Ex-Gambino Associate/Sitting NJ Councilman John Alite Busted In Loan-Sharking Takedown

This isn’t breaking news, we know, but we haven’t exactly been covering any of this stuff for some time—though we are planning to return. And though it looks bad based on some of the facts floating around in the public realm (the AG may have wiretap recordings), we’re reserving our verdict until the end, which is how this process is supposed to work in the USA: "Innocent until proven guilty" is the foundational legal doctrine known as the presumption of innocence. It mandates that the government bears the burden of proving an accused person's guilt. To convict, the prosecution must present evidence establishing every element of the crime beyond a reasonable doubt.

Former Gambino associate/Englishtown councilman John Alite, whom we’ve known and been writing about for over 10 years (do a search, you will see), lent more than $200,000 to two individuals at exorbitant—and illegal—interest rates, then threatened them with violence when they missed payments. So said a New Jersey state prosecutor.

John Alite. (Source: Asbury Park Press.)

Alite, 63, who is facing 10 criminal charges following a probe into an alleged illegal loansharking and extortion scheme, told one of the two borrowers that he could “flip like a switch” into the life of crime that he said he left behind, the prosecutor said at Alite’s bail hearing in Superior Court of Passaic County in late June.

After the nearly three-hour detention hearing, Judge Imre Karaszegi Jr. ruled that Alite would be detained pending trial, citing “escalating dangerous behavior.”

The New Jersey State Police arrested Alite and an associate at his home on June 19 on loansharking, extortion, terroristic threats, and related charges. (See video of more than a dozen heavily armed police dressed in SWAT gear heading to Alite’s house to make the arrest.) 

Stephen Locrotondo, 67, reportedly a friend of Alite's for more than 40 years, was arrested alongside John at Alite's home. He also faces criminal charges following the probe.

Alite's lawyers, Shawn Barnes and Douglas C. Anton, said the state is disseminating a false narrative.

After the hearing Anton told NJ.com, “While we are naturally disappointed by the court’s ruling today, this is merely the first step in a lengthy legal process. Our team is already regrouping to secure our client’s release. We are confident this process will uncover critical exculpatory evidence establishing John’s innocence and ultimately lead to a favorable resolution of this matter.”

Barnes said that, in another call prosecutors have shown, Alite, apparently frustrated that the agreed-upon loan payments were not being made, said, “You tell him, John said the old him would come crack your f---ing head. The new him is going to hire a lawyer, a goddamn lawyer, and send him a legal letter.”

His client is a businessman who sells memorabilia and legally loans people money, among other things, Barnes said. When they fail to pay, Alite hires more lawyers and files legal actions in court, which he did as recently as earlier this year in Monmouth County, Barnes said. He does not resort to violence, and none of the state’s allegations, Barnes and Anton said, show Alite touching anyone with so much as a feather.

Alite hasn’t faced a criminal charge in 15 years — “not so much as a parking ticket.” Barnes said.

The former and admitted mob associate, a onetime lieutenant of John (Junior) Gotti who flipped and testified against the wealthy Gambino scion, is now a civic-minded councilman who focuses on reducing taxes in Englishtown.

“This is not the conduct of a violent individual. This is the conduct of somebody who has grown. And someone who has gone down the right path,” Barnes told NJ.com.

The case is being prosecuted by Deputy Attorney General Heather Hausleben of the Division of Criminal Justice. Hausleben has said the case against Alite began in late 2024, when he agreed to lend the two victims $115,000 over two loans. The first, $50,000, was drawn up with a 7% monthly interest rate, but the way it was structured, it amounted to 84% annually and 125% compounded – way above legal limits.

Deputy Attorney General Heather Hausleben. (Source.)

As per NJ.com, the $115,000 loan was later reduced to $70,000 via payments, but the victims paid $121,000 on the loan without satisfying it. And in June of this year, the $70,000 amount had ballooned to Alite wanting a total payment of $255,000.

One of the victims then borrowed another $150,000 from Alite and Locrotondo and secured the deal with his Florida condominium. When that person fell behind, Alite later assumed ownership by forcing the man to sign over the deed, which he did by forging his cancer-stricken wife’s signature.

Hausleben said Alite is capitalizing on his past violent reputation to intimidate victims of his alleged current crimes.

Locrotondo was arrested alongside Alite and faces charges related to his alleged role as a co-conspirator in the lending operation.

The takedown was a coordinated effort between the Division of Criminal Justice (DCJ) and the New Jersey State Police Official Corruption North Unit. Top officials emphasized their commitment to protecting the public from financial exploitation.

“Our office is dedicated to ensuring that all businesses conduct themselves fairly and lawfully. The conduct alleged in this case was anything but, and we will work to hold those who cheat and steal accountable.”