DECEMBER 2, 2010, 5:42 P.M. ET

http://online.wsj.com/article/APb073c258e25b4c30804aec8fd3792714.html

Associated Press

NEWARK, N.J. — The two tracks of New Jersey's largest federal corruption investigation briefly intersected Thursday when a real estate developer pleaded guilty to money laundering and conspiracy charges during a break in the corruption trial of a former New Jersey assemblyman caught up in the same sting.

Moshe "Michael" Altman of Monsey, N.Y., whose business was based in Union City, N.J., entered his plea in Newark federal court during a break in the corruption trial of former assemblyman L. Harvey Smith. Smith has pleaded not guilty to several extortion, bribery and money laundering counts.

Both Altman and Smith were among 44 people arrested in July 2009 in the two-track investigation into political corruption and money laundering.

The two seemingly disparate threads of the case — money laundering networks allegedly run by members of an insular Orthodox Jewish religious community, and officials from several New Jersey towns arrested on corruption charges — were tied together by one man: Solomon Dwek, the government's key cooperating witness.

Dwek, the son of a prominent rabbi from Deal, N.J., agreed to wear a wire for federal authorities after pleading guilty to a $50 million bank fraud. Alternately posing as a businessman and a corrupt real estate developer, Dwek ensnared several members of his Orthodox Jewish community on money laundering charges before branching out to New Jersey officials in what prosecutors say was a cash-for-development assistance scheme.

Prosecutors allege Altman, a 40-year-old real estate developer who is Orthodox Jewish, was approached by Dwek who asked him for help in concealing money from bankruptcy proceedings, fraudulent bank deals and a counterfeit handbag business.

Altman admitted Thursday that between May 2007 and July 2009, he engaged in 15 transactions in which he helped Dwek convert checks into cash by laundering them through a religious charity.

Prosecutors say Altman and his alleged co-conspirators laundered nearly $670,000 through purported charitable, nonprofit entities, returning nearly $550,000 to Dwek in cash, and retaining a cut of more than $100,000.

Altman could get more than four years in prison when he's sentenced in March.

Jacob Laufer, Altman's lawyer, said Thursday following his client's guilty plea that "Mr. Altman has accepted responsibility for what happened and is looking forward to the next stage of his life."

Altman also played a role in the investigation veering into the public sector in the summer of 2007, when he introduced Dwek to Jersey City building inspector John Guarini, according to federal charging documents.

Guarini faces bribery, extortion and tax fraud charges in the case.

Altman admitted Thursday he had arranged for Dwek to meet with Guarini in the boiler room of a Jersey City apartment building, where Guarini allegedly accepted $20,000 from Dwek in exchange for promises to help him get zoning approvals. Dwek was then posing as a developer.

From there, Dwek gained introductions to more than two dozen other public officials including Smith, prosecutors said.

The second day of Smith's trial Thursday centered on continuing testimony by Edward Cheatam, a longtime Jersey City public official who arranged meetings for Dwek with other officials and allegedly introduced him to Smith. Cheatam, also arrested in the probe, faces between seven and 12 years in prison after pleading guilty to extortion conspiracy.

Jurors watched more videotapes of meetings secretly recorded by Dwek, who isn't scheduled to testify, as he has done in three previous trials.

Smith is the fifth defendant to go on trial. Altman is the 24th defendant to plead guilty in the sting.