My widowed mother is 89 and has dementia. Last year, she gave me power of attorney and I took charge of managing her finances. Still, I didn’t think too much of it when the accountant who had been preparing her taxes found another job and my mother’s file, along with mine, was reassigned to someone else at the same firm.
I Googled our new accountant’s name, mostly out of habit. I don’t know exactly what I expected to find, but it certainly wasn’t a 2008 press release from the Nassau County District Attorney’s Office announcing that he had pleaded guilty to stealing $1.16 million from DV Capital LP.
The release explained that Steven Rubenoff faced nine years in prison after he had “funneled the money through his daughter’s college fund to finance a drug and gambling problem.” There were news stories, too. “$1M SCAM FUELED COKE & BET BINGE,” blared the headline in the Post.
Each new search pointed to this man and our new accountant being one and the same. Martin Cohen, who bought out the small firm we were working with last year, had apparently put a felon in charge of doing my mother’s and my tax returns. It was the weekend, so all I could do was vent on Facebook. “Run!!!!” one close friend advised.
On Monday I called Mr. Cohen, who told me he had hired Mr. Rubenoff after he was paroled in June 2010, at the request of a local rabbi.
“I agreed to give him a job to help in the rehabilitation of this gentleman,” explained Mr. Cohen, who is an attorney as well as a CPA. “With Mr. Rubenoff, I did a mitzvah. I believe I have a responsibility to help my Jewish brothers and sisters. My philosophy is, if someone does something, and they’re truly repentant and they’ve evened their score with society, we start fresh.”
But what about my philosophy—and did it include giving a first-degree grand larcenist access to our Social Security numbers and brokerage and bank account numbers?
We were already doing business with Martin Cohen’s firm, and I had believed a reputable firm would hire reputable
accountants. While it was commendable that Mr. Cohen felt a responsibility to help his Jewish brethren, why should Mr. Rubenoff’s rehabilitation come before our security?
He assured me that Mr. Rubenoff doesn’t have direct access to clients’ money, as he had in his former position. “He’s not a fiduciary,” he insisted. “But I understand your point—rehabilitate him on your time, not mine.” I hadn’t made that point, but it seemed like a good one.
I thought that Mr. Cohen should have given me some warning. But when I had called the firm in mid-March and asked the receptionist for my mother’s accountant, I had simply been transferred to Mr. Rubenoff.
After I made this discovery, Mr. Rubenoff, 52, agreed to sit down with me to explain himself. We met at Martin Cohen’s Lower East Side offices—a one-story warren of cluttered cubicles with a fish tank in the window and a sign out front reading “Law and Income Tax Offices.”
Mr. Rubenoff was dressed in black Dockers, a red permanent-press shirt and black loafers so long they looked like barges.
Though he said he was uncomfortable talking about his past, he answered nearly every question amiably as we sat facing each other in one of the particle-board offices. This, I thought, is a guy who can’t say no.
As it turned out, not being able to say no is exactly what fueled his legal troubles. He told me that when he met an attractive woman through Match.com, he was working crazy hours for the midsize White Plains CPA firm Maier, Markey & Menashi LLP, his weight had ballooned to an all-time high of 350 pounds and his self-esteem had plummeted to a corresponding low.
The long-divorced Mr. Rubenoff had “always had a penchant for enjoying the casinos,” but now, driven by what he called his midlife crisis and a desire to entertain his new girlfriend in style, he began hanging out at the Borgata in Atlantic City on weekends and even some weeknights. “It escalated as my head got crazier,” he said. “My ego needed to be stroked more and more. I needed people to perceive me as someone with money.”
In January 2007, he made his first “withdrawal” from Maier client DV Capital, the personal investment account of Arizona Iced Tea co-founder Don Vultaggio. When no one noticed, he continued, transferring about $90,000 a month into his daughter’s college fund and then moving the money into an account controlled by his tax and consulting business, Rubenoff and Associates LLC.
He had always lived comfortably, but comfort was no longer enough. “I was dating out of my league,” Mr. Rubenoff said. “All she knew was, I had a lot of money and I was spending it freely,” not just on gambling, but on lavish dinners, shopping, traveling, cocaine—which “just kind of went with the rest”—and a Cadillac for himself. “I’d walk into a casino and hear, ‘Mr. Rubenoff, what can we do for you?’ And people are looking at me like, ‘Who’s this guy who can bet this kind of money?’”
