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FBIFederal Bureau of Investigation

# FBI Newark History

History

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# FBI Newark History

#### **Early 1900s through 1930s**

The FBI first opened an office in Newark sometime between 1914 and 1917—most likely closer to the latter year, when the young Bureau was growing to address its rising war-time responsibilities.

The earliest records show Newark agents investigated draft evaders, subversives, and other war-related matters, along with the wider range of federal criminal violations. The office remained open through the end of World War I and even during the downsizing of the Bureau in the early 1920s.

On January 30, 1925, however, the Bureau Director wrote to Newark Special Agent in Charge W.B. Burpo, advising him that the division was to be closed immediately as part of a centralization of offices nationwide. All records, files, property, and personnel—which included five agents and a stenographer—were transferred to New York.

On July 1, 1935, the Bureau transferred its New Jersey investigations to a new field office in Trenton. Then, in April 1937, operations in the state were moved from Trenton back to a newly-established office in Newark, where W.S. Devereaux was appointed acting special agent in charge. The division soon began handling a wide range of cases, but national security matters began to increase in importance as hostilities grew in Europe and Asia, especially since the coastal state was home to many businesses and military facilities. In May 1939, FBI Headquarters even suggested designating one agent exclusively to handle espionage investigations in Newark.

#### **1940s to 1950s**

Special Agent in Charge W.B. Burpo

Paul Fehse (left)

This need for one new agent quickly increased to dozens as war broke out overseas and the FBI ramped up its efforts to protect the homeland from espionage, sabotage, and foreign-directed subversion.

The Newark Division played a key role in breaking the back of Nazi espionage in the U.S. through a major case that came to fruition in 1941 with the arrest of 33 members of a double agent spy ring based in New York and led by Fritz Duquesne. Newark agents pursued a sub-ring of more than a dozen spies in the case; two of the most significant were Carl Reuper and Paul Fehse, both U.S. citizens of German birth. Reuper ran a number of agents who sought to steal technological secrets. Fehse served as a cook aboard many ships that sailed from New York to Europe; he set up meetings, directed members’ activities, correlated information that had been developed, and arranged for this information to be transmitted to Germany—chiefly through Eric Sebold, a German agent secretly working for the FBI. Fehse was scheduled to sail from Hoboken, New Jersey to Lisbon, Portugal on March 29, 1941 when Newark agents arrested him. Both Fehse and Reuper received significant sentences for their crimes. 

With the formal entry of the U.S. into World War II in December 1941, the Newark FBI went on a 24-hour footing and further increased its national security work. It rounded up enemy aliens known to have ties to Axis intelligence and propaganda operations, continued to help survey critical manufacturing plants and businesses for security weaknesses, pursued potential enemy agents, and more.

At the same time, the division continued to handle criminal investigations. In June 1942, for instance, Newark agents and Union City police arrested a local doctor for altering the fingerprints of a burglar named Roscoe James Pitts and harboring him as he convalesced. In another case, the division investigated three union officials who had set up a fraudulent aid group called the Navy Relief Society. Newark agents also worked cases involving theft from interstate shipments, violations of the White Slave Traffic Act, theft of government property, and other crimes.

During the early years of the Cold War, Soviet penetrations of the U.S. government—and new laws passed in response—led to a greatly increased case load throughout the FBI, which was asked to investigate the loyalty of government employees. During June 1948, for instance, the Newark Division handled 472 such cases, although it generally averaged about 100 of these investigations each month. The division was also heavily involved in the investigation of Soviet spies Julius and Ethel Rosenberg in 1950. In addition, Newark agents were called on to investigate the famed scientist Albert Einstein due to his association with a number of Communist front groups and the connections of his secretary to Soviet intelligence in Germany in the 1930s. 

By the late 1950s, the near equal balance of national security and criminal cases was starting to change. In 1959, the Newark special agent in charge reported that between 1957 and 1958 the office had seen a 32 percent rise in criminal investigations, a 19 percent drop in security cases, and a 16 percent jump in applicant and other investigations.

Roscoe James Pitts

Pitts’ altered fingertips

One case that made headlines during this time was the capture of the thieves who had stolen the famed Krupp diamond, a bluish white stone that weighed more than 33 carats and was roughly the size of a small marble. The thieves were tracked across the country to a local hotel, where Newark agents arrested them and recovered the gem.

#### **1960s and 1970s**

Early Newark Division building

During the 1960s, new anti-gambling and racketeering laws enabled Newark agents to more effectively combat organized crime. In April 1963, for instance, the division noted that the workload of its special agent accountants during the first three months of the year had been almost twice that of the overall field average because of gambling/racketeering investigations.

