Atlantic City Mayor Frank Gilliam
ATLANTIC CITY - Atlantic City Mayor Frank M. Gilliam Jr. has resigned his position after pleading guilty today of defrauding a youth basketball team of $87,000. City Council President Marty Small will be sworn in at noon Friday.
Gilliam pleaded guilty to the charge Thursday morning at the U.S. Federal Court in Camden.
In his resignation letter, Gilliam apologized to the residents of Atlantic City.
Prior to Gilliam's resignation, New Jersey Attorney General Gurbir S. Grewal announced in a release that he filed an Order to Show Cause in New Jersey Superior Court seeking to remove Gilliam from office under New Jersey's Forfeiture of Public Office Statute. In the release, Grewal said Gilliam was "not fit" to hold public office.
During a press conference, Gov. Phil Murphy said Gilliam's actions were "despicable" and called for his resignation.
According to defense attorney Harry H. Rimm of Sullivan & Worcester LLP, Gilliam was charged as a private citizen to a charge unrelated to his job as mayor of the resort and did not take any taxpayer money.
"Mayor 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 in a statement. "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."
Mayor 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, Carpenito said. 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.
According to documents filed in this case and statements made in court:
Gilliam was the co-founder of AC Starz Basketball Club (AC Starz), a non-profit that he incorporated to operate a youth basketball team. While serving as a member of the Atlantic City Council and later, as mayor of Atlantic City, Gilliam solicited donations for AC Starz from various individuals and entities under the false pretense that the contributions were for a youth basketball team and/or school supplies for underprivileged children. In reality, Gilliam used most of the money for personal expenses including luxury clothing, expensive meals, and trips that were completely unrelated to the operation of a youth basketball team. Gilliam defrauded the contributors of $87,215.
The charge to which Gilliam pleaded guilty is punishable by a maximum penalty of 20 years in prison and a potential fine of $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 7, 2020.
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