Cape May County authorities allege that Wildwood Mayor Gary DeMarzo and attorney Samuel Lashman used public funds to pay for DeMarzo's defense in a conflict of interest case in 2009 and 2010.
DeMarzo is a former Wildwood police officer who took an unpaid leave of absence from the force after being elected a city commissioner in May 2007.
He became mayor in December 2009. A court subsequently ruled that he had to resign from the police force in order to continue in office.
DeMarzo told The Press of Atlantic City Tuesday that he had done nothing wrong. Lashman's attorney, Joe Grassi, said he hasn't yet seen the indictment, but added that his client's conduct "hardly seems criminal."