An insurance broker has been sentenced to up to nine years in prison on multiple crimes involving a $1 million fraud scheme, New York Attorney General Eric Schneiderman announced on Thursday.
Last January, Lawrence Rosenbaum pleaded guilty to Grand Larceny, Securities Fraud and Tax Fraud for fraudulently soliciting hundreds of thousands of dollars from investors for kosher and halal cheese factories in upstate New York and bio-energy companies in New York State and Costa Rica.
As part of his plea, Rosenbaum agreed to execute nearly $1 million in judgments in favor of his victims, apart from incarceration of three to nine years. He is an insurance broker who owned and operated Rosenbaum Financial Services in Albany, New York, for decades, according to the prosecution.
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In 2001, he formed the Saratoga Cheese Company, which he claimed would develop a halal and kosher cheese plant in the Capital Region.
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, said prosecutors.
He then used his various corporate entities as personal bank accounts, diverting over $600,000 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.
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, according to prosecutors.
“Exploiting hardworking New Yorkers for personal financial gain is reprehensible,” said Schneiderman. “My office will continue fighting to root out securities fraud and fully prosecute those responsible for it.”
