AG: Albany broker bilked investors, filed false claim after son’s suicide
January 11, 2017
As published by the TimesUnion on January 10, 2017.
A longtime Albany insurance broker has pleaded guilty to bilking investors of his cheese company out of more than $1 million, while his wife admitted to filing a false claim after their son’s suicide last spring.
Attorney General Eric Schneiderman on Tuesday announced the conviction of Lawrence D. Rosenbaum, 65, who pleaded guilty to grand larceny, securities fraud and tax fraud for 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 and Costa Rica. Rosenbaum agreed to pay nearly $1 million in judgments to his victims, and he’ll be sentenced to three to nine years in state prison.
In June, the attorney general’s office said Rosenbaum, owner of Rosenbaum Financial Services, duped investors — some of whom he had known for decades — into believing their money was going toward the development of cheese and bio-energy companies he said would provide services in the state and Costa Rica. He also promised the investors substantial returns and shares of stock.
None of the facilities were ever built. Instead, the attorney general’s office alleged, Rosenbaum used various corporate entities as personal bank accounts and appropriated more than $600,000 by writing checks payable to himself. Some of the money was spent on a $1,000-per-month apartment for a girlfriend of Rosenbaum’s in Costa Rica, prosecutors alleged.
After Rosenbaum’s arrest on the securities fraud indictment, the Attorney General’s office uncovered evidence of a separate life insurance fraud scheme committed by Rosenbaum and his wife, Thomasine Henderson, involving the submission of false claims after the shocking suicide of their son, Andrew Rosenbaum. The 26-year-old intentionally stepped in front of a tractor-trailer on I-87 on May 8 of last year.
Two days after the suicide, Rosenbaum allegedly called Transamerica Insurance Corporation — where he had learned his son had insurance policies — and pretended he was Andrew Rosenbaum to inquire whether being “hit by a truck” would be covered if it were deemed to be an accident, prosecutors said.
“The couple then allegedly concealed material information related to their son’s death from the insurance company to wrongfully obtain over $12,000 in life insurance payments and attempt to obtain an additional $50,000 in insurance payments,” according to a release from Schneiderman’s office.
Henderson, 66, pleaded guilty to insurance fraud in the fifth degree and falsifying business records in the second degree (both misdemeanors). She’ll receive three years’ probation.
“Exploiting others for personal financial gain is reprehensible, and for a parent to exploit the death of their child for the same reason is unthinkable,” Schneiderman said in a statement.
Rosenbaum resigned from the Albany County Independence Party leadership in October 2004, shortly after the Times Union reported that more than $30,000 of the $106,500 the party raised over a five-year period went directly to him — and that he received $15,656 for “travel and entertainment.”
Rosenbaum’s attorney could not be reached for comment on Tuesday evening.