Weekly News

Cops Suspect Arson After a Home Linked to Ivanka Trump's Diamond Business Burns

February 21,2018 14:14

The house in question was, until not long ago, owned by the family of Moshe Lax—a real estate and diamond heir with whom Ivanka Trump launched her jewelry company. A prominent figure in Trump's business career—and in her 2010 memoir—Lax first ...

She may have closed down her fine jewelry line, but Ivanka’s partners have kept the old company at the center of an ever-deepening mystery.

Even though Ivanka Trump shuttered her fine jewelry business after her father’s surprise election win, the mysteries around the business have only grown.

In December, GQ reported that a judge had granted a bank permission to subpoena the firm in connection with an alleged money-laundering scheme. The latest twist involves a suspected arson.

In the early morning hours of December 30, on a quiet street in a suburb of New York City, a small fire began to burn in an empty house. Soon the home was engulfed in flames. For the next six hours, firefighters battled the blaze in the cold. After that, the local police took over—opening an arson investigation that remains ongoing.

What ties some charred ruins on Carlton Road in Monsey to the West Wing at 1600 Pennsylvania Avenue?

The house in question was, until not long ago, owned by the family of Moshe Lax—a real estate and diamond heir with whom Ivanka Trump launched her jewelry company. A prominent figure in Trump’s business career—and in her 2010 memoir—Lax first introduced Ivanka to Jared Kushner in 2007. Around that same time, he and Ivanka launched Ivanka Trump Fine Jewelry, complete with a flagship boutique on Madison Avenue. Under the deal, Trump, who then owned a stake in the company, licensed her name for use by Lax's firm, Madison Avenue Diamonds, in exchange for royalties.

Over the years that followed, Lax’s reputation deteriorated. And though Trump has never been accused of wrongdoing, her old partner has been accused in court of a litany of financial misdeeds, including fraud, extortion, and stiffing creditors (some of the allegations have been related to Ivanka Trump Fine Jewelry, some haven’t).

Lax and Trump eventually closed their jewelry business, but questions about the operation linger, including the mystery—now being scrutinized in court—of Lax’s relationship with a businessman named Baruch Rosenfeld, a sometime partner of his who’s connected to a $1.5 million loan that was once given to the jewelry business. Rosenfeld is notable for another reason: His family ​owned th​e​ house on Carlton Road​—the one that had burned and is now the subject of that ongoing arson investigation.

As in plenty of business relationships, the threads here are varied and sometimes tangled. Deals and identities have been obscured by instruments like LLCs. But details surfacing in court offer fresh insight into Ivanka Trump’s former partner—and provide a glimpse at the odd legal mess that remains long after Ivanka Trump Fine Jewelry was discontinued.

Here’s what court filings made by Lax show: Several years ago, a nonprofit controlled by Rosenfeld’s family—a religious organization called Congregation Bais Yehuda D’Ganitch—loaned $1.5 million to what was then Ivanka Trump’s jewelry business. While IRS records show Congregation Bais Yehuda D’Ganitch is indeed registered as a public charity, it is not clear from those documents what the organization does. Nor is it clear what Ivanka Trump Fine Jewelry might have needed with its money. By 2012, though, the charity apparently wanted its cash back and filed a lien against the jewelry business, according to New York State records.

The relationship between Lax and Rosenfeld continued. Two years later, in 2014, the Lax home on Carlton Road changed hands and was acquired by an entity associated with Rosenfeld’s family, according to property records.

Then in 2015, Rosenfeld helped Lax by co-signing with Lax’s wife on a $1 million loan they received from a man named Michael Goldenberg and his wife. A short while later, the Goldenbergs made another loan to the Laxs, for $600,000. According to a person familiar with the loans, they were meant to help Lax set up a post-Ivanka retail venture called Code.

Code launched last February, with both Tiffany Trump and—according to a person present—Rosenfeld attending the launch party.

But Lax and his wife didn’t make good on their loan payments, and last year Goldenberg—a retiree with a heart condition who is collecting Medicare and Social Security—and his wife sued to get their money back. Though Ivanka Trump had cut ties with her fine jewelry line, the Laxs still controlled the company behind it, Madison Avenue Diamonds, and in April a judge ordered Lax’s wife to turn over her share in the business for public auction. The company that just months earlier had been doing business as Ivanka Trump Fine Jewelry was set to be auctioned off to the highest bidder to pay off a debt to an aging, unassuming suburban couple.

But there was an obstacle: That $1.5 million lien against the jewelry business remained unresolved. Rosenfeld had transferred the debt from the charity to a corporation he controls—and had gone to another judge to obtain his own judgment against Lax and the jewelry business. The Goldenbergs were suing Lax to get their money back, but now, because Rosenfeld was calling in an older debt—which he said he was still owed—he effectively blocked the Goldenbergs from collecting on theirs.

At this, the Goldenbergs cried foul, claiming in a court filing that they were being thwarted in their efforts to collect the money they were owed. They described the handling of the mysterious $1.5 million loan as “highly suspect” and suggested the transactions between Rosenfeld and Lax might have violated a New York fraud law.

Meanwhile, the movement of money between Lax and Rosenfeld’s family has continued, and in August Lax sold a property in Brooklyn to a Rosenfeld-linked entity, according to property records.

Against this backdrop—with the relationship between Lax and Rosenfeld at the center of a messy court battle, and with control of the remnants of the jewelry business hanging in the balance—firefighters raced in the dead of night toward a large house on a dark street. By morning, the house on Carlton Road had burned down.

Now police want to know why. They have declined to comment on what may have led them to suspect arson, and the Rockland County Sheriff's Department rejected a Freedom of Information request about the fire, citing the ongoing investigation.

Reached on his cell phone, Rosenfeld hung up when a writer for GQ identified himself as a journalist. Rosenfeld did not respond to questions left in a follow-up voicemail, nor did a lawyer who has worked on his behalf respond to questions.

Lax also did not respond to e-mails requesting comment.

White House spokesman Josh Raffel did not respond to e-mailed questions. Abigail Klem, the president of Ivanka Trump’s brand, declined to comment on the record. So it’s tough to know what Ivanka Trump makes of the legal fights that her discontinued jewelry business—and her erstwhile partner—are still embroiled in. These days, the diamonds may be gone, but it seems like the dilemmas are forever.

Ben Schreckinger is a GQ correspondent in Washington, D.C.

Ivanka Trump


Parkland Victims Yelled at the President to Actually Do Something

The Importance of Rudeness

Ivanka Trump

Share this article

Related videos

State of the Union Address 2018 and Democratic response: Coverage and live stream from CBSN
State of the Union Address 2018 and Democratic ...
Video Shows Female Armed Robber Ambush, Shoot Family In Florida | NBC Nightly News
Video Shows Female Armed Robber Ambush, Shoot F...