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Businessman charged with laundering money for accused Cleveland drug dealer tried to pay $100,000 to kill police officer, FBI agent testifies

by Jun 4, 2022Local News

An FBI agent has testified that a businessman charged with laundering money for an accused drug dealer tried to pay someone $100,000 to kill a Conneaut police officer.

FBI agent Jason Watson and federal prosecutors, in recent court filings and testimony, said Rueben Schwartz tried to pay someone to kill Conneaut police Detective Taylor Cleveland, the lead officer investigating Schwartz.

Schwartz, the owner of several real estate and construction businesses in Conneaut, is charged with money laundering. He pleaded not guilty at his arraignment on Friday.

No charges have been filed against Schwartz in connection with accusation against Cleveland. Schwartz, 49, is accused of laundering money by selling buildings to Marc Mahoney, who prosecutors say ran a cocaine-dealing ring that sold some 1,350 pounds of the drug in Northeast Ohio in a three-year span. The ring took in nearly $20 million.

Watson’s testimony came to light during a contentious week of sparring between prosecutors and defense attorneys over whether Schwartz should remain in federal custody. Two hearings were held this week, and both sides filed motions arguing their positions.

U.S. District Judge Donald Nugent on Friday ended the debate: He ordered Schwartz detained, reversing a magistrate judge who earlier ruled Schwartz should be let out on house arrest.

The hearings also featured details of a federal investigation into an arson at a building Schwartz owned and an admonishment of defense attorneys by the magistrate judge.

Schwartz during one hearing denied that he made any threats.

“I have no intentions of doing anything,” he said. “All I want to do is go home and hang out with my wife and kids… I have never hurt anyone in my life. I never ever would. I would never do that.”

Watson testified that Schwartz invited a person he knew from the construction trade to his home about one week after Cleveland and investigators for the U.S. Drug Enforcement Administration raided Schwartz’s home in February.

The person, who is not identified in court records, told investigators that Schwartz made the man first lock his phone in a toolbox. Schwartz asked the man if he wanted to make some “real money,” according to court filings and testimony.

He then said he’d give the man $100,000 and said Cleveland’s name while mimicking shooting someone in the head. Later in the conversation, he more plainly stated he wanted the man to kill Cleveland, according to Watson.

In a secretly recorded conversation with a friend, Schwartz bragged about owning 100 guns and that he told Cleveland during the raid: “If I wanted to shoot you, you’d be dead already, a—hole.”

Watson estimated that Schwartz had 45-60 guns inside his home, including rifles and shotguns.

Prosecutors said in court filings the threat is not out of character for Schwartz. Watson said in 2018 the same man and Schwartz drove to a home to shoot someone who owed them $100,000 for work they had performed. The man they looked for wasn’t home, and Schwartz later sued for the money, according to testimony.

Schwartz during the recent investigation also threatened an ex-girlfriend by saying if she talked to federal agents in the recent case “she’d end up buried in his back yard,” according to court filings.

“The way I viewed Mr. Schwartz is that of what I’d describe as a boss,” Watson said during testimony. “Mr. Schwartz has proven, as I step back from the case, that he gets others to do his criminal work.”

Watson also testified that investigators raided Schwartz’s home for the second time on May 19 and seized evidence they believe will show Schwartz committed insurance fraud by ordering someone to burn down the former Golden Anchor restaurant building.

Watson said Schwartz bought the building for $130,000 in 2021 and bought insurance for up to $1.3 million. A few months later, the building burned to the ground, and Schwartz so far collected $1.1 million from the insurance company.

The FBI agent testified that Schwartz’s business partner has already admitted to investigators that he burned down the building at Schwartz’s request. The case remains under investigation, Assistant U.S. Attorney Elliott Morrison said.

Defense attorneys Angelo Lonardo and Leonard Ambrose argued that investigators had no evidence of the conversations about the attempt on Cleveland’s life or other threats ever happened. They also argued that everyone who spoke to investigators has an ulterior motive to lie about Schwartz, and some have proven that they’ve already lied to investigators.

The case “was based entirely upon hearsay statements, attributed to inherently unreliable sources of information, all of whom had a bad faith animus toward [Schwartz], and a clear and apparent motive to hurt and falsely implicate the [Schwartz] in criminal wrongdoing,” the attorneys wrote in a Thursday court filing.

Attorneys also argued that Schwartz, 49, has two kids, is a lifelong resident with virtually no criminal convictions and is suffering from Stage 4 liver cancer.

The defense attorneys in arguing for Schwartz’s release also submitted evidence for a judge to review that included nude photos of Schwartz’s ex-girlfriend. Magistrate Judge Kathleen Burke on May 27 scolded Schwartz’s attorneys and demanded an apology to her and court staff who she said were “shocked” when they saw the photos.

Ambrose attempted to argue that the exhibits were necessary to show that the woman who said Schwartz threatened her hadn’t been honest during an interview with DEA agents. Burke cut off the attorneys.

“That does not give you justification for submitting naked photos of that individual,” she said. “It appears you may have been trying to embarrass a witness in this case. I hope not.”

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