By the mid-1960s, the office was handling more than 4,000 cases a year, operating four squads to investigate criminal matters and two to handle national security ones. Significant spikes in bank burglary, interstate theft, automobile theft, and racketeering investigations helped fueled this growth. Also contributing to the increased case load were the tensions of the 1960s—including riots in Newark and elsewhere around the country in July 1967 that left dozens dead and hundreds injured—along with the city’s growing population of immigrants. Newark, for example, had the nation’s third largest concentration of persons of Cuban descent. Four Spanish-speaking agents were assigned to the division to help with the uptick in matters related to these groups.

In the mid-1970s, casino gambling was legalized in Atlantic City. As its approval appeared imminent, the Newark special agent in charge asked FBI Headquarters if he could reassign four of his agents to the Atlantic City Resident Agency, giving it a total of a dozen investigators. The move was approved. 

As a growing hub for air, rail, ship, and freight traffic, the city of Newark also became a nexus for related crimes. In November 1975, the division noted that it was investigating a large number of tractor thefts. These cases were so significant that a number of Newark agents were trained by truck manufacturers at their factories, becoming leading experts in tractor examinations in the Northeast and helping to instruct other Bureau investigators and law enforcement partners.

The division also pursued other crimes related to the trucking industry. In 1976, for example, the Newark FBI began an extensive racketeering investigation into the International Brotherhood of Teamsters Local 560 in Union City. Genovese organized crime family figures like Anthony Provenzano and Salvatore Briguglio were key players in the union. The investigation led to multiple prosecutions and eventually a major civil suit against Local 560, which forced it under federal oversight until 1999.

National security issues continued as well. On May 20, 1978, Newark agents arrested two Soviet officials—Valdik Enger and Rudolf Chernyayev—on charges of espionage as part of a double agent investigation called Operation Lemon Aid. They were convicted and exchanged for five Soviet dissidents. A third Soviet, Vladimir Zinyakin, had diplomatic immunity and was later expelled.

#### **1980s and 1990s**

During the 1980s, the division continued to focus on espionage, organized crime, and white-collar crime, along with property crime and domestic security/international terrorism.

The division’s organized crime program was especially active, focusing on the activities of the seven La Cosa Nostra (LCN), or Mafia, families operating in New Jersey: Genovese, Bruno, Gambino, Luchese, Bonanno, DeCavalcante, and Columbo. In 1985, the Newark FBI joined a LCN drug enterprise case originating in Buffalo. The undercover operation—called BUSICO, short for **Bu**ffalo **Si**cilian **Co**nnection—was directed at Italian/Sicilian drug cartels throughout the U.S. that operated independently but were often connected through various associations. The three-year investigation culminated in December 1998 with simultaneous arrests in Buffalo, Newark, York City, Philadelphia, Baltimore, Miami, San Francisco, and Rockford, Illinois, as well as in Italy. The case was made with significant help from international, federal, and local law enforcement, much like the similar Pizza Connection case.

Newark agents also worked to take down other criminal enterprises. On November 5, 1981, for example, 17 members of a sect called the New World of Islam were convicted in Newark on federal racketeering charges stemming from an extensive investigation into nine bank robberies over a 10-month period. In April 1988, the division also joined other FBI offices and federal agencies, as well as local authorities in the U.S. and Hong Kong, in Operation Bamboo Dragon. This investigation uncovered and broke up a major international heroin and gun smuggling ring. Arrested and convicted in the case were 11 people in Hong Kong, five in Newark, and two in New York City.

Following the successful cooperative investigations of the 1980s, the FBI in Newark and nationwide began placing increased focus on deeper and more permanent partnerships. One example came in October 1990, when a Violent Crimes Fugitive Task Force was launched in New Jersey. The task force brought together agents from the Newark Division; investigators from the New Jersey State Police, the Newark Police Department, the East Orange Police Department, and the Essex County Sheriff’s office; and prosecutors from Essex County to target wanted fugitives.

In February 1996, 44 people were arrested in seven U.S. cities—including Newark—as part of “Zorro II,” a joint initiative of the FBI and DEA targeting Colombian and Mexican drug traffickers operating in the United States. More than 400 kilos of cocaine were seized, as well as a half-pound of crack cocaine and approximately $700,000 in cash and property. Major FBI offices involved included Los Angeles, Miami, New York, Newark, Philadelphia, Richmond, and Washington, D.C. The next year, another cooperative initiative—called Island Green—successfully targeted violent Jamaican drug trafficking organizations exchanging immigration “green cards” for drugs and money. The investigation identified seven major and extremely violent Jamaican drug trafficking organizations and 25 other drug smuggling groups involved in the exchanges. A total of 127 people were indicted in Boston, Kansas City, Los Angeles, Miami, New York, Newark, and Philadelphia. In the late 1990s, the Newark Division also joined other FBI offices in a trio of multi-agency investigations into a major international heroin trafficking organization primarily made up of individuals of Nigerian descent. 

