A.G. SCHNEIDERMAN ANNOUNCES SENTENCING OF ALBANY INSURANCE BROKER IN $1M SECURITIES FRAUD SCHEME
Lawrence D. Rosenbaum, Chairman Of Saratoga Cheese Corporation, Sentenced To Up To 9 Years In State Prison; Signs Over $1 Million In Civil Judgments To Compensate Victims
Schneiderman: My Office Will Continue Working To Root Out And Prosecute Fraud And Hold Those Responsible Accountable
ALBANY COUNTY – Attorney General Eric T. Schneiderman announced today that Lawrence D. Rosenbaum, 65, of Albany, was sentenced today on multiple crimes in connection with a sweeping indictment charging him with fraudulently soliciting over $1 million from numerous investors in a securities fraud scheme between 2006 and 2012.
Rosenbaum, who previously pleaded guilty to charges including Grand Larceny and Securities Fraud, was sentenced to three to nine years in state prison, and he executed over $1,000,000 in judgments in favor of his victims, including individual investors and the New York State Tax Department, to cover restitution for his crimes.
“Exploiting hardworking New Yorkers for personal financial gain is reprehensible,” said Attorney General Schneiderman. “My office will continue fighting to root out securities fraud and fully prosecute those responsible for it.”
Rosenbaum is an insurance broker who owned and operated Rosenbaum Financial Services in Albany for decades. In approximately 2001, Rosenbaum formed a limited liability company, Saratoga Cheese Company LLC, which he claimed would develop a halal and kosher cheese plant in the Capital Region, using local dairy products and a cheese coagulator that he had learned about when he was an exchange student in Germany decades earlier. In 2006, Rosenbaum reformed this entity as Saratoga Cheese Corporation, with the stated purpose of developing a cheese manufacturing facility in Cayuga County.
According to prosecutors, Rosenbaum created additional related entities, including Saratoga Milk Corporation, which he claimed would oversee the milk production for his cheese facility, and Saratoga Bio Gas Corporation and Bioenergies of the Americas, which he claimed would develop alternative energy uses for the waste produced by cows in the cheese and milk facilities.
Also according to prosecutors, between April 2006 and October 2012, Rosenbaum solicited over $1 million in private investments in Saratoga Cheese Corporation and its related entities by promising investors substantial returns and shares of stock in his corporations. Rosenbaum then used his various corporate entities as personal bank accounts, diverting over $600,000 to himself by writing checks payable to himself, transferring funds to other accounts, and making numerous cash withdrawals, including withdrawals in both the Albany area and in Costa Rica. According to prosecutors, some of the stolen money was used to travel to and from Costa Rica, where for years he paid for a $1,000-per-month apartment for a girlfriend he had there. None of the production or processing facilities for which Rosenbaum solicited funds were ever built.
In June 2016, Rosenbaum was arraigned on a 27-count indictment Albany County Supreme Court, charging him with one count of Grand Larceny in the Second Degree (a class C felony), eight counts of Grand Larceny in the Third Degree (a class D felony), ten counts of Securities Fraud under the Martin Act (a class E felony), one count of Scheme to Defraud in the First Degree (a class E felony), five counts of Repeated Failure to File Personal Income Tax Returns under the New York Tax Law.
On January 5, 2017, Rosenbaum pleaded guilty before Hon. Roger D. McDonough, Albany County Supreme Court, to the crimes of Grand Larceny in the Second Degree, (a class C felony), Securities Fraud under the Martin Act (a class E felony), and Repeated Failure to File Personal Income Tax Returns under the New York Tax Law (a class E felony), admitting not only that he stole money from investors but that he failed to file New York State income tax returns, thereby evading taxes on the money he diverted to himself through his securities fraud scheme.
The criminal case against Rosenbaum was handled by Assistant Attorneys General Benjamin S. Clark and Philip V. Apruzzese of the Criminal Enforcement and Financial Crimes Bureau. The Criminal Enforcement and Financial Crimes Bureau is led by Acting Bureau Chief Stephanie J. Swenton.
The Attorney General’s investigation was conducted by Investigator Dennis Churns under the supervision of Deputy Chief Antoine Karam. Forensic accounting was performed by Meaghan Scovello. The Investigations Bureau is led by Chief Dominick Zarrella. The Forensic Audit Section is led by Chief Auditor Edward J. Keegan.