Attorney General Christopher S. Porrino announced that former New Jersey Assemblyman Robert Schroeder (R-Bergen) pleaded guilty today to stealing nearly $1.9 million from individuals who loaned him money for a business venture in North Dakota and writing over $3.4 million in bad checks to other creditors who loaned him money or provided goods and services for his various companies, including All Points International Distributors, Inc., which sold tents and prefabricated buildings to the U.S. military.
Schroeder, 56, of Washington Township (Bergen County), pleaded guilty today to a single charge of second-degree misconduct by a corporate official before Superior Court Judge Robert Reed in Somerset County. Under the plea agreement, the state will recommend that Schroeder be sentenced to eight years in state prison. He is required to pay full restitution of $5,318,150 to his victims, and he will be permanently barred from public office and public employment in New Jersey.
Four companies that were operated by Schroeder and were indicted with him in December 2012 also pleaded guilty today. Each of those corporate defendants – All Points International Distributors, Inc.; Hercules Global Logistics, LLC; RS Consultants, LLC; and RGS Bergen, LLC – pleaded guilty to a second-degree charge of issuing bad checks. Under the plea agreement, each of the companies will be jointly and severally liable with Schroeder for paying full restitution of $5,318,150 to the victims. Sentencing for Schroeder and the corporate defendants is scheduled for December 22.
Deputy Attorney General Jeffrey J. Manis, who is deputy bureau chief, and Deputy Attorney General Peter J. Baker took the guilty plea and are prosecuting the matter for the Division of Criminal Justice Corruption Bureau, with the assistance of Analyst Kathleen Ratliff, Deputy Attorney General Alexander Sakin, Detective Patrick Squitieri of the New Jersey State Police Official Corruption North Unit, and Investigator Michael La Chapelle of the New Jersey Bureau of Securities. The charges resulted from an investigation by the New Jersey State Police Official Corruption Bureau and the Division of Criminal Justice Corruption Bureau.
Prior to being charged in this investigation, Schroeder was Deputy Republican Whip of the New Jersey General Assembly. He served two terms in the Assembly from 2010 to 2014 representing the 39th Legislative District, which includes portions of Bergen and Passaic counties.
The state’s investigation revealed that Schroeder, through his companies, wrote at least 47 bad checks totaling $3,431,150 to 12 individuals who loaned him funds for ventures involving his various businesses, and to two companies that provided him with goods or services. He knew that the bank accounts against which he wrote the checks did not have sufficient funds to cover them.
In addition, the investigation revealed that Schroeder stole funds from at least five individuals, identified in the indictment only by their initials, who loaned him $1,887,000 for a purported venture involving another company he formed, Hercules Global Logistics, LLC, to supply permanent and temporary housing for an oil drilling project in North Dakota. Schroeder used the money to pay personal expenses and other debts not associated with the project.
All Points International Distributors sold tents, tarpaulins, building components, prefabricated and portable buildings, and other prefabricated structures. Historically, most of its business was with the U.S. military, with contracts providing for such items to be delivered to Afghanistan, Iraq, and other international locations. The state’s investigation revealed that the business began to decline after government contracts dropped off. Schroeder tried to sustain the company by seeking numerous short-term loans from individuals who were promised a high rate of return. As he fell behind on those loan payments, between October 2009 and August 2012, he wrote the bad checks.
Later, in January 2012, Schroeder began to raise funds by soliciting individuals for loans for the new project in North Dakota. He established Hercules Global Logistics, which he said would supply permanent and temporary housing units – and offer catering, design and other services – to establish and maintain a base camp for an oil drilling project. Schroeder claimed he expected to complete the housing project, which he named the Washington Dakota Lodge or Watford Lodge, by the end of 2012. Schroeder instead diverted the funds for personal expenses and other debts.
Schroeder was initially charged by complaint-summons on Aug. 3, 2012 with passing bad checks. At that time, detectives executed search warrants at Schroeder’s home and at a business facility at Prospect Place and Piermont Avenue in Hillsdale which served as headquarters for All Points and Hercules Global Logistics. The state also obtained a court order to seize a number of bank accounts maintained and controlled by Schroeder in various business names. RS Consultants, LLC was operated by Schroeder as a property management firm, and RGS Bergen, LLC was a company he set up for one of his investment properties.