Developer Daibes to keep lawyer despite conflict

Faces charges in bank fraud, bribery cases

By: Kristie Cattafi
NorthJersey.com
USA Today Network - New Jersey

..... Fred Daibes, the North Jersey developer charged alongside U.S. Senator Bob Menendez in an alleged bribery scheme, will keep his attorney in a separate bank fraud case, despite federal prosecutors warning of a legal conflict of interest.
..... Daibes is one of five people indicted in the alleged corruption scheme involving New Jersey's senior senator and his wife, Nadine Arslania Menendez. Daibes pleaded not guilty last month [10/2023] to charges related to the case, in which Menendez is accused of secretly acting as an agent for the Egyptian government.
..... At a hearing last month, [10/2023] a federal prosecutor said he believed Daibies' attorney in the bank fraud case, Lawrence S. Lustburg of Gibbons P.C., faced a potential conflict because he also represents a defendant in the corruption case, Wael Hana, Hana, a halal meat exporter, is accused of bribing Menendez to win the senator's help in getting favorable treatment from Egyptian officials.
..... At the November 16 [2023] court hearing, however, Daibes said he will keep Lustberg as his attorney. Lustberg did not respond to message for comment.
..... The corruption indictment shed light on Menendez's alleged interference with Daibes' bank fraud charges, saying the senator recommended that President Joe Biden nominate a U.S. attorney he believed he could influence in Daibes' favor.
..... "Mr. Lustberg knows certain facts already relevant to those charges," Vikas Khanna, first assistant U.S. attorney for the District of New Jersey, wrote in a letter to U.S. district Judge Susan D. Wigenton last month. [10/2023]
..... In the bank case, the government said Daibes and Michael McManus, the chief financial officer of Edgewater-based Daibes Enterprises, sued other not named in the indictment to secure millions of dollars in loans. the loans were sued for Daibes' benefit without the knowledge of the bank or regulators at the Federal Deposit Insurance Corporation, prosecutors said. The activity allegedly occurred from 2008 through 2013.

Alleged conflicts for Daibes attorney

..... At the November 16 [2023] hearing, McManus officially withdrew his peal deal in the back case, after a judge rejected it last month. [10/2023]
..... The next scheduled court date is for December 15. [2023] McManus's attorney, John Whipple, said Tuesday [11/21/2023] that he had no further comment at this time.
..... at the October [2023] hearing, the government requested that Daibes be made aware of the potential conflict of interest and, if it's appropriate, sign a voluntary waiver to continue with Lustberg as his attorney.
..... At Hana's arraignment in the corruption trial last month, [10/2023] U.S. district Judge Sidney Stein repeatedly asked Hana if he wanted new attorneys.
..... That same day, Hana signed a waiver of any potential conflict of interest involving Lustberg's representation of Daibes, according to court documents.
..... Stein noted that Lustberg could be called as a witness in the Menedez case. Hana said he was satisfied with Lustberg even after Stein reiterated that he would not be able to appeal on the grounds that Lustberg was conflicted.

Plea deal rejected in bank fraud case.

..... In October, [2023] days after Memendez was indicted, Wigenton rejected plea agreements from Daibes and McManus in the bank case.
..... They stemmed from charges filed in 2018 against Daibes when he was indicted on multiple courts of alleged conspiracy to circumvent lending limits set by Mariner's bank, which he founded in 2001.
..... that led to Daibes and now McManus withdrawing their pleas.
..... In 2022, Daibes admitted to gross receipts from Mariner's Bank and pleaded guilty to making false entries in a loan memorandum. His sentencing hearing was delayed four times.
..... Daibes pleaded guilty to a single count of the original 14-count indictment, which cited a 2008 memo for a $1.8 million nominee loan that falsely indented the borrower and the source of repayment.
..... The line of credit was actually for Daibes, who funded the repayment, prosecutors said.

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