SOMERVILLE – Described as a heartless “fraudster” and “con man” who ran a “ponzi scheme” from 2009 to 2012 that preyed on his family and friends, former Assemblyman Robert Schroeder was sentenced to eight years in state prison Monday in Somerset County Superior Court.
In October, Schroeder, 56, pleaded guilty to charges that he stole nearly $1.9 million from people who loaned him money and wrote more than $3.4 million in bad checks to other creditors.
Under a plea deal, Superior Court Judge Robert B. Reed said Schroeder must serve at least 36 months before he is eligible for parole and will be subject to three years post-release supervision. He is also required to pay back the more than $5.3 million he stole from his victims and is barred from holding public office or public employment in New Jersey.
Reed told Schroeder that the court will closely monitor his finances – victims have accused Schroeder of hiding his assets in his wife’s name – and if he doesn’t made a sincere effort to pay back his victims after his release from prison he could find himself back in jail.
John Whipple, Schroeder’s attorney, had asked for a suspended sentenced. In pre-sentencing discussions, Schroeder had offered to pay his victims $1.1 million per year over five years if he could avoid any jail time, it was revealed in court.
Reed denied the request, saying it was “mind-boggling” the amount of people Schroeder “duped” with his “classic ponzi scheme” and he deserved jail time for his actions.
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Schroeder apologized to his victims by name, turning around and addressing each one who was in court. He remained highly-visible in his Washington Township neighborhood even after is arrest, according to victims.
After sentencing, Whipple asked Reed to grant Schroeder a surrender date of March 15 so he could take care of personal matters, but the judge denied the request, pointing to repeated delays in the case. Monday was the fourth time his sentencing hearing was rescheduled in this long-running saga.
Somerset County Sheriff’s officers then handcuffed Schroeder and led him out of the courtroom to begin serving his sentence.
“Justice was served,” said Joe Durso, a friend of Schroeder’s for over 20 years who loaned him more than $200,000. “Hopefully, he does more than one-and-a-half years. He’s a very delusional man. This is a lesson learned for many of us. It hurts because he was a friend. We’re glad it’s behind us. It’s been five long years.”
Durso was among four victims who made impact statements over two sentencing dates. George Frye, a friend who loaned Schroeder more than $500,000 and Maria Kelly, a military widow and single mother who loaned Schroeder approximately $70,000, also spoke.
“We respect the court’s sentence,” said Whipple. “We had hoped it was less than eight years. Mr. Schroeder is committed to working very hard to repay his victims. The sooner he’s released, the sooner he can start to replay his victims.”
Deputy Attorney General Jeffrey Manis prosecuted the case. He declined comment afterwards. In court, he called Schroeder a “fraudster” and “con man.”
Bid to dismiss charges denied
Nearly a half dozen victims of Schroeder’s scheme attended the sentencing on Monday and two gave emotional victim’s impact statements. On Jan. 17, two others gave statements.
Schroeder served two terms in the Assembly from 2010 to 2014, representing the 39th district that includes parts of Bergen and Passaic counties.
Schroeder’s company, All Points International Distributors, primarily sold tents and prefabricated buildings to the U.S. military. The state’s investigation revealed that business declined as government contracts dropped off with the reduction of troops in Iraq and Afghanistan.
Schroeder tried to sustain the company by seeking numerous short-term loans from individuals who were promised a high rate of return. But as he fell behind on those loan payments, from October 2009 to August 2012, he wrote the bad checks, authorities said.
In January 2012, he began raising money for the oil-drilling project in North Dakota and established Hercules Global Logistics to maintain a base camp there. He claimed he expected to complete the housing project by the end of 2012, but authorities said he instead diverted the money he had raised to cover expenses and to pay off loans.
Schroeder pleaded guilty second-degree misconduct by a corporate official and issuing bad checks on behalf of his four companies: All Points International Distributors, Inc., Hercules Global Logistics, LLC, RS Consultants, LLC and RGS Bergen, LLC.
The theft by deception charge was dismissed, the misconduct charge encompasses all the counts in the indictment.
Dave Hutchinson may be reached at dhutchinson@njadvancemedia.com. Follow him on Twitter @DHutch_SL. Find NJ.com on Facebook.
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