State Attorney General Eric Schneiderman (D – Manhattan) has issued a multi-count indictment against Lawrence Rosenbaum, 64, of Albany, accusing him with fraudulently soliciting more than $1 million from a number of investors to advance the production of kosher and halal cheese in upstate New York.
Rosenbaum was also planning on developing alternative bio-energy companies from the waste produced by cows in the cheese and milk facilities.
Rosenbaum is accused of luring investors, many of whom he had established relationships with over his decades-long career as an insurance broker, and then diverting their monies for his own personal use.
The indictment only lists five individuals and one corporate entity, totaling investments of $76,250, not the $1 million alleged in the news release. As we went to press the attorney general’s office had not responded to a request for an explanation of the discrepancy.
Prosecutors also allege that Rosenbaum failed to file New York state personal income tax returns since at least 2008, thereby evading taxes on the money he diverted to himself over the six-year scheme.
“Investors should be able to trust that their hard-earned money is being is properly managed and is not being pocketed for personal use,” said Schneiderman in a prepared statement. “My office takes allegations of securities fraud seriously and we will continue to advocate for victims and hold fraudsters accountable.”
Rosenbaum has been remanded to the Albany County Jail in lieu of $250,000 bail. In a jailhouse interview, Rosenbaum told The Jewish Press he’s known for the past three years that prosecutors were investigating his business dealings. During that time Rosenbaum says he stepped up efforts to produce kosher and halal cheese in various factories across the country. He changed the name of his company from the Saratoga Cheese Corporation to Rosenbaum Cheese Company a few years ago.
“Now is the time to introduce other gourmet cheeses, made CY [chalav Yisrael] and command the same normal gourmet market cheese prices,” Rosenbaum had declared to investors. “We are currently at Stage 1 and have produced our first test run of 600 pounds of gourmet goat feta cheese. It will be packaged by November 21, 2015. We are also prepared to produce some English style gourmet cheeses as CY, such as Cheshire, Double Gloucester, and Abergele in Wisconsin. We are also formulating our distinctive CY Chedam Cheese 108 slices, to compete against the 108 slices CY American Processed Cheese.”
Rosenbaum also claims he can use by-products from the cheeses for kosher for Passover alcohol with the highest of rabbinic certifications.
“Projected profit from the first three million pounds of cheese production is expected to be $1million from cheese sales and $1 million from the sale of the whey by-products; whey protein concentrate, and permeate. Because our whey is chalav Yisrael, it has very special value. The permeate will be sold to a separate company on premises, which will distill the permeate into potable non-grain alcohol, kosher for Passover, exported to Israel, for the Passover season.”
Rosenbaum had been networking his business in various circles and since the probe by the attorney general commenced he has been to at least two KosherFest business-to-business trade shows, the shluchim convention in Crown Heights, and the Islamic Center in Rockaway, New Jersey.
At least one investor contacted by The Jewish Press is standing by Rosenbaum and says having him in prison because he cannot make the high bail only hurts the progress Rosenbaum was making developing the business. Chaim Schaffer, a real estate agent and part-time actor in Albany, says he spent several hours earlier this year speaking to prosecutors from the attorney general’s office.Marc Gronich