02-9-04 -- Conway, Charles D. -- Indictment, Arrest -- News Release

Disbarred Ocean County Attorney Indicted, Arrested for Fleecing Charitable Foundation

TRENTON - A disbarred Beach Haven lawyer was arrested today, charged in an Indictment with wire and mail fraud, money laundering, obstruction of justice, witness tampering, perjury and tax evasion in connection with his scheme to steal more than $1.3 million from a charitable foundation that he created when he represented the estate of a woman who willed all of her assets to charity, U.S. Attorney Christopher J. Christie announced.

The 33-count Indictment describes an array of fraud and misconduct by Charles D. Conway, primarily in connection with the abuse of his position as one of three trustees of the Rita & Harry Greenberger Foundation. The Indictment also describes Conway's efforts to conceal his embezzlement from the foundation's two other trustees and deceive an attorney they hired to recoup some of their losses.

"There was nothing charitable about Mr. Conway's stewardship of this foundation," Christie said. "His actions as alleged demonstrate a stunning depth of abuse of trust, greed and cunning."

The abuses included an embezzlement scheme to transfer foundation funds to his own use through the establishment of bank and investment accounts, including offshore accounts, the formation of a Bahamian Corporation, and the purchase of residential and commercial properties, according to the Indictment.

The Rita and Harry Greenberger Foundation, Inc. was a not-for-profit charitable organization created in the last will and testament of Elaine G. Kislak, solely for scientific, educational and charitable purposes. Ms. Kislak, a former resident of Ocean Township, died in February 1989. The by-laws of the Greenberger Foundation required the consent of at least two trustees before any funds could be disbursed.

Conway, 56, who formerly practiced in Toms River, was arrested early this morning at his home in Beach Haven by Special Agents of the FBI and IRS and Inspectors with the U.S. Postal Inspection Service. Conway will make an initial appearance before U.S. Magistrate Judge John J. Hughes in Trenton later today when bail conditions will be determined.

The Indictment includes forfeiture allegations that give notice of the government's intention, upon a conviction, to seize any property derived through proceeds of the scheme, including Conway's Beach Haven residence, and several bank and investment accounts.

The Indictment was returned Thursday and unsealed with the arrest. The 11 mail and wire fraud counts, the 13 money laundering counts and the witness tampering count each carry 20-year maximum prison terms. The obstruction of justice carries a maximum penalty of 10 years and tax evasion five years.

The Indictment charges multiple instances and methods in which Conway unlawfully used his trustee position and authority to transfer foundation funds. Among other things, Conway allegedly formed the Rita and Harry Greenberger Foundation Inc., a Bahamian Corporation, and attempted to merge the Greenberger Foundation with the Bahamian Corporation in order to place the foundation funds beyond control of its two other trustees.

The Indictment also accuses Conway of embezzling foundation funds to purchase residential and commercial properties, to capitalize businesses in which he was involved, and to trade in foreign currencies.

The Indictment further charges that Conway attempted to conceal his scheme by misrepresenting the amount of funds remaining in the Greenberger Foundation accounts to persuade the other two trustees to dismiss a lawsuit where Conway was about to be joined and named as a defendant.

In May 1996, Conway embezzled $194,500 of foundation funds for the purchase of a commercial office building located on Route 37 West in Toms River, according to the Indictment.

According to the Indictment, in October 2000, Conway used $151,375 in foundation funds toward the purchase of his current residence, at 813 South Bay Avenue in Beach Haven, which he purchased for $547,550.

In May 2001, Conway sold the office building on Route 37 for $500,000, according to the Indictment. Furthermore, the Indictment states that 21 days later, Conway used $402,297 of the sale proceeds to pay off the mortgage on his Beach Haven house.

Counts One through Eleven charge a scheme to defraud the Rita & Harry Greenberger Foundation through the use of the mails and wires. Counts 12 through 25 charge money laundering. Count 26 charges obstruction of justice. Count 27 charges witness tampering in relation to a witness who was called to testify before the grand jury investigating this matter. Count 28 charges Conway, who appeared and testified before that grand jury, with perjury. Counts 29 through 33 charge tax evasion for the years 1997 through 2001.

The Indictment and news release is available at the Public Affairs Office website, www.njusao.org or by contacting Public Affairs Office at either 856-757-5233 or 973-645-2888.

An Indictment is a formal charge made by a grand jury, a body of 16 to 23 citizens. Grand jury proceedings are secret, and neither persons under investigation nor their attorneys have the right to be present. A grand jury may vote an Indictment if 12 or more jurors find probable cause to believe that the defendant has committed the crime or crimes charged.

Despite Indictment, every defendant is presumed innocent, unless and until found guilty beyond a reasonable doubt, following a trial at which the defendant has all of the trial rights guaranteed by the U.S. Constitution and federal law.

Christie credited Special Agents of the FBI, under the direction of Special Agent in Charge Louie F. Allen, in Newark; the U.S. Postal Inspection Service, under the direction of Martin D. Phanco, Postal Inspector in Charge, N.J./Caribbean Division, and Patricia J. Haynes, Special Agent in Charge of the IRS Criminal Investigation section, in Newark, with developing the case against Conway. Christie also thanked the Office of Attorney Ethics of the Supreme Court of New Jersey, under the direction of David E. Johnson, Jr., who initially discovered Conway's fraud and referred the matter to the United States Attorney's Office.

The Government is represented by Assistant U.S. Attorney Michael A. Guadagno, of the U.S. Attorney's Criminal Division in Trenton.

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Defense counsel: Michael Wilbert, Esq. Toms River