02-03-04 -- Saunders, Kenneth, Sr. -- Guilty Plea -- News Release

Former Asbury Park Mayor Admits Tax Charges; Plea Follows December Corruption Conviction

NEWARK - The former mayor of Asbury Park, Kenneth E. Saunders, Sr., pleaded guilty today to submitting false and fraudulent tax returns for 1997, 1999 and 2000, U.S. Attorney Christopher J. Christie announced

The tax plea follows Saunders' conviction by a jury in December on corruption charges in connection with the city's early redevelopment plans. Saunders' confidant and political consultant, Rayfield James, Jr., was also convicted by the same jury.

Sentencing for Saunders on both the corruption and tax charges is scheduled for May 11 at 11 a.m. before U.S. District Judge John C. Lifland. Sentencing for Rayfield James, Jr. is scheduled for March 22.

Saunders and James were indicted in April 2003 for their participation in the conspiracy to offer bribe payments to Asbury Park Councilwoman Sheila Solomon in 2000 in connection with the redevelopment of the Asbury Park oceanfront. The remaining five counts of the Indictment charged Saunders with aiding in the preparation and submission of false federal income tax returns for the years 1997 through 2001.

Prior to trial, Judge Lifland severed the corruption count from the tax counts and ordered a separate trial for Saunders' tax counts. The trial began on Dec. 2, with guilty verdicts returned on Dec. 15.

Saunders admitted today that for each of the calendar years in question, he improperly claimed head of household filing status and that he falsely claimed deductions for the care of dependents. Specifically, he claimed to have two dependent grandchildren for 1997 and one dependent grandchild for 1999 and 2000. Saunders admitted to Judge Lifland that he has no grandchildren, that he was not entitled to list the children set forth on his tax returns as dependents, and that he did not incur child care expenses as claimed on his tax returns.

Saunders also admitted to claiming fraudulent unreimbursed job expenses that he had purportedly incurred as a councilman and mayor of Asbury Park. Specifically, Saunders admitted that he falsely claimed that, in his capacity as mayor, he had put more than 18,000 miles on his personal vehicle during for 1997, more than 17,000 miles for 1999 and approximately 12,000 miles for 2000. Saunders admitted that these figures were "grossly inflated."

Saunders, 59, served as the mayor from July 1, 1997 through June 30, 2001. He was originally elected in late 1996 as an Asbury Park councilman to fill out the unexpired term of another councilman. Saunders was then reelected to the Asbury Park City Council in May of 1997 and was chosen to serve as mayor by the other members of the Council, which included Councilman James Condos. Condos was indicted along with developer Philip Konvitz in October of 2002 on corruption charges and awaits sentencing.

Saunders and James each face a maximum sentence of five years in prison on the corruption charge, a fine of up to $250,000 or twice the loss caused by their offense. On the tax charges, Saunders faces a maximum sentence of three years per count, as well as a fine of $100,000 per count plus the costs of prosecution.

Under U.S. Sentencing Guidelines, Judge Lifland will determine the actual sentences based on a formula that takes into account the severity and characteristics of the offenses and the defendants' criminal histories, if any.

Parole has been abolished in the federal system. Under Sentencing Guidelines, defendants who are given custodial terms must serve nearly all that time.

Christie credited Special Agents of the FBI, under the direction of Special Agent in Charge Louie F. Allen, and the IRS Criminal Investigation section, under the direction of Special Agent in Charge Patricia J. Haynes, for their work in developing the case.

The Government is represented by Assistant U.S. Attorney Mark J. McCarren, Chief of the Office's Public Protection Unit, and Assistant U.S. Attorney Nelson S.T. Thayer, Jr. of the Office's Special Prosecutions Division.

-end-

Defense Counsel: Anthony Iacullo, Esq., Montclair