Witness: Break-in Milan's idea

By RENEE WINKLERand CLINT RILEY
Courier-Post staff
CAMDEN

A former business partner testified Tuesday that Camden Mayor Milton Milan told him an auto parts dealer from whom they borrowed $65,000 in cash was also a drug dealer.

The mayor's former partner, Gholam H. ``Joseph'' Darakhshan, also admitted on the witness stand that, at Milan's suggestion in December 1994, he staged a break-in, removed two leased computers and a copy machine from their defunct Camden business, Atlas Contracting Inc., and reported the equipment stolen to an insurance company. The copier and a computer were given to Milan, he said.

The staged break-in occurred on the eve of Milan's swearing-in as a Camden city councilman on Jan. 1, 1996. The computer Milan received from the staged burglary eventually was placed in his City Council office, Darakhshan testified during nearly three hours of questioning by a federal prosecutor.

``Are you crazy? You can't bring the computer in here, it' s stolen,'' Darakhshan testified he said when he walked into Milan's City Council office in early 1996 and saw the computer.

Darakhshan, of Mount Laurel, said Milan responded by telling him to ``keep it down'' because a secretary might hear him.

A $65,000 loan Milan and Darakhshan took from convicted East Camden drug lord Jose ``JR'' Rivera and insurance money Atlas Contracting collected from the reported theft of its office equipment were the focus of federal prosecutors' questioning during the second day of testimony in the mayor's federal corruption trial.

Federal prosecutors are trying to establish that Milan knew that the source of the $65,000 he and Darakhshan borrowed from Rivera was illegal drug profits. Laundering drug money is one of the charges against Milan in a sweeping 19-count indictment. He also is accused of accepting payoffs from organized crime figures and vendors interested in obtaining city contracts, extorting a bribe from a city official, and staging the break-in at Atlas' office to collect insurance money.

Milan, 38, has pleaded innocent to all charges - which he calls politically motivated.

Carlos A. Martir Jr., the mayor's lead defense attorney, is scheduled to begin cross-examining Darakhshan today. Martir is expected to try to show that Darakhshan, not Milan, is responsible for the insurance fraud and for laundering cash provided to Atlas from Rivera.

On Monday and early Tuesday, Assistant U.S. Attorney Renee Bumb presented testimony that Darakhshan, Milan and several of their family and friends made a series of deposits, all less than the $10,000 amounts which must be reported to the Internal Revenue Service, into four banks and channeled the deposits back to Atlas. At least two of the checks were deposited in Rivera's business account.

Darakhshan testified the cash transactions were meant to conceal the payment and repayment of the $65,000 loan from Rivera, a boyhood friend of Milan.

Darakhshan said they turned to Rivera at Milan's suggestion after their company was cut off from payment for work in progress at a small East Camden housing project, known as Arthur's Court, when they failed to provide a performance bond.

The Arthur's Court project, valued by Darakhshan at `` close to $1 million,'' was one of the last projects carried out by Atlas.

Rivera had access to large amounts of cash, and he saw it, Darakhshan said - in piles five or six inches high and up to two feet long - in a back office at JR's Auto Parts, an East Camden business that reportedly grossed annual sales of $1 million.

Rivera's first offer - $16,000 in upfront interest for a $65,000 loan - was not acceptable to Darakhshan, an Iranian immigrant who formed Atlas Contracting Inc. with Milan in 1992.

``I really flipped,'' Darakhshan told a jury hearing testimony in the ongoing federal corruption trial of Milan, now Camden's mayor.

Milan reopened negotiation and Rivera agreed to a $10, 000 premium on the loan, but all transactions would have to be in cash. Atlas still had to pay the interest in advance, ``because he wanted to know we were man enough,'' Darakhshan said.

Darakhshan, who testified he never spoke to Rivera about the loan and never saw the money change hands, said he `` knew in his heart'' the money was the proceeds of drug deals.

In April, Darakhshan, a trained engineer, pleaded guilty to mail fraud and conspiracy to structure money transactions. His testimony against Milan is a condition of the guilty plea. His sentencing has been postponed until the trial ends.

Called ``The Russian'' by Rivera and considered an outsider, Darakhshan said he had access to Rivera's office only when in Milan's company.

``I wasn't trusted. No one knew me. I wasn't part of their circle,'' he said.

But when allowed inside the back office he saw a safe, money counting machines and guns.

Martir initially objected to Darakhshan's testimony about his beliefs on Rivera's connection to Camden's illicit drug business. He later withdrew his objections to all comments except those about Rivera's reputation.

Asked directly by Bumb what Milan told him about Rivera, Darakhshan responded, ``That he's a drug dealer.''

Rivera, who also is expected to testify against Milan as the trial moves forward, was convicted Feb. 29 of conspiring to sell large amounts of cocaine over almost a decade.

Darakhshan said his curiosity drove him to ask Milan to identify people who frequented Rivera's back office - men wearing lots of jewelry, street clothes like jeans and hooded sweat shirts, and driving fancy cars.

Milan told his partner about the connection between many of them and the city's notoriety as a source of illegal drugs.

Atlas dissolved after Milan's selection as council president in early 1996. The first job they worked on, he said, was construction of an auto-installation facility and car wash for Rivera, near his parts store in the 2600 block of Carman Street in East Camden. Darakhshan said Rivera paid Atlas $5,000 to supervise that project, keeping subcontractors to their schedule without doing any actual construction work.