Former Newark mayor indicted on federal charges

By Edith Honan

NEWARK, New Jersey (Reuters) - The longtime former mayor of New Jersey's largest city was indicted on Thursday on an array of charges, from selling city land below cost to using city credit cards for lavish vacations with female companions.

The 33-count indictment was announced in Newark, where Sharpe James was a colorful and controversial mayor from 1986 until he retired last year.

Just eight miles from New York, Newark is one of the nation's poorest cities, with high rates of unemployment and crime. More than a third of residents live in poverty, and the city faces a projected $180 million budget gap next year.

James, 71, is accused of using city-issued credit cards to spend on himself, eight female companions and others during personal trips to destinations including Rio de Janeiro, the Dominican Republic and Puerto Rico.

The $58,000 in credit card charges covered luxury hotels, meals, air fare, sporting events and a $9,000 penthouse suite on a cruise scheduled to sail six weeks after he left office, prosecutors said.

"When Sharpe James had a choice between enriching himself or helping the people of Newark, he chose self-enrichment," said U.S. Attorney Christopher Christie in announcing the indictment. "He chose to cheat the people of Newark and the citizens of New Jersey."

Outside U.S. District Court, where James was arraigned and freed on bail, the prosecutor added: "Every one of those dollars are dollars that could be better used to improve the city of Newark."

James also is accused of allegedly facilitating the cut-rate sale of city land to a companion, Tamika Riley, who was charged with fraud along with James.

The former mayor steered property to Riley under a program designed for developers to buy and rehabilitate blighted city land, but Riley bought property and resold it at a profit of some $500,000 without rehabilitating it, prosecutors said.

The federal indictment lists charges of mail fraud, wire fraud and conspiracy, some of which carry maximum prison sentences of 20 years.

A Democrat who served five terms as mayor, James has repeatedly denied wrongdoing. Newark's Star-Ledger newspaper has reported that James says he traveled on official business and the investigation was politically motivated.

The indictment comes as the city marks the 40th anniversary of race riots that left deep scars on its community, landscape and economy.