Judge questions N.J. prosecutors about George Norcross racketeering case as defense calls for charges to be tossed

TRENTON — A New Jersey judge on Wednesday quizzed state prosecutors about their racketeering case against George E. Norcross III, asking why the Democratic power broker’s alleged threats against a developer strayed beyond acceptable hard bargaining and crossed the line into criminality.

“This reads like two guys were similarly pugilistic, but one guy may have more juice,” Mercer County Superior Court Judge Peter Warshaw said of the 111-page indictment handed up by a grand jury in June that accused Norcross and his associates of shaking down developer Carl Dranoff and others to obtain valuable waterfront property in Camden.

Norcross, 68, and his five codefendants — his brother Philip Norcross, former Camden Mayor Dana L. Redd, attorney William Tambussi, businessman Sidney R. Brown, and businessman John J. O’Donnell — sat quietly in the fourth-floor courtroom in Trenton as their lawyers urged the judge to dismiss the indictment.

Prosecutors say Norcross told Dranoff in the summer of 2016 that if he did not agree to sell his property rights under the power broker’s preferred terms, Norcross would “f— you up like you’ve never been f— up before” and “make sure you never do business in this town again.”

The judge noted that under New Jersey law, some threats in the context of business negotiations are perfectly legal. “Isn’t that what this is all about: two guys jockeying for position?” Warshaw asked Assistant Attorney General Michael D. Grillo. “Somebody’s gonna win, somebody’s gonna lose?”

Grillo responded that such threats were lawful only when limited to the businessmen’s “own personal dealings.”

“When Mr. Norcross threatens unrelated projects, they become criminally extortionate,” Grillo said, arguing that Norcross threatened Dranoff’s broader portfolio in Camden. The indictment says that two years after Norcross extorted Dranoff, the power broker continued to attack the developer by causing city officials to harm his other interests in Camden.

Norcross’ threat communicated to Dranoff that “through [Norcross’] ability to exercise control over the City of Camden’s government, Mr. Dranoff would be prevented from doing business in the city at all — with anyone,” Grillo said at another point. “That is a threat of a completely different animal.”

George Norcross and his five codefendants have pleaded not guilty to charges including racketeering, extortion, and official misconduct.

Attorneys for Norcross — an insurance executive, chair of the board at Cooper University Health Care, and longtime leader of the Democratic Party in South Jersey — have argued in court filings that his alleged threats amount to nothing more than “hardball business negotiations.”

Even if the judge ultimately dismisses Norcross’ motion to dismiss the indictment — such a request must meet a high bar — the daylong argument that played out Wednesday offered something of a preview of a potential trial.

Norcross and his associates, the prosecution said, were bullies who used their control of Camden’s government to force their victims to surrender their property — lest they face financial and reputational ruin. “Rather than suffer the pain … his victims submitted to his threats,” Grillo said.

The defense, for its part, characterized the Norcross-led redevelopment of the waterfront as a “renaissance” for the city and portrayed Dranoff as a “professional victim” who was paid millions of dollars for his property rights — hardly the typical portrait of an extortion victim.

“He should be saying, ‘Thank you, Mr. Norcross,’” said Norcross attorney Michael Critchley.

Yaakov Roth, also an attorney for Norcross, said the episode showed two “sophisticated businessmen” negotiating over a transaction that would be “mutually beneficial.” Norcross’ threat was “purely economic” and closely connected to the underlying deal, he said.

“He’s saying, ‘If you blow up this plan to rehabilitate this city, don’t expect to be getting opportunities in this city again,’” said Roth, a Washington-based attorney at Jones Day who has successfully represented clients accused of corruption before the U.S. Supreme Court. “I think that’s a perfectly routine type of statement one would make in a business context.”

The defense has also argued that the charges are time-barred under the statute of limitations and that the indictment casts a chill over the routine practice of law.

Kevin Marino, an attorney for Philip Norcross, told the judge that the indictment criminalizes conduct that is protected by the First Amendment right to petition the government.

For example, the indictment says one objective of the criminal conspiracy was “influencing the New Jersey Legislature” to pass economic-development legislation in 2013 “in a manner that greatly increased tax credit awards for projects in Camden and was tailor-made to advance the interests of” George Norcross and his friends.

According to the indictment, once George Norcross and his associates extorted Dranoff and others, they used the property to build an office tower and apartment complex and obtain millions of dollars in tax credits to offset the costs of construction, benefiting from the state economic development program they helped shape.

“This is a law reform effort,” Marino said, describing prosecutors’ attitude as “‘We don’t like the fact that these guys have power. These guys have juice.’”

“We don’t deny extraordinary access,” Marino said at another point. “We embrace extraordinary access. That’s how Camden went from being one of the nation’s most dangerous cities to being a city that President Obama came and visited and called a true renaissance story in the United States.”

At one point, the judge seemed to share some of the defense’s skepticism. “The whole idea of people who aren’t in office being trusted advisers or people who have the ability to be a voice and maybe even the last voice in the room — is that in and of itself criminal?” Warshaw asked.

Prosecutors countered that the defense had mischaracterized the indictment. Even if Philip Norcross was performing “legitimate legal work,” he can still be charged with crimes “if that conduct furthered a criminal objective,” Grillo said.

For example, the prosecutor said, the indictment alleges that when Camden nonprofit Cooper’s Ferry Partnership sought to redevelop an office complex known as L-3, Philip Norcross in 2014 demanded that the organization partner with the Norcross brothers’ preferred investor.

In another episode cited in the indictment, Philip Norcross allegedly directed Mayor Redd to ignore Dranoff’s phone calls as a means of pressuring the developer to surrender his property. “If you accept all those as true in their context, that is sufficient proof for criminal conduct,” Grillo said.

More broadly, prosecutors said the grand jury had properly charged the crimes alleged in the indictment, adding that many of the defense’s arguments were “better suited for trial,” or at least a separate motion challenging the sufficiency of the evidence.

But defense lawyers said it was the judge’s job, not the jury’s, to determine the law — and whether the factual allegations described in the indictment violated it.

“The question for the court is: Does the indictment allege facts that constitute extortion?” Roth said. “That’s a traditional question of law for the court. Now is the time for the court to decide it.”