Investigations and federal charges In 2005, a
New Jersey Open Public Records Act (OPRA) request was submitted asking that James hand over a
City Hall-issued
debit card he had received in 2002. The OPRA request showed that James had spent over $70,000 with the card for personal expenses over a two-year period. In August 2006, an OPRA request further revealed that James had spent over $80,000 with a credit card provided by the
Newark Police Department for several vacations, including a $6,500 vacation to
Rio de Janeiro in June of that year. In a response, James claimed no wrongdoing, and explained that, "as the last of the civil rights mayors in America, I had to travel and sell this city and the world about the Newark success story". In March 2007, federal investigators subpoenaed documents between James and Tamika Riley, his mistress and a former store operator, under accusations that James rigged the sale of city lots to Riley, who quickly resold them for hundreds of thousands of dollars in profit. The U.S. Attorney's office launched a separate investigation into these allegations later in June. On July 12, James was indicted by a federal
grand jury on 33 federal charges, namely
mail fraud and conspiracy. Later, he further alleged that James had also misused city-issued credit cards for himself and eight women during out-of-state vacations between 2001 and 2006.
Trial and conviction On February 26, 2008, James's trial was opened. His lawyers maintained that James had not violated federal law. In the first week, prosecutors presented a video tape of James testifying about Senate Bill 967, which was legislation he sponsored in 2004 to amend the
Faulkner Act, with them alleging that James urged the passage of the bill so he could increase his power and illegally benefit himself. The defense counter-argued that James was acting properly in his capacity as a senator and should have enjoyed immunity. On March 5, prosecutors presented more than a dozen memos from James regarding the land deals, which revealed that he had been monitoring whether city developers he was acquainted with were getting a chance to buy the lots. To prove this, prosecutors called up James's longtime secretary Rose Marie Posella, who testified that James met routinely with developers in his
Newark City Hall office. She also testified that Tamika Riley had privileged access to James and that City Hall officials were aware they were having an affair. Judge
Bill Martini sentenced James to 27 months in prison despite prosecutors originally recommending a 15-to-20-year sentence. The jury began deliberations on April 8 On July 23, Judge
Bill Martini upheld the convictions, and on July 29, James was sentenced to 27 months in prison and was ordered to pay a $100,000 fine. Originally, prosecutors urged for a 15-to-20–year sentence for James, but Martini argued that James's years as a public servant played a role in the more lenient sentence. Tamika Riley was also found guilty on those five counts and eight others, including tax evasion. In September 2008, the
Federal Bureau of Prisons denied James's request to serve his sentence at a federal prison in
Fort Dix and instead reported him to
FCI Petersburg in
Virginia.
Release from prison and lawsuits In June 2009, James's attorney Alan Bowman attempted to convince an
appellate court to expunge the convictions, but his efforts failed. On April 6, 2010, James was granted early release after 18 months served. As per a court order, he was banned from running for elected office for the remainder of his career. Seven days after his release, James filed an appeal to reverse his convictions. In September 2010, one of his convictions was overturned, but the four remaining convictions were left unchanged. He further appealed seeking to overturn the convictions due to a juror being dishonest. That appeal was dismissed in February 2013. In 2011, the
New Jersey Election Law Enforcement Commission filed a lawsuit against James alleging that he and his campaign treasurer, Cheryl Johnson, improperly used about $94,000 in campaign funds to pay for legal fees. On August 17, 2012, the
New Jersey Superior Court ruled in favor of the commission and ordered that both James and Johnson had to pay the money back. In January 2015, a state appeals court struck down an appeal by James and upheld the higher court's ruling. == Post-conviction career ==