Sharpe James, who ran Newark, N.J., for 20 years and is now a state senator, was taken to a federal courtroom in chains for his initial appearance, The Star-Ledger of Newark reported. Tamika Riley, who allegedly arranged land sales to developers, was also arrested.
Federal prosecutors allege that James used city credit cards to pay for trips that took him from Rio de Janeiro to Martha's Vineyard. Riley was allegedly his companion on some of those vacations.
In the alleged land sale scheme, prosecutors said that James arranged sales at low prices to Riley who resold the property to developers and split the profits with the mayor.
James denies the charges, saying he had no authority in that area.
"When Sharpe James had a choice between enriching himself or helping the people of Newark, he chose self-enrichment," U.S. Attorney Chris Christie said.
James, a former gym teacher, decided not to run for a sixth term as mayor in 2006 when polls showed him losing to Cory Booker. The 2002 electoral match-up between the two was the subject of an Oscar-nominated documentary, "Street Fight."