UPDATED: 7:15 p.m.
Gilliam’s plea in front of federal Judge Joseph Rodriguez shows he took $87,000 from the AC Starz, a youth basketball league he was associated with. Gilliam used an ATM card to tap a bank account for personal expenses, like expensive clothes and trips, from 2013 to 2018.
He was elected mayor in 2017 after serving as a city councilman.
"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," U.S. Attorney Craig Carpenito said in a press release. "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's attorney, Harry Rimm, also issued a statement saying, "It should be noted that Mr. Gilliam was charged as a private citizen; the charge and his plea are unrelated to his official role and at no time has he been charged with taking any public or taxpayer funds.
"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."
But at a press conference in Trenton Thursday afternoon, New Jersey Gov. Phil Murphy said Gilliam's actions were "despicable" and called for him to resign.
Murphy said the 49-year-old mayor "squandered the trust and confidence of his community and of his administration."
FBI agents carried off numerous cardboard boxes and computer equipment during a raid of the mayor's home on Dec. 3, but they remained silent about why they were there and what they had taken away. Federal investigators later said they seized $41,000 from his home.
He was released after posting a $100,000 bond with the court.
New Jersey state law mandates Gilliam resign as a result of his plea. Calls quickly mounted for him to step down. By late afternoon, New Jersey Attorney General Gurbir Grewal filed papers in Mercer County Superior Court seeking the mayor’s removal from office.
But just before city offices closed, Gilliam submitted a brief letter of resignation in which he apologized “to the residents of the great City of Atlantic City who deserve stability and respect.”
Sentencing is set for Jan. 7. He could receive up to 20 years in prison, though sentencing guidelines suggest he would get far less. He also agreed to make restitution for the fraud.
Atlantic City remains under state supervision due to its chronic budgeting and other problems.
As recently as 2007, four of the city's last eight mayors had been arrested on corruption charges and one-third of the nine-member City Council was either in prison or under house arrest.
The move puts City Council President Marty Small in line to succeed Gilliam. Swearing in ceremonies are set for Friday.