Murphy Says Gilliam Must Resign

Calling the charge to which Atlantic City Mayor Frank Gilliam pleaded guilty “despicable,” Governor Phil Murphy this afternoon said Gilliam has squandered the trust of the community.

“He must resign,” Murphy said in a formal statement.

The mayor of Atlantic City earlier today admitted to defrauding contributors to a youth basketball team of more than $87,000, U.S. Attorney Craig Carpenito announced.

“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,” 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,” Special Agent in Charge Gregory W. Ehrie said. “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.”

According to documents filed in this case and statements made in court:

Gilliam was the co-founder of AC Starz Basketball Club (AC Starz), a non-profit that he incorporated to operate a youth basketball team. While serving as a member of the Atlantic City Council and later, as mayor of Atlantic City, Gilliam solicited donations for AC Starz from various individuals and entities under the false pretense that the contributions were for a youth basketball team and/or school supplies for underprivileged children. In reality, Gilliam used most of the money for personal expenses – including luxury clothing, expensive meals, and trips – that were completely unrelated to the operation of a youth basketball team. Gilliam defrauded the contributors of $87,215.

The charge to which Gilliam pleaded guilty is punishable by a maximum penalty of 20 years in prison and a potential fine of $250,000 or twice the gross gain or loss from the offense. Sentencing is scheduled for Jan. 7, 2020.

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