Former Newark mayor convicted of fraud

NEW YORK (Reuters) - A federal jury convicted the longtime former mayor of New Jersey's largest city on fraud and conspiracy charges on Wednesday for selling undervalued city properties to his mistress who resold them for windfall profits.

Sharpe James, 72, was a colorful and controversial mayor of Newark from 1986 until he retired in 2006 and now faces five to 12 years in prison when he is sentenced on July 29 at U.S. District Court in Newark, 8 miles from New York City.

James was convicted on five counts in a scheme in which city-owned properties were steered to Tamika Riley, his mistress, who paid $46,000 for nine properties that were quickly resold for more than $600,000. Riley was convicted of 12 counts.

The deals were part of a city program designed to help blighted areas by providing land to developers at a discount on the promise they would improve the properties before resale.

James is also accused in a separate case yet to come to trial of using city-issued credit cards to spend $58,000 on himself, eight female companions and others during personal trips to destinations including Rio de Janeiro, the Dominican Republic and Puerto Rico.

More than a third of Newark's residents live in poverty and the city has been a symbol of urban decay. In 1967, race riots left deep scars on the Newark landscape and economy.

A Democrat who served five terms as mayor, James has repeatedly denied wrongdoing and called the investigation politically motivated.

His defense lawyers did not immediately return phone calls seeking comment.

(Reporting by Daniel Trotta; Editing by Cynthia Osterman)