CAMDEN, N.J. _ Atlantic City Mayor Frank M. Gilliam Jr. admitted Thursday to embezzling more than $87,000 meant to buy school supplies and fund activities for a youth basketball club he co-founded, becoming the latest in a long string of the city's elected leaders to face possible prison time.
Even as Gilliam, 49, was raising funds for the Atlantic City Starz, an organization he has touted both in his campaigns and his official biography, he was spending donors' money on luxury clothing, expensive meals and trips that had nothing to do with the underprivileged children the organization was supposed to serve, prosecutors said.
The mayor pleaded guilty to one count of wire fraud in a hearing Thursday before U.S. District Judge Joseph Rodriguez _ and now faces a potential prison sentence of up to 20 years. The judge informed him that his plea could also mean he would no longer be able to hold public office.
Thursday afternoon, New Jersey Gov. Philip Murphy called the charge to which Gilliam pleaded "despicable," and said he "must resign" to make way for a mayor who would focus on the "betterment of Atlantic City and not themselves." But a spokeswoman in his seventh-floor City Hall office said Gilliam was still the mayor.
"When a scheme depletes charity for children, it's unconscionable," said Gregory W. Ehrie, special agent in charge of the FBI's Newark office, in a statement. "But when the fraud is perpetrated by someone the public trusts, it damages the community's confidence in their public servants. This defendant betrayed the trust of his community and of people of people who wanted to improve the lives of children."
A former city councilman elected to lead the cash-strapped casino town in 2017, Gilliam declined to comment when asked by reporters after Thursday's hearing whether he intended to resign his post. His lawyer, Harry H. Rimm, stressed that the mayor's crimes had no connection to his role as a public official and did not involve taxpayer funds.
"Mr. Gilliam, who is a lifelong resident of Atlantic City, has admitted his wrongful conduct, is accepting responsibility for his actions and is genuinely remorseful," he said.
In court, Gilliam showed no emotion, responding succinctly to the judge's questions while his wife, Shawna, sat in the front row. She had accompanied him there after Gilliam departed their Atlantic City home several hours earlier, with his passport in hand.
He was released hours later on a $100,000 unsecured bond pending his Jan. 7 sentencing hearing.
As part of his guilty plea, Gilliam agreed to repay the money he stole from the basketball nonprofit between 2013 and 2018 _ in part with more than $41,000 in cash that FBI agents seized from his home last year. Gilliam founded the charity along with former Atlantic City basketball alumnus Keith Faden in 2011.
Thursday's hearing brought to a head speculation that has swirled around Gilliam, a Democrat, since the day he was elected in 2017. Questions arose over checks that were deposited into his campaign account but were made out to the Atlantic City Democratic Committee. He has dismissed that as an oversight.
Then in December, FBI and IRS agents raided his home, carting off computers and files, amid reports that his campaign finances and the nonprofit he founded had drawn federal scrutiny.
That search came five days after state prosecutors announced that they had decided not to charge Gilliam and Councilman Jeffree Fauntleroy II for their involvement in a separate incident _ a Nov. 11 fight outside the Haven nightclub at the Golden Nugget casino.
Atlantic City Councilman George Tibbitt has said he had been questioned by the FBI as a possible victim of campaign finance violations. He ran on the same ticket as the mayor, but the two have had a falling out.
In March 2018, a judge dismissed a citizens' complaint alleging Gilliam, a Democrat, stole a $10,000 campaign check not meant for him.
In the ruling, Superior Court Judge Bernard DeLury said there did not appear to be "even a scintilla of evidence" of wrongdoing by Gilliam or his campaign chair, Rich Winstead, when Gilliam endorsed and deposited a $10,000 check from the Atlantic County Democratic Committee that was made out to the City Democratic Committee. Gilliam said he returned the money to the county Democratic Committee.
What the mayor's guilty plea Thursday meant for the future leadership of Atlantic City remained uncertain. Four of the city's last eight mayors _ as well as a host of past City Council members _ have been arrested on corruption charges.
Current City Council President Marty Small Sr. said Thursday afternoon that he had not received any official notification that Gilliam had relinquished office. Should that happen, the city's Democratic Committee would submit a list of three potential replacements from which city council would select a successor.
A spokesman for Murphy declined to comment. Atlantic City remains under state control, after the administration of former Gov. Chris Christie took over management of the city in 2016.
