Ex-Dem Party Boss Charged with Bankrupting NJ Union

Charles Cart, the former Democratic Party boss for Sussex County, appeared in federal court on March 22 and pled not guilty to allegations of embezzlement and money laundering that bankrupted a local union he founded and once ran.  The same day, Cart was sued by Stacey Melendy, who accused Cart of firing her from his medical company after she got pregnant and refused to get an abortion.


Cart was indicted last month on charges that he and two other men embezzled $284,000 from the United Service Workers Local 16, mainly through a health fund administered by Cart’s company, Health Choice Inc.


Cart appeared Friday together with his two co-defendants, Charles Wiener — Cart’s step-father — and Marvin Raphael, both of whom also pled innocent.  A federal magistrate set bail for the three men at $200,000 each and ordered them to surrender their passports and whatever firearms they own.  As a condition of bail, Cart’s movements were limited to New Jersey and southern Florida, where he owns a second home.  Magistrate Judge Mark Falk also laid out a case schedule during the 10-minute hearing. Motions and cross-motions will be heard May 6, and a trial was set to begin May 17.


Cart, 56, and Wiener are charged with conspiracy, mail fraud and money laundering in a scheme that drove the United Service Workers Local 16 to bankruptcy. Raphael is charged with conspiracy to embezzle from the union.  If convicted of money laundering, the most serious charge, Cart faces up to 20 years in federal prison and a $500,000 fine.   


According to court papers, Cart founded Local 16 in 1993 and served as its president for three years before leaving to create Health Choice.  Cart’s politically-connected firm once counted former Gov. Jim Florio among its directors. Several board members bowed out, however, once the federal investigation became known.  Weiner, a former Sussex County resident who now lives in New Port Richey, Fla., succeeded Cart as president in 1999.  He was succeeded in turn by Susan Donato, another former county resident now living in St. Cloud, Fla.  Donato pled guilty last month to conspiring to embezzle money from the health fund and is cooperating with the investigation, federal prosecutors have said.


Cart and Wiener are accused of generating cash from the health fund by fraudulently increasing the per-member fee paid to Health Choice. Allegedly, the excess payments were then diverted to Weiner and another, unnamed member of the Cart family who is not charged with any wrongdoing.  Cart is also charged with creating a bogus consulting position for Raphael, who collected $84,000 from the union between August 2000 and July 2001 for services he never provided. He allegedly kept $7,000 per month while passing $56,000 on to Cart — either directly or through Cart’s Hampton horse farm, Horsearound Stables.


In November 2001, Local 16 — which counted area factory workers, auto mechanics, salespersons and other service employees as members — declared bankruptcy and effectively ceased to exist. Federal prosecutors have said the alleged embezzlement was a direct cause of the union’s demise.


According to Melendy’s lawsuit, she submitted a letter on Jan. 27 to Cart informing him that she was pregnant, that her baby was due in July, and that she would be taking the standard maternity leave as her due date approached.  Cart’s firing of her, and his alleged advice to consider an abortion, came about two weeks later, on Feb. 9, the lawsuit states.  Melendy and her husband are suing Cart and Health Choice for violating the state law against discrimination and intentionally inflicting emotional distress. They are seeking compensatory and punitive damages. [New Jersey Herald, 3/16/05, 3/17/05]