Former state Assemblyman Robert Schroeder's trial was scheduled to begin Tuesday, Oct. 11 Watch video
SOMERVILLE -- Former Republican Assemblyman Robert Schroeder has pleaded guilty to charges 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.
Schroeder entered his plea Friday in Somerset County Superior Court, just days before his trial was set to begin.
He pleaded guilty to a charge of second-degree misconduct by a corporate official.
He also entered a guilty plea to 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 will be dismissed as part of the plea deal, but his attorney, John Whipple, said the misconduct charge encompasses all the counts in the indictment.
Schroeder will be required to pay back the more than $5.3 million he stole from his victims and be barred from holding public office or public employment in New Jersey.
Judge Robert B. Reed set sentencing for Dec. 22. The state will recommend that he be sentenced to eight years in state prison, but Whipple said he would seek a lesser sentence.
Schroeder was first elected to the Assembly in 2010 and served two terms representing the 39th Legislative District, which includes parts of Bergen and Passaic counties. He served as the body's deputy Republican whip.
"It's a sad day when an elected member of our legislature pleads guilty to a felony," said Attorney General Christopher Porrino, who was in the courtroom Friday. "He was elected by the people and was entrusted by the people and he engaged in a serious fraud here, so it's a sad day."
Schroeder, 56, of Washington Township, Bergen County, was accused of writing at least 47 bad checks totaling $3.4 million to 12 individuals who loaned him money for various business ventures and two companies that provided him with goods or services, even though he knew that he did not have the funds to cover the checks.
He was also accused of stealing nearly $1.9 million from at least five individuals who loaned him money for a business venture meant to provide housing for an oil-drilling project in North Dakota.
Prosecutors say he then used those funds for personal expenses and other debts not associated with the project.
Schroeder's trial had been scheduled to begin on Tuesday with jury selection before the plea deal was reached. Until now, he had maintained his innocence in the case.
"Mr. Schroeder is glad to put this matter behind him after three-and-a-half years of litigation," Whipple said after the hearing. "It was determined that while there were many defenses and lots of things to talk about at trial, it was unlikely that we would be able to win the entire case.
"He decided that in the best interest of his family, it was wise at this time to put this matter behind him."
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.
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.
Cristina Rojas may be reached at crojas@njadvancemedia.com. Follow her on Twitter @CristinaRojasTT. Find NJ.com on Facebook.