Atlantic City Mayor resigns after pleading guilty to stealing from youth basketball program

“When a scheme depletes charity for children, it’s unconscionable.”

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Shortly after pleading guilty to defrauding contributors to a youth basketball team of more than $87,000, the mayor of Atlantic City resigned late Thursday. While falsely claiming to solicit donations for a nonprofit youth basketball organization, the corrupt mayor instead used most of the money for personal expenses, including luxury clothing, expensive meals, and trips.

According to court documents, Frank Gilliam was a co-founder of AC Starz Basketball Club and incorporated the nonprofit organization in 2011. While serving as a member of the Atlantic City Council in 2013 and later, as mayor of Atlantic City in 2018, Gilliam solicited donations for AC Starz from various individuals and entities under the false pretense that the contributions were for a youth basketball team.

Instead, Gilliam used most of the donations to purchase expensive clothing, trips, and meals for himself. Abusing the power of his office while neglecting underprivileged children, Gilliam defrauded the contributors of $87,215.

“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,” U.S. Attorney Craig 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.”

“When a scheme depletes charity for children, it’s unconscionable,” stated Special Agent in Charge Gregory Ehrie. “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 who wanted to improve the lives of children. The FBI is committed to uncovering fraud and corruption. If you break the law, no matter who you are, you will face the consequences.”

Last month, State Attorney General Gurbir Grewa announced that his office had filed an order seeking the removal of Gilliam from office. Grewa asserted that Gilliam was “not fit for office.”

On Thursday, the Justice Department announced Gilliam had plead guilty to one count of wire fraud after defrauding contributors of AC Starz Basketball Club. A few hours later, Gilliam submitted his resignation letter.

In the letter, Gilliam wrote, “It is with a heavy heart that I tender my resignation as Mayor of the City of Atlantic City, effective immediately. I would like to apologize to the residents of the Great City of Atlantic City who deserve stability and respect. My sincere apologies to each constituent that voted for me and had high hopes in my tenure.”

Gilliam faces up to 20 years in federal prison and a potential fine of $250,000 or twice the gross gain or loss from the offense. His sentencing is scheduled for January 7, 2020.

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