Stewart Rosenwasser

HAMPTONBURGH — Stewart Rosenwasser, the former prosecutor in the Orange County District Attorney’s Office accused of taking bribes in a high-profile embezzlement case, died by suicide Tuesday morning after exchanging gunfire with the FBI, according to a law enforcement source briefed on the case.

Rosenwasser had been under investigation by federal authorities for bribes he allegedly took from Mout’z “Marty” Soudani, the victim in a $1.9 million theft and embezzlement case Rosenwasser prosecuted in 2022 and 2023. He was also facing an imminent lawsuit from Soudani’s son — the defendant in the embezzlement case — and Soudani’s sister concerning $48,000 in bribes they said Rosenwasser accepted.

A few hours after his death, the U.S. District Court in the Southern District of New York unsealed a 43-page indictment against Rosenwasser and Soudani charging them in the alleged bribery scheme. Federal prosecutors claimed Rosenwasser accepted even more money from Soudani than what was alleged in the lawsuit: $63,000.

A grand jury indicted Rosenwasser and Soudani on charges of conspiracy to commit bribery, conspiracy to commit honest services wire fraud, and honest services wire fraud. They were individually charged with bribery. Rosenwasser was also charged with extortion under color of official right and making false statements to the FBI during an interview on June 18 — three days before he abruptly quit his job at the District Attorney’s Office. Soudani was separately charged with making interstate threats.

Read the full indictment:

FBI agents arrived Tuesday morning at Rosenwasser’s home on state Route 416 in the hamlet of Campbell Hall to execute an arrest warrant, according to sources with knowledge of the situation. Federal agents had previously searched Rosenwasser’s home over the summer.

At 9:35 a.m., the FBI reported a barricaded subject and shots fired at the scene. Three minutes later, agents reported four shots were fired. At 9:48 a.m., the FBI requested a Special Operations Group SWAT team from the Orange County Sheriff’s Office.

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In a statement, the FBI said it was “reviewing an agent-involved shooting that occurred earlier this morning in Campbell Hall, NY. The FBI takes all shooting incidents involving our agents seriously. In accordance with FBI policy, the shooting incident is under review by the FBI’s Inspection Division. As this is an ongoing matter, we have no further details to provide.”

The bribery allegations against Rosenwasser were laid out in detailed court filings by Martin Soudani — Mout’z Soudani’s nephew, who pleaded guilty to grand larceny last November is now seeking to have his conviction overturned — and Eman Soudani, Mout’z Soudani’s sister and Martin’s mother.

In August, mother and son served notices of claim — a standard step before filing a lawsuit — against Rosenwasser as well as Orange County District Attorney David Hoovler, Chief Assistant District Attorney Christopher Borek, the Orange County District Attorney’s Office and the county, seeking $22.5 million for alleged malicious prosecution, bribery, fraud, state and federal rights violations and other claims. The notices include copies of checks and text messages they say illustrate a bribery scheme involving Rosenwasser and Mout’z Soudani.

The Times Union on Tuesday morning published an extensive report on the notices, each of which begins with a bold declaration: “This case may present the most blatant example of prosecutorial corruption and fraud in the annals of New York case law.” They were the latest twist in a complex legal saga involving the Soudanis that had been playing out in federal and local courts. In addition to bribery, there have been allegations of sexual assault, money laundering and illegal cryptocurrency investments.

Rosenwasser had a long history of jurisprudence in the lower Hudson Valley, which included decades of private practice experience, a two-year stint as an assistant district attorney in the late 1970s and six years on the bench as an Orange County judge and acting state Supreme Court justice. He was initially rehired at the District Attorney’s Office in 2019 as special counsel for policy, research and legal development and led the Conviction Integrity Unit, which reviews cases in which defendants claim they were wrongfully convicted. Last fall, the Detectives Crime Clinic for Metropolitan New Jersey and New York gave him an award for his work on a Newburgh arson case, and the International Association of Arson Investigators’ local chapter named Rosenwasser Arson Prosecutor of the Year.

In the indictment, federal authorities laid out a detailed timeline they say illustrates the alleged bribery scheme, similar to the version of events Eman and Martin Soudani have alleged in civil court filings.

The indictment claims Rosenwasser abused his powerful position in the District Attorney’s Office and violated “special responsibilities” of the office by allowing Mout’z Soudani to influence him through bribery payments leading to the arrest, investigation and eventual prosecution of Eman and Martin Soudani in 2022 and 2023. (The charges against Eman were eventually dropped.) The indictment also claims Rosenwasser used the case to enrich himself, alleging some of the bribes were paid after a portion of restitution was given to Mout’z Soudani in January of this year.

But federal prosecutors also say that Rosenwasser committed further crimes when he tried to cover up the alleged scheme.

Rosenwasser repeatedly refused to recuse himself from prosecuting the case despite his personal relationship with Mout’z Soudani, an obvious conflict of interest. He also allegedly lied about the nature of their relationship on financial disclosure forms and in conversations with senior leaders of the District Attorney’s Office.

In a voluntary interview with the FBI in June, Rosenwasser told agents that Hoovler and Borek were aware of Rosenwasser’s relationship with the Soudani family. He told agents Borek and Hoovler “indicated it would be beneficial for the case” for Rosenwasser to execute arrest and search warrants against Eman and Martin Soudani in Colorado and might encourage them to participate in an interview, according to the indictment.

Federal authorities say that was a lie. Hoovler and Borek have also claimed they didn’t find out about the conflict until later in the case, leading to Borek replacing Rosenwasser as its lead prosecutor.

Brendan Lyons and Phillip Pantuso contributed reporting.