Former Atlantic City mayor indicted

By PETER SAMPSON  |  March 27, 1984
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NEWARK, N.J. -- Former Atlantic City Mayor Michael Matthews, thrown out of office two weeks ago, was charged Tuesday with soliciting bribes in return for his agreement to turn over the resort city's government to organized crime figures.

The five-count indictment handed up by a grand jury in U.S. District Court alleged Matthews solicited and accepted at least $150,000 in bribes from the Nicky Scarfo crime family prior to and during his mayoral election campaign in 1981.

It said he received an additional $65,000 from a land developer.

Previous disclosures by officials indicated the Scarfo organization apparently hoped to obtain city-owned land for future gambling casinos and other development, though there was no specific reference to casinos in the indictment.

The indictment did allege that Matthews was to turn control of the government of Atlantic City over to the Scarfo family in return for the bribes.

The indictment also named Frank Lentino, 73, an organizer with Local 54 of the Hotel and Restaurant Employees Union who reputedly had close ties to the Scarfo family.

Both men were accused of extortion and attempted extortion. Matthews also was charged with violating federal interstate laws and causing others to travel in interstate commerce in connection with the receipt of bribe money.

Among other things, the indictment alleged the Scarfo organization tried to control through corruption the government of Atlantic City by paying bribes to Matthews both before and after his election.

The charges involved a $125,000 bribe Matthews allegedly solicited from Lentino and associates of the Scarfo organization in December 1981 and a $25,000 payment after Matthews was forced into a runoff election with Usry, who lost the 1981 election.

The indictment said Matthews also sought financial support for himself and his campaign from Kenneth Shapiro, a prominent Atlantic City developer. It said Matthews received $65,000 from Shapiro, including $35,000 in cash, which he failed to report to state election officials as required by law.

Matthews was thrown out of office by almost a 2-1 margin by Atlantic City voters in the March 13 recall campaign that focused on allegations he mismanaged the office of mayor. He was replaced in the same election by James Usry, an educator who became Atlantic City's first black mayor.

U.S. Attorney W. Hunt Dumont announced the indictment Tuesday and said the grand jury action resulted from an undercover investigation and 'sting' operation started by the U.S. Drug Enforcement Administration in 1980.

In the sting operation, Matthews was to receive $20,000 and a 1 percent interest in a casino-zoned land development in return for using his influence to convey a 21-acre parcel of land in the city's marina area to Piedmont Group -- one of two bogus companies set up by the FBI. The deal did not go through, however.

The mayor acknowledged in February that he had accepted $10,000 in cash from an undercover agent, but contended it was only a campaign contribution.

The investigation of Matthews came to light Dec. 9 when FBI agents, armed with a warrant to search for evidence of extortion, raided Matthews' City Hall offices and seized dozens of files and documents.

The mayor quickly dropped out of sight, prompting headlines saying he feared for his life because of possible organized crime connections to the probe, then resurfaced 10 days later.

In subsequent weeks, dozens of aides and other city officials appeared before a grand jury. Matthews, embroiled in the ultimately unsuccessful legal attempt to block his recall, charged that federal authorities were part of a conspiracy involving state officials and several state judges to oust him.

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