case due to a conflict of interest, prompting Menendez to recommend another candidate for the position.

Sellinger later got the job, however, after the White House ruled out the other candidate and his new bosses ordered him to recuse himself from Daibes’ bank fraud case.

Vikas Khanna, Sellinger’s first assistant, took over the case, but also received a call from Menendez. Khanna testified that Menendez did not make any direct demands about Daibes’ case in that 2022 call, but instead praised Daibes’ defense attorney.

Menendez, Daibes and Hana are scheduled to be sentenced Oct. 29 in Manhattan for their bribery convictions. Any sentence Wigenton hands down in Daibes’ bank fraud case could run concurrently with any sentence U.S. District Judge Sidney H. Stein orders in the bribery case.

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