Daibes sentencing pushed back again, causing experts to ponder link to Menendez probe

Edgewater developer Fred Daibes — who has been linked to an ongoing federal probe of Sen. Bob Menendez — has had his sentencing postponed for the fourth time since he pleaded guilty to banking crimes in April 2022.

The continuing delays have legal experts wondering why the sentencing has been pushed back yet again, and whether it could be related to the Menendez investigation.

Daibes, whose projects helped transform Edgewater into Bergen County’s piece of the Hudson River Gold Coast, was indicted on multiple counts in 2018 for alleged conspiracy to circumvent lending limits set by Mariner's Bank, which he founded in 2001.

Daibes' guilty plea was to a single count of the original 14-count indictment, which included a 2008 memo for a $1.8 million nominee loan that falsely stated the borrower and the source of repayment. The line of credit was actually for Daibes, who funded the repayment.

According to the agreement, the charge to which Daibes pleaded carries a maximum penalty of 30 years and a fine of at least $1 million, but the plea resulted in a probationary sentence.

Delays add to mystery

Experts say the delay in Daibes' sentencing only adds to the mystery of what's been going on behind the scenes after the generous plea deal.

“Mr. Daibes continues, as he always has, to look forward to the favorable conclusion of his criminal case as soon as possible," said Lawrence Lustberg, Daibes' lawyer.

Thea Johnson, a law professor at Rutgers Law School, said there are many reasons why sentencings are postponed, but it is unusual for one to be delayed four times over the course of 18 months, as Daibes' has.

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Federal sentencing can take up to a few months, even if a plea agreement with both parties is in place, Johnson said.

Typically, there is a pre-sentence report done by the probation department. “This gives the judge a sense of who this person is and goes over the facts of the case and any other personal information, background and community ties,” she said. “Both sides will also still prepare arguments for the sentencing — but that still doesn't explain why there are so many delays here. That leaves more of a mystery, especially if no one is saying why."

Trips to Qatar, England, Italy, Bahamas

Daibes' latest sentencing date had been July 27, but it was rescheduled recently and moved to Oct. 26.

Since pleading guilty, Daibes has been granted permission to travel to Qatar and England for business deals and to Italy and the Bahamas for vacations, court records show.

Daibes' case raises a lot of "little red flags," said Patrice Schiano, a doctoral lecturer at John Jay College of Criminal Justice who is also a forensic accountant and a non-practicing attorney and has worked on national security investigations for the FBI and in financial fraud cases.

“When you read his history, all these little red flags start going off,” Schiano said. “The real question now is: Why is the federal sentencing taking so long? He’s the perfect type of person to roll over on someone.”

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“He got such a slap on the wrist, there really is no hurry to do a quick sentencing,” Schiano said. “It would make sense that the government is still talking to him, and maybe he’s trying to lessen probation even more.”

Daibes is mentioned in subpoenas issued for Menendez.

Menendez investigation

Menendez confirmed in October 2022 that he was the subject of a criminal investigation undertaken by the U.S. Attorney's Office for the Southern District of New York. At the time, advisers to New Jersey's senior senator acknowledged the new investigation but didn’t provide any further details.

State Sen. Nicholas Sacco, D-Hudson, who also serves as mayor of North Bergen, received one of the subpoenas, his spokesman, Phil Swibinski, told NorthJersey.com and The Record.

The subpoena issued to Sacco requests correspondence related to Menendez and Daibes, according to a source who has knowledge of the subpoena but was not authorized to discuss its contents.

More than $1 million from Mariner's Bank

The original indictment against Daibes found that he and Michael McManus, the chief financial officer of Daibes Enterprises, allegedly used others not named in the indictment to secure millions of dollars in loans — which were used for Daibes' benefit — without the knowledge of the bank or the Federal Deposit Insurance Corp. The scheme ran from 2008 through 2013.

Daibes admitted to receiving more than $1 million in gross receipts from Mariner's Bank, pleading guilty to making false entries in a loan memorandum.

“The fact is he was indicted on 14 counts and the government was going after him big time and then they reduced the sentencing the way they did,” Schiano said. “It was a non-violent crime, and they do go lighter on white-collar criminals, but this seems excessively light.”

Johnson also found the delays unusual because most defendants will want to serve their probation and be done.

“You want it to start and end quickly,” she said. “Now you’re in a position where the court is watching you and you are at risk if the case is still pending. You can be rearrested. Sentence recommendations can change.

"It’s fascinating that a lawyer hasn’t made some motion to move this along to be done with the case, but that’s part of the mystery," Johnson said. "What’s the motivation of the parties to not push this forward?”

Staff Writer Katie Sobko contributed to this story.

This article originally appeared on NorthJersey.com: Fred Daibes sentencing delayed again. Bob Menendez link possible?