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Three Hudson Valley developers accused of conspiring to take control of Sullivan County village

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Bloomingburg is a bucolic gateway to the Catskills in Sullivan County, but beneath the surface, according to the U.S. Attorney’s office, a cynical scheme was hatched by developers to take over the local government in the hope of transforming the Sullivan County village into a Hasidic Jewish enclave and making hundreds of millions of dollars.

Three real estate developers were arrested on Dec. 15 and charged in U.S. District Court in White Plains with conspiracy to corrupt the electoral process.

Shalom Lamm, 57, of Bloomingburg; Kenneth Nakdimen, 64, of Monsey, and Volvy “Zev” Smilowitz, 28, of Monroe, are accused of recruiting outsiders to vote in the village so that they could build the Chestnut Ridge townhouse community unimpeded by public opposition or government oversight. All three pleaded not guilty at their initial appearance in federal court. Bail was set at $200,000 each.

The criminal case mirrors a lawsuit filed last year by Bloomingburg and Mamakating, a town that encompasses the village. The municipalities accused Lamm, Nakdimen and associates of racketeering, fraud, bribery, intimidation and voter fraud. U.S. District Court Judge Katherine Forrest dismissed the case for failure to establish a racketeering claim and for filing too late under the statute of limitations.

The criminal case also follows a 2014 lawsuit by Chestnut Ridge developers against village and town officials, accusing them of preventing Hasidic Jews from buying houses, establishing a religious school, setting up a place for ritual baths and operating businesses. The case was settled in October and the village and town, according to The New York Times, agreed to pay $2.9 million to a company linked to Lamm.

The developers began buying land around Bloomingburg in 2006. Originally, they proposed building a 125-unit, “second home” townhouse community and a golf course. After the village rezoned the property to allow denser development, the developers submitted plans that more than tripled the housing to 396 units and eliminated the golf course. The larger project was approved by village officials in 2009.

The federal indictment says the developers had plans for numerous projects that would accommodate thousands of families. Bloomingburg was chosen, prosecutors said, because the village’s small population of about 420 people “made its local government vulnerable to being taken over.”

In 2013, Lamm circulated a confidential executive summary to investors that said the developers had worked in complete secrecy for seven years to get the first project approved, according to the indictment. Occupancy of Chestnut Ridge would allow them to “effectively control the local government, its zoning and ordinances.”

By December 2013, Chestnut Ridge was under construction, but local opposition was growing.

“It’s no more Mr. Nice Guy time,” Nakdimen allegedly said after the village planning board rejected measures proposed by the developers. “We need to win this election now more than ever and replace the entire planning board,” he said, referring to a March 2014 election for mayor and other positions.

The government says the developers set a goal of registering 150 voters. They recruited individuals who did not live in the village, had never set foot there and did not intend to live there. They also are accused of offering people $500 and rent-free housing to register with the Sullivan County Board of Elections.

The indictment says the defendants took steps to disguise their scheme. They backdated lease agreements to make it look as though voter registrants lived in the village for at least 30 days before the election. They placed personal items in apartments, such as toothbrushes and toothpaste. They arranged with a local bank to open accounts, created postal changes of address and picked up mail at the registered voters’ apartments every two days.

Lamm allegedly gave an associate a $31,000 check for his efforts in the scheme.

But candidates supported by the defendants did not win in the village’s March 2014 election.

Manhattan defense attorneys Larry Krantz and Gordon Mehler said in a written statement that Lamm is eager to defend himself against an unfounded charge and that they intend to fight the charge vigorously at trial.

“The charges are unfair and unwarranted,” attorney Justine Harris wrote on behalf of Smilowitz, who “looks forward to his day in court.”

The offenses carry a maximum penalty of five years in prison and a $250,000 fine.

U.S. Attorney Preet Bharara also charged Harold Baird, 60, a former town supervisor in Mamakating, with conspiracy to submit false voter registrations. Baird did not live in Bloomingburg but he registered twice to vote there and ran for a village trustee position in the 2014 election.

Baird pleaded guilty on Dec. 12. Sentencing is scheduled for June 22.

 

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