NY corruption: Moses Stern's property flip in Spring Valley led to feds' takedown

The mortgage fraud case that exploded into a federal takedown of six political figures in Rockland County and New York City this week involved Moses "Mark" Stern's 2006 sale of a house next to his Monsey mansion.

Stern bought the home at 39 Remsen Ave. for $550,000 in October 2004 then flipped it to his brother-in-law David Neumann of Monsey for $1.85 million less than two years later. Neumann secured the money with $1.5 million in mortgage and home equity financing from Washington Mutual Bank.

Federal authorities charged Neumann with bank fraud on April 26, 2010 -- six months after a Rockland County court ruled Washington Mutual's successor, Bank of America, could foreclose on the property because Neumann had not made payments on the loans on the property that has an assessed value of $59,200.

Federal authorities charged that Neumann had given Washington Mutual a phony appraisal to falsely inflate the value of the run-down Cape Cod-style home.

Neumann, 32, pleaded guilty to bank fraud in federal court in November. He has yet to be sentenced.

His lawyer, Jacob Laufer, would only say, "Mr. Neumann has no connection whatsoever to the current matter of public corruption involving Mr. Stern."

Stern, 40, was not charged in connection with the mortgage fraud. He also was not charged in the case where his escrow agent, Ephraim Frenkel, was accused of fraud in connection with $126 million in loans and a $13 million escrow account Stern's company received from Citigroup and would-be partners to buy 11 strip malls in the Southeast.

Federal prosecutors charged Frenkel and Neumann on April 26, 2010, and indicted them in separate cases on Dec. 7, 2010. Stern's name was not on the charging documents in either case.

Stern has been cooperating with federal investigators for at least two years and used his reputation as a real estate developer to help the FBI run a sting operation that led to the arrests Tuesday of Democratic New York State Sen. Malcolm Smith, Republican Queens Councilman Daniel Halloran, Bronx GOP leader Joseph Savino and Queens GOP vice chairman Vincent Tabone in a plot to secure Smith a spot on the Republican ticket in the New York City mayoral race.

Stern also was instrumental in helping FBI agents snag Spring Valley Mayor Noramie Jasmin and Deputy Mayor Joseph Desmaret in an alleged bribery plot involving the building of a community center adjacent to the village hall.

Jasmin, 49, and Desmaret, 55, have been charged with mail fraud for allegedly rigging a 2012 vote by the village's five-member board of trustees so she could meet with Stern to discuss developing the 2.25 acres for the center. What Jasmin and Desmaret did not know was that the "developer" was actually an undercover FBI agent.

Fellow board members also were not told that Jasmin had a hidden financial stake in the company she favored for the project, federal prosecutors contend.

Jasmin, Desmaret and the others have denied any wrongdoing.

'DEVELOPER' SOUGHT MEETINGS WITH TWO TRUSTEES

The community center project was such a hot-button issue for the village board last year, that members openly battled about it, recalled trustee Demeza Delhomme. During one meeting, trustee Anthony Leon and Desmaret shouted at each other. Later, Delhomme said Desmaret called and asked to meet him at the Airmont Diner.

"We had a brawl that night (at the meeting), I thought that's what he called me for, to figure out, you know, how to handle this situation because since I'm the senior trustee; I try to (handle things) between them," Delhomme said.

Shortly after the two ordered dinner, a man dressed in Jewish garb -- whom Delhomme said he did not know -- slid into their booth.

"All of a sudden somebody come and sit (sic) at the table," Delhomme recalled. "I was very upset because, I was like, 'Who is that guy? Who is he?' Then (Desmaret) told me, 'This is the developer.' I said, 'The developer of what?' He said, 'The developer of the front of the village hall.' I said, 'Wait a minute, isn't the mayor the one who is supposed to be out there negotiating with people, not me, not you?' I said to the guy, 'Listen, I don't know you, but if you have anything good, come to the (village) workshop, present it. If it is good, I will vote for it. If it's not good I'm not going to vote. Then I wiped my mouth and I took off."

Leon said the same scenario unfolded for him after the volcanic trustee meeting. "Those shady things were going on and she (Jasmin) played her politics well." A vote to move the project along passed by a 4-1 vote, with Leon the only dissenter. Leon said the vote would merely allow Jasmin to discuss the issue with the developers so he went along with it.

After the session, Leon said Desmaret summoned him to the Airmont Diner to discuss their disagreements, and an unfamiliar developer showed up while they were eating. "I saw the guy come in. He tried to tell me about the project and I said 'no. I don't guarantee you any vote.'

"Desmaret got everybody separate -- he tried to get everyone's vote," Leon said of the three trustees.

Trustee Joseph Gross, however, said he was not privately approached about the project.

"I never had a tough time on the board, that's probably why," Gross said in his first public comments since the scandal broke Tuesday. "I'm speechless about the situation. I never expected this."

While Gross knows Stern from the community, he said he's never dealt with him in terms of village matters.

"I looked over all the minutes from the meetings; I didn't see anything different than normal just that (Jasmin) asked for a vote to do a meeting (with Stern)... Basically I didn't see anything fishy with it."

Nevertheless, Gross said he wasn't sold on the project that was in the early planning stages. "I didn't really make up my mind at that point. It was a big discussion, a big project. I had to see what was in it.

"She (Jasmin) wanted this project when she came in (to office); first thing she wanted was a new center for the community," Gross recalled.

Desmaret could not be reached comment.

CARLUCCI: I REBUFFED STERN

About a month ago, Smith suggested that fellow state Sen. David Carlucci (D-Rockland/Orange) meet with "a constituent," and the undercover FBI agent to enlist Carlucci's help in securing $500,000 in state transportation money to help fund the Spring Valley project.

Carlucci told News12 Friday that he met with Stern, who detailed the project for him. He said he told Stern that it was a local issue and "not something I could be of help with."

Carlucci said he didn't suspect any wrongdoing at the time and did not alert federal authorities. He said he was "shocked" and "angry" when he found out about the arrests. "I think they (Jasmin and Desmaret) definitely have to consider whether they can serve the public to the best of their ability, he said.

Gross, however, said Jasmin has no plans to resign.