CLEVELAND, Ohio — A Conneaut businessman on Monday agreed to serve more than four years in prison after he admitted to laundering a major drug dealer’s money and burning down a shuttered restaurant for $1.1 million in insurance money.
Rueben Schwartz, 52, accepted the terms of the 50-month sentence as part of his guilty plea in federal court in Cleveland to two dozen charges over his plot to burn the Golden Anchor restaurant in February 2021 and launder Marc Mahoney’s cash by selling him property.
Part of the agreement involves Schwartz paying $1.1 million in restitution to an unnamed insurance company and forfeiting three properties owned by either Schwartz or his businesses, R&E Properties and Schwartz Construction.
Schwartz will remain in federal custody for now, but Assistant U.S. Attorney Elliot Morrison said during the hearing that federal prosecutors will not oppose a forthcoming request by Schwartz’s attorneys that he be released on bond until his sentencing.
During the hearing, Schwartz wiped tears from his eyes as he pleaded guilty to charges, including conspiracy to commit arson, wire fraud and mail fraud and conspiring to launder money.
U.S. District Judge Donald Nugent set sentencing for Nov. 19. If Nugent accepts the plea agreement as fair, he must sentence Schwartz to the four-year, two-month sentence. If he rejects the agreement, Schwartz will be allowed to back out of the deal and go to trial.
Schwartz’s attorney, Leonard Ambrose, declined comment after the hearing.
Schwartz, as part of his plea agreement, admitted to plotting with others to burn down the former Golden Anchor building on Harbor Street, months after he bought the building for $130,000 and took out a $1.3 million insurance policy.
He burned down the building after learning his initial renovation plans wouldn’t ultimately be profitable, according to prosecutors.
Schwartz made small repairs to make it appear he was legitimately rehabbing the building, then had others use a Torpedo-style space heater to burn it down, prosecutors said.
Those who set the blaze, who are not charged in the case or named in court filings, did so when Schwartz was out of town to make it look less suspicious, according to court records.
Schwartz lied to insurance investigators about the cause of the blaze and falsified documents to make it look like he spent more money rehabbing the building than he really did, the records say. The insurance company paid him $1.1 million.
He used that money to jumpstart construction of a new business, a drive-through called Port District Beverage, prosecutors said.
Schwartz also used money from a separate money-laundering operation for the drive-through.
In that scheme, Schwartz sold two properties to Mahoney, a former recycling plant manager turned cocaine dealer, according to court filings.
Mahoney in 2021 paid Schwartz $110,000 for a building that used to house the Crispy Biscuit on Park Avenue and another that formerly housed a thrift store, prosecutors said. On official paperwork, the duo said Mahoney actually paid $360,000.
Mahoney was later arrested in connection with a cocaine pipeline that stretched from Mexico to Cleveland. When federal agents raided Mahoney’s home, they seized $2.4 million cash and accused him of selling some 1,350 pounds of cocaine in Northeast Ohio in a three-year span.
Mahoney was sentenced to 14 years in prison in November for the drug-dealing operation and laundering money with Schwartz.