By CBS3 Staff


CAMDEN, N.J. (CBS) — Atlantic City Mayor Frank Gilliam pleaded guilty in Camden federal court on Thursday to wire fraud for stealing over $87,000 in donations from a youth nonprofit basketball club he formed and using it for personal expenses. A source tells CBS3 Gilliam resigned as mayor late Thursday afternoon.

“It is with a heavy heart that I tender my resignation as the Mayor of the City of Atlantic City, effective immediately,” Gilliam said in a letter obtained by CBS3 through a source. “I would like to apologize to the residents of the great City of Atlantic City who deserve stability and respect. My sincere apologies to each constituent that voted for me and had high hopes in my tenure.”

He could face a maximum sentence of 20 years in prison and a $250,000 fine.

Gilliam has agreed to pay back the $87,215 he stole from the AC Starz Basketball Club that he started in 2011.

“Mr. Gilliam, who is a lifelong resident of Atlantic City, has admitted his wrongful conduct, is accepting responsibility for his actions and is genuinely remorseful.  Moreover, Mr. Gilliam has started paying restitution, making a voluntary payment today in connection with his plea. To date, and in advance of sentencing, Mr. Gilliam has paid back almost half of the restitution amount that the parties have agreed is owed,” the mayor’s attorney, Harry Rimm, said in a statement.

U.S. Attorney Craig Carpenito says Gilliam solicited donations, while serving as an Atlantic City councilman and then mayor, for the basketball club under the false pretense that contributions were for the team or school supplies for underprivileged children. Instead, the mayor used the money on luxury clothing, expensive meals and trips.

“Mayor Gilliam took advantage of his victims’ desire to assist underprivileged children by falsely representing that the money contributed to the AC Starz Basketball Club would go to pay for school supplies or to support youth basketball,” Carpenito said in a statement. “Instead, he spent the money on himself. When a public official like Gilliam abuses either a public or a private trust to commit a fraud, this Office and our agency partners will investigate and prosecute that official. The people of New Jersey are entitled to better.”

Gilliam sent some money transactions from Atlantic City to Philadelphia in September 2014, which is part of the basis for the wire fraud charge.

New Jersey Gov. Phil Murphy called on Gilliam to resign after pleading guilty.

“The charge to which Mayor Gilliam pleaded guilty today is, in a word, despicable. He has squandered the trust and confidence of his community and of this administration to lead that community. He must resign,” Murphy said.

New Jersey state law requires public officials to leave office if they’re convicted or plead guilty to crimes involving dishonesty.

New Jersey Attorney General Gurbir Grewal filed papers in state court to seek Gilliam’s removal as mayor.

Atlantic City Council President Marty Small will be sworn in as mayor on Friday.

“As of this conversation, I’m the City Council president and I’m proceeding along as the City Council president, but if an opportunity becomes available where I have to serve the citizens of Atlantic City as mayor, I’ll do the absolute best job as I can and I’m more than ready to take up the challenge,” Small said.

Federal authorities raided the mayor’s home in December, seizing over $41,000. Federal authorities also removed cardboard boxes and computer equipment from the home.

Credit: CBS3

Neighbors, at the time, were left in shock.

“I wasn’t expecting this at eight o’clock this morning. I woke up and opened my window and I’m like, ‘Oh my goodness.’ I see so many police cars, so many FBI cars,” said Nia Wright.

In May, Gilliam was cleared of criminal charges stemming from a fight outside the Golden Nugget Casino last November. Gilliam was caught on camera involved in a brawl with several people.

Gilliam’s bail was set at $100,000 unsecured bond. His sentencing is scheduled for Jan. 7, 2020.