Federal prosecutors are looking into whether an admitted felon helped arrange to give gold bars worth hundreds of thousands of dollars to New Jersey Sen. Robert Menendez or his wife in exchange for help, sources familiar with the matter tell News 4.
Investigators want to know if Menendez, a Democrat, offered to contact the Justice Department to try to help that man who was accused of banking crimes. Those questions are now before a federal grand jury in Manhattan that is considering whether to hand up corruption charges against the senior senator from New Jersey.
Sources say witnesses are now testifying before that federal grand jury. Part of the investigation centers on the senator's ties to Fred Daibes, a New Jersey developer and one-time bank chairman. Officials with the FBI and IRS Criminal Investigation want to know if Daibes or his associates gave gold bars to the senator's wife, Nadine Arslanian -- gold bars worth as much as $400,000.
At the time of the gift handoff, Daibes was facing federal bank fraud charges that could have landed him up to a decade in federal prison.
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Sources familiar with the matter say federal prosecutors have been asking if Menendez offered to help support Daibes with his criminal case by contacting Justice Department officials about the case. If the senator did offer to act in exchange for expensive gifts, legal experts say that could be a crime.
"For purposes of the Federal Extortion Act, it makes no difference if the senator took an official act so long as he accepted the money and there was knowledge the money was in exchange for that official influence, even if he never carried out what he had promised he would do," NBC Legal Analyst Danny Cevallos said.
Menendez disclosed his family received the gold bars back in 2020 -- but he disclosed that asset only after the federal criminal investigation was underway.
Daibes faced more than a dozen counts of bank fraud for lying about a $1.8 million loan from Mariner's Bank where he served as chairman.
Last year, New Jersey's U.S. Attorney's Office agreed to let Daibes plead guilty to one count and serve probation, saying the fraudulent loan was paid back and Daibes had no criminal past.
Sources told News 4 there is no indication U.S. Attorney Philip Sellinger or his office were ever contacted by the senator -- but the two men had been close, with Sellinger appointed to the position with the senator's support, and Sellinger previously serving as a campaign fundraiser for Menendez.
A spokesperson for the U.S. Attorney's Office said, "U.S. Attorney Sellinger was recused from the Daibes matter and all activity by the office related to that matter was handled appropriately, according to the principles of federal prosecution."
Federal Judge Susan Wigeton has delayed the bank fraud sentencing for Daibes three times in the last year. Daibes' lawyer has issued denials that he is cooperating against Menendez.
"Of course the government would much rather have a cooperator take the stand raise their right hand and point at the defendant in the courtroom," Cevallos said.
The Democratic senator's spokespeople and his attorney did not respond to phone and email requests for comment. Attorneys for Daibes also declined to comment.
U.S. Attorney Damian Williams, who is leading the investigation, declined to take questions about the investigation during an unrelated news conference on Tuesday. His spokesperson Nick Biase also declined to comment.
Spokespeople for the FBI and IRS Criminal Investigation also declined comment.
The issue of whether Menendez improperly accepted gold bars is just one part of the investigation.
As News 4 first reported, officials are also looking into whether Menendez or his now wife improperly took gifts, including use of a Mercedes and a luxury D.C. apartment from the owners of a New Jersey business. That business, IS EG Halal, won an exclusive contract with the Egyptian government to perform all Halal meat inspection for the county, even though the firm had no prior experience.
Investigators want to know if Menendez used his position as chair of the Senate Foreign Relations Committee, which oversees billions in aid to Egypt, to help that New Jersey firm get the contract in exchange for gifts.
A spokesperson for IS EG Halal has issued a denial of ever giving the senator any gifts and said they won the Egyptian contact on their merits.
Menendez previously denied any wrongdoing back in May: "I'm sure it's going to end up in absolutely nothing."