White-collar investigations—particularly those involving public corruption—remained a strong focus during the 1980s and 1990s. In the early 1980s, the division played a key role in the ABSCAM investigation, especially in probing New Jersey Senator Harrison Williams, who was convicted in the sting operation. In 1993, a task force was created to look into charges of corruption in the administration of Newark Mayor Sharpe James. The mayor’s chief of police was convicted on corruption charges in 1996; his chief of staff was convicted the following year. The mayor himself was convicted as well, but not until 2008. In January 1998, the Newark Division started a 24-hour, toll-free public corruption hotline for area residents to report public figures possibly engaged in corrupt practices.

The Newark Division has also tackled new variations of crime. In February 1999, for example, fugitive Igor Erlikh became the first person extradited to the U.S. from Ukraine. Erlikh was wanted for conspiracy, wire fraud, money laundering, and tax evasion of approximately $140 million. He had been arrested in December 1998 in Odessa, Ukraine following an investigation by the Newark FBI and its partners. The extradition was arranged by a host of agencies, including the FBI’s overseas office in Kiev.

That same year, working off a tip received from America Online, the New Jersey State Police and the Newark Division arrested David L. Smith for developing and disseminating a destructive computer virus known as Melissa. Smith pled guilty to one federal count and four state felony counts, admitting that he had harmed a million computer systems and caused some $80 million in damages.

#### **Post-9/11**

The attacks of 9/11 led to the most far-reaching investigation in FBI history, and the Newark Division played an important role, especially since one of the hijacked planes—United Airlines Flight 93—had departed from Newark. In the ensuing months, the division joined the rest of the Bureau in making the prevention of terrorist attacks its top priority. It quickly began to build upon the work of its previously established Joint Terrorism Task Force and to deepen its intelligence and analytical capabilities.

Former New Jersey Senator Harrison "Pete" Williams

These changes helped pave the way for the 2003 arrest of a British national named Hemant Lakhani, who attempted to sell shoulder-fired missiles to what he thought was a terrorist group intent on shooting down U.S. commercial airliners. The case was led by the Newark Joint Terrorism Task Force and featured an undercover sting involving FBI agents and investigators from Russia and other nations. Lakhani was convicted on multiple counts in April 2005 and later sentenced to 47 years in prison.

FBI agents in Newark lead arrested suspects in the corruption probe onto a bus. (AP Photo)

In August 2005, a Newark FBI case called Operation Royal Charm and a related Los Angeles investigation called Operation Smoking Dragon culminated in the arrest of 59 individuals nationwide. The cases targeted a major international crime ring attempting to smuggle counterfeit currency, weapons, drugs, and cigarettes into the United States. To help arrest suspects in the Newark case, conspirators here and overseas were invited to a wedding on a yacht docked outside of Atlantic City. They were sent real invitations, but the wedding was a ruse. Several individuals were arrested when they showed up for transportation to the “ceremony.”

On September 10, 2005, Newark agents arrested Leandro Aragoncillo and Michael Ray Aquino for conspiring to reveal government secrets and acting as foreign agents. Aragoncillo, who was working as an FBI analyst at the time and had previously served as a military staff member in the office of the U.S. vice president, pled guilty in May 2006 to using FBI computers to search for documents relating to the Philippines and sharing that information with Aquino and with Philippine political opposition figures. He was sentenced to 10 years in prison for espionage. Aquino—the former deputy director of the Philippines National Police who was living in New York City—also pled guilty in the case.

Tragically, the Newark FBI lost its first special agent in the line of duty on April 5, 2007, when Special Agent Barry Lee Bush was killed by gunfire during a SWAT operation involving heavily armed serial bank robbers.

In 2009, the division was again in the news for its work in pursuing political corruption and related crimes. On July 23, Newark agents and IRS investigators led the arrests of 44 individuals—including mayors, rabbis, state legislators, and numerous political operatives—in a two-track multi-agency investigation into public corruption and money laundering rings. One part of the case was the continuation of a long-running Newark probe called Operation Bid Rig.

For more information on Newark and the Bureau over the years, please visit the FBI History website.

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