Will the mayor of Atlantic City—make that the former mayor—soon trade his designer suits for prison stripes?
Last Thursday, Frank Gilliam pleaded guilty in a Camden, New Jersey federal court to committing wire fraud after stealing some $87,000 from a youth basketball team he co-founded in 2011. In addition to paying back the money, Gilliam faces up to 20 years in prison and a fine of “$250,000 or twice the gross gain or loss from the offense.”
The day he made his plea, New Jersey Governor Phil Murphy called on Gilliam to resign, calling his actions “despicable.” Before the day ended, Gilliam complied, saying he left office with “a heavy heart.” Atlantic City Council President Marty Small was sworn in as mayor the next day.
Gilliam stole the money from the AC Starz Basketball Club, a youth athletic program for boys. According to the FBI, he undertook major fundraising for the feel-good cause under “the false pretense that the contributions were for a youth basketball team and/or school supplies for underprivileged children.” He stole a total of $87,215 from the program and spent it “on luxury designer clothing, expensive meals, and personal trips to various locations.”
Gilliam posted a $100,000 bond and surrendered his passport before walking out of the courtroom into a swarm of news reporters and photographers. He was closemouthed as he left, but his mouthpiece, attorney Harry Rimm, issued a statement pointing out that his client did not steal from taxpayers, just disadvantaged schoolchildren.
“Mr. Gilliam, who is a lifelong resident of Atlantic City, has admitted his wrongful conduct, is accepting responsibility for his actions and is genuinely remorseful,” Rimm said. “Moreover, Mr. Gilliam has started paying restitution, making a voluntary payment today in connection with his plea. To date, and in advance of sentencing, Mr. Gilliam has paid back almost half of the restitution amount that the parties have agreed is owed.”
FBI Special Agent in Charge Gregory W. Ehrie fired back, saying, “When a scheme depletes charity for children, it’s unconscionable, but when the fraud is perpetrated by someone the public trusts, it damages the community’s confidence in their public servants. This defendant betrayed the trust of his community and of people who wanted to improve the lives of children.”
Murphy said Gilliam “squandered the trust and confidence of his community and of this administration to lead that community.”
U.S. Attorney Craig Carpenito said Gilliam “took advantage of his victims’ desire to assist underprivileged children by falsely representing that the money contributed to the AC Starz Basketball Club would go to pay for school supplies or to support youth basketball. Instead, he spent the money on himself.
“When a public official like Gilliam abuses either a public or a private trust to commit a fraud, this office and our agency partners will investigate and prosecute that official. The people of New Jersey are entitled to better.”
Gilliam made plenty of headlines last year. In November, he was involved in a brawl at the Golden Nugget Casino in Atlantic City but was not charged in that incident, which was captured on surveillance tape. In December, FBI and IRS agents raided his home, seizing computers and files; according to the Philadelphia Inquirer, the raid was presumably related to a dispute over a $10,000 campaign-finance check that came from the Atlantic County Democratic Committee, which Gilliam had deposited in his personal account.
The former mayor is the latest in a string of Atlantic City mayors found to have been involved in criminal activities. The Inquirer listed four out of the last eight office-holders:
- Michael J. Matthews, arrested by the FBI in 1983 for accepting a $10,000 bribe from an undercover federal agent and for accepting money from Philadelphia mob boss Nicodemo “Little Nicky” Scarfo.
- James L. Usry, arrested in 1989 for taking a $6,500 bribe from a state police informant as part of an alleged influence-selling conspiracy.
- Bob Levy, a former lifeguard and Vietnam veteran, who embellished his military service to collect more benefits.
- Two former Atlantic City mayors, Lorenzo Langford and William “Speedy” Marsh were required to repay the city for an $850,000 overturned settlement that they were fired due to political retribution. The funds were disbursed before an ethical review and when it was overturned, the two were forced to repay the money.
Now a member of that hall of shame, Gilliam will be sentenced on January 7.
