TINA MARKOE KINSLOW/Courier-Post Camden Mayor Milton Milan walks along Cooper Street toward the U.S. Courthouse on Thursday where he is on trial on corruption charges. He will not testify in his defense.

Rivera links Milan loans to drug funds

By CLINT RILEYand FRANK KUMMER
Courier-Post Staff
CAMDEN

Convicted drug dealer Jose "JR" Rivera testified Thursday that he loaned Milton Milan $115,000 from drug profits in the early 1990s, money intended mostly to help Milan finance projects for his construction companies.

Rivera, who acted as banker and money launderer for two of the city's biggest drug operations, also insisted Milan had to know that five cash loans between 1992 and 1994 came from drug money.

The loans were made before Milan was elected to public office, first as a councilman for East Camden in 1995, then as mayor in 1997.

Assistant U.S. Attorney Renee Bumb spent much of the 15th day in Milan's corruption trial establishing that Rivera was well known in East Camden as a drug-trade financier.

Dressed in khakis and plaid shirt, Rivera was flanked at all times by a federal marshal while testifying.

From the witness stand, the 40-year-old former entrepreneur from Cherry Hill told jurors that Milan came into the back office of his JR's Custom Auto Parts in East Camden in November 1994 looking for money for Atlas Contracting, the mayor's former construction firm.

Following negotiations for the loan, Rivera said, he opened a safe in a closet that routinely held between $250, 000 and $400,000 for area drug dealers.

He emerged with $65,000 bundled in small bills. Milan sat less than three feet away, Rivera recalled.

"I opened it, took the cash and gave it to him in a bag," said Rivera, who was known to keep a handgun atop his desk as an intimidating sign of his power.

Rivera, who faces up to life in prison, was convicted by a jury in February of money laundering and conspiring to to distribute large amounts of cocaine after one of the city's biggest drug trials.

In that trial, five drug dealers - called to testify for the government against Rivera - said Milan had been a mid- level drug dealer in Camden. Prosecutors have not been allowed to introduce that testimony at Milan's trial.

Prosecutors are expected to rest their case today. Milan's lead attorney, Carlos A. Martir Jr., said he plans to begin and end Milan's defense today.

Milan said he will not testify in his own defense.

"It's the government's burden, not ours," Milan said following court. "I feel confident with the fact they did not do the job."

On Thursday, Martir quickly sought on cross-examination to undermine Rivera's testimony about his relationship with Milan. Martir argued that while Rivera is now a convicted drug dealer, he was not one when Milan borrowed from him.

Rather, Martir portrayed Milan as believing he was dealing with a successful auto parts store owner. Rivera's shop grossed up to $1 million a year, Martir noted for jurors.

That set up pointed - and ironic - exchanges between Rivera and Martir.

During the drug trial earlier this year, Martir sat alongside Rivera as attorney for co-defendant Luis "Tun Tun" Figueroa, who was also convicted as a member of a drug syndicate that government prosecutors called "The Organization."

Rivera sought to persuade jurors that many people knew he was active in the drug trade from his auto parts store, though he did not personally sell drugs. Martir sought to convince them otherwise.

"You didn't really put up a big sign outside that said, ` JR, the former drug dealer' did you?" Martir asked.

"I didn't really have to," Rivera shot back.

Martir told jurors that although Rivera's auto-parts store was seized after his conviction, federal authorities have allowed it to remain open with seven employees because they recognized its legitimacy as an area business.

Rivera, once a small-time dealer, rose to become a power broker on Camden's streets. He said he sold cocaine from 1982 to 1984 at McGuire Gardens public housing project, but maintained he has not directly sold drugs since.

He opened a small auto parts store in Pennsauken in 1995 and was its sole employee. He moved the store to Carman Street in East Camden in 1988 and proved successful at both auto parts sales and behind-the-scenes financing of local drug dealers.

As an example, Rivera said he would sell luxury or specially equipped cars to drug dealers who would pay him up to $10,000 more than the vehicles were worth in cash. The dealers, Rivera said, were afraid to pay cash at regular car dealerships for fear of tipping authorities or because they had no credit.

He said that during the 1990s, he bought and sold at least 150 cars for drug dealers. He also held their cash in his office safe and charged them fees, like an underground bank.

Rivera testified he kept five guns, ranging from automatic assault pistols to revolvers and showed them to Milan.

"I trusted him," Rivera said of Milan, one of the few people allowed into his back office.

He said he and Milan became close friends in 1990 after Rivera hired Santiago & Milan Construction to build an addition to JR's Custom Auto Parts. Milan was president of the construction firm. Four-time felon Frankie "Smurf" Santiago was vice president.

Rivera hired Milan again in 1992 to build a car alarm installation center and car wash near his auto parts store. He said he rented the business to Lucas Torres, a drug dealer.

Milan visited his store at least two times a week after that, Rivera said.

"At times, people thought he was my bodyguard," Rivera said of Milan, an ex-Marine.

Much of his testimony was supported by promissory notes signed by Rivera and Milan. Rivera had hidden the notes behind a file cabinet in his office, but turned them over to prosecutors after his conviction.

The promissory notes from 1992, 1993 and 1994 showed that Milan borrowed amounts of $2,500, $1,000, $20,000 and $65, 000. An internal ledger seized from Rivera's office reflected a separate $26,500 loan that Rivera could not recall.

Martir acknowledged the mayor had borrowed the money, but said he did not know it came from drug sales.

The government has used the $65,000 loan to Atlas as key to a money laundering charge against Milan. Recently, Milan' s partner in Atlas Contracting, Gholam "Joseph" Darakhshan, testified that the two broke the loan down into increments of less than $10,000 to avoid IRS detection when the money was deposited in banks. They had family and friends write checks helping to make the deposits into four banks. They then channeled the deposits back to Atlas. At least two of the checks were deposited in Rivera's business account.

The government wrapped up its case Thursday by calling a former paid intern at City Hall to testify. Wilfredo Ramirez, a senior at Rutgers-Camden, said he got the job at the city clerk's office from March 1996 to July 1996 by calling on the mayor, a friend from his neighborhood.

Milan is accused in one of the 19 charges against him of staging a burglary at Atlas Contracting in December 1995.

A false insurance claim said thieves had taken office equipment that included two Gateway 2000 computers.

Milan sold Ramirez one of the computers for $1,500.

"He told me he had a computer he was willing to sell. It looked like it was a good computer," said Ramirez.

FBI agents later confiscated the computer from Ramirez and found the serial number matched that of one reported from Atlas Contracting. A Gateway representative told investigators under oath that the computer was worth $500 at the time.

FBI agents reimbursed Ramirez $1,500 for his loss. Ramirez said he used the money to buy a new computer for school.