By Derek Kravitz
Washington Post Staff Writer

An Interior Department official caught taking bribes in exchange for arranging meetings between insurance brokers and government officials was swept up in an FBI corruption probe that began in a struggling New Jersey shore community near Atlantic City.

Federal investigators have told The Post that the New Jersey-based insurance brokerage firm that paid 60-year-old Edgar A. Johnson $15,000 in kickbacks in 2006 and 2007 was a fake company -- part of a far-reaching FBI sting operation, dubbed Operation Broken Boards.

Johnson, of Bowie, Md., pleaded guilty last month to one count of honest services fraud and is scheduled to be sentenced April 10. He faces 12 to 18 months in prison under federal sentencing guidelines.

The ongoing federal corruption probe began more than two years ago in the Atlantic County city of Pleasantville, said Gregory Reinert, a spokesman for the U.S. Attorney's office in Trenton, N.J.

Authorities were eager to clamp down on pay-to-play schemes running rampant in many of New Jersey's suburban communities. In particular, they had focused on Craig Callaway, a power-hungry Atlantic City council president who had several siblings in government positions throughout the state.

The FBI set up an undercover insurance brokerage firm that included undercover agents and two cooperating witnesses.

Callaway ran a seemingly ruthless political machine amid the boardwalks and lavish casinos of the coastal city. Authorities nabbed him after he accepted a bribe from one of the agents.

And while he awaited sentencing, Callaway then attempted to blackmail a political rival by setting up a video camera to record an arranged tryst with a prostitute in a seedy motel.

The political opponent, a Baptist minister, contacted authorities and Callaway was flipped into a wire-wearing informant.

The city council president, along with other cooperating witnesses, were then used to arrange bribes with other government officials, all the while using the fake companies as front operations.

By 2007, more than a dozen New Jersey public officials had been caught with their hands in the proverbial cookie jar, collecting cash payments between $1,500 to $17,500 in exchange for their political pull (list of defendants).

At the time, prosecutors said they were shocked by the "brazen greed and callous disregard" for their public offices, even in the often-corrupt political culture of New Jersey.

"This pattern of corruption infects every level of government - from the local school board to the highest levels of state government," said New Jersey U.S. Attorney Christopher J. Christie.

The federal probe resulted in 11 corruption convictions of New Jersey politicians, including two mayors, two members of the state assembly and five current and former school board members.

In Washington, Johnson was approached by a former college fraternity brother in December 2006, who offered to pay him for negotiating meet-and-greets between the fake insurance firm and officials in the U.S. Virgin Islands, where Johnson once worked, according to court documents (PDF of plea agreement).

The FBI informant, who secretly taped his meetings with Johnson, is not named in the documents. Johnson attended Morgan State College (now Morgan State University) in Baltimore and was a member of the Iota Phi Theta fraternity.

Two New Jersey businessmen, insurance broker John D'Angelo and roofing company owner Bruce Begg, were brought in by federal agents as cooperating witnesses, according to public records, sources close to the investigation and published reports.

Reinert and Timothy G. Lynch, assistant U.S. Attorney in Washington, both declined to comment on whether there are any additional suspects under investigation.