Three Hudson Valley men were arrested Nov. 21 in an FBI sting for allegedly transmitting $500,000 and trying to transmit up to $6 million in a “drying and washing” money scheme.
Alter Landau, 64, and Chaskel Landau, 45, of Spring Valley, and Joseph Neumann, 78, of Monsey were each charged with operating an unlicensed money transmitting business in White Plains federal court.
Investigators used wiretaps and a confidential witness who was cooperating in the hope of receiving a lenient sentence in a separate tax evasion case, to catch the defendants in the act of concealing the source, nature and control of illegal proceeds, from 2014 to 2016.
In this case, the members of the Landau family were allegedly trying to induce the witness to invest $6 million in property they owned, using funds that they believed were obtained illegally. The defendants agreed to conceal the source of the witness” money, according to the criminal complaint, by transmitting it to third parties and then returning it to the witness for a 10% fee.
The scheme allegedly began in early 2014 when a co-conspirator, who has not been charged, told the witness about the land deal at a wedding in Monsey.
In May 2014, the Landaus approached the witness at the airport in Budapest, knowing, according to the complaint, that he had been talking with the co-conspirator.
The Landaus allegedly wanted the witness to invest $6.25 million in their real estate project. The witness purportedly told the Landaus that he had cash overseas that he wanted to bring into the United States.
The Landaus pressed for more details at a subsequent meeting.
“I got it not in a legal way,” the witness replied, and admitted that he had not been paying taxes.
“I know a Jew, a very wealthy man that can use part of it,” Alter Landau allegedly stated. “He is going to give you a check, and the check is going to be for us, and that’s all. We are going to be pure. You’re as if you are getting a loan from that person, but you are not going to have to pay the loan.”
Alter Landau allegedly identified Joseph Neumann as the wealthy man and, several months later, described him as a silent partner.
“He is going to need drying and washing,” Alter Landau said, according to the complaint. “We will sit down with him, we will give him a hundred (thousand), he will write it down, he will give you a check for one hundred thousand.”
The witness met the Landaus and Neumann in June 2015 at Neumann’s home in Monsey, according to the complaint, and purportedly explained his “whole story.” He had run a motor vehicle registration business but had not paid taxes. Now he needed to deposit the money in personal bank accounts without drawing attention.
Neumann allegedly described his role and his 10% fee.
In July 2015, the witness allegedly handed Neumann $15,031 in cash “supplied by the government,” to test the process. He got back a check written from Broadway Management LLC, a company controlled by Neumann.
In September 2016, the witness allegedly handed Neumann $69,000 in cash, in exchange for a check written from Inter Global Reality LLC.
Neumann allegedly pressed for another $6 million for the Landau property.
“The fact that you are getting it back from a legitimate real estate transaction,” Neumann allegedly stated, “you have kosher money.”
The witness responded, “God forbid they ever check into it, ya know.”
“All three of us,” Neumann is said to have replied. “God forbid they ever check into this, there’s problems. Nothing is foolproof.”
In all, the witness exchanged $496,811 in cash for checks, according to the complaint, and paid 10% in fees. The Landaus, Neumann, Broadway Management and Inter Global Realty did not have state licenses allowing them to transmit money.
Operating an unlicensed money transmitting business carries a maximum prison term of five years.
The case was investigated by the FBI, Orange County sheriff’s department and district attorney’s office, and the Internal Revenue Service. Assistant United States attorneys Mathew Andrews and James McMahon are in charge of the prosecution.