“I was in such denial,” Mr. Rubenoff said. “On the one hand, I was doing everything I could to save [Mr. Vultaggio] money. On the other hand, I thought, ‘I work hard, I deserve it,’ though I didn’t.”
In February 2008, Mr. Rubenoff was arrested and thrown into Nassau County jail. He pleaded guilty and repaid $450,000, and DV Capital took a lien on a commercial building that Mr. Rubenoff and his family own. He was transferred to the Groveland Correctional Facility in upstate New York, where inmates live in dorms and can move around freely.
“It looked like a college campus,” Mr. Rubenoff said. He walked four to five miles a day, lifted weights and dropped 100 pounds. The hardest part was not seeing his then-14-year-old daughter, who was angry and stayed away.
Sentenced to two and one-third to seven years, he was granted parole his first time before the board after serving the minimum. “I felt sorry, but I had it in the back of my mind that I didn’t hurt anyone,” he said. “I didn’t take some 90-year-old widow’s money and she’s out on the street. I took a billionaire’s money. But these were people who were good to me, and I abused and broke their trust.”
A fellow inmate introduced Mr. Rubenoff to a rabbi who approached Martin Cohen on his behalf. Mr. Cohen hired him to take his wife and mother on errands, then eventually moved him to the accounting office. “Martin is an amazing person, a giver,” said Mr. Rubenoff, a nonobservant Jew and CPA’s son who grew up in Mill Basin, Brooklyn. “He took me in without judgment, without question.”
Mr. Rubenoff’s lifestyle is far more modest than it once was. The waterfront apartment he once rented in Nyack has been replaced with a room in his sister’s Staten Island townhouse, and the Cadillac is now an MTA bus. He’s dating again, and he says he always tells women the truth about his past, because he knows they’re just one Google search away from finding out anyway. He says his 20-year-old daughter has forgiven him for the damage he caused to their family, and they are once again close. “I just want what everyone else wants,” he said. “My own apartment, a car, a relationship.”
“I don’t need to be the show-off I once was,” he said. “I don’t have to fly first class.”
Mr. Cohen believes that Mr. Rubenoff is a low risk for further misdoings. “Would someone in his mid-50s who went through what he went through and is out now for a couple of years want to risk going back to prison?” Mr. Cohen asked.
But what did I believe? It seemed unlikely that anyone would give him fiduciary power again, making a repeat of his exact sort of mistake equally unlikely. But might he make another? Was this man somehow wired to self-destruct?
In the process of doing due diligence, I discovered some information that gave me pause. When he was hired, Mr. Rubenoff told Mr. Cohen he had lost his CPA license because of his criminal record. But the New York State Board for Public Accountancy has no record of him ever having been licensed. When I mentioned this to Mr. Rubenoff, he confessed to having lied. “My bad,” he said. “I shouldn’t have said that. It was a technicality. I never followed up on some continuing education.” Mr. Rubenoff said he had falsified the information to make himself sound more marketable. “It was a little bit of ego,” he said. “It’s always going to be there a little bit, but it’s not the monster it once was.”
As it turned out, this information was a revelation to Mr. Cohen as well. “Wow,” he said when I told him. “I didn’t know that.” He said the untruth might have made a difference when he first met Mr. Rubenoff, but less so now, because clients were so happy with his employee.
Mr. Cohen said that unlike the office’s younger CPAs, Mr. Rubenoff is never stumped, even when it comes to unusual tax issues, like the Schedule F form used by farmers and fishermen to file their taxes. “When Schedule F came up, he said, ‘Big deal—I used to do this in my old firm all the time,’” said Mr. Cohen.
My concerns remained, but April 15 was looming and I didn’t have any better ideas—and I was also swayed by Mr. Cohen’s position. It also seemed I might be getting a bargain; normally, an accountant of Mr. Rubenoff’s stature and skill would be busy finding tax loopholes for moguls like Mr. Vultaggio, not deductions for freelance writers.
So I stuck with Mr. Rubenoff, which turned out to be a profitable move. Thanks to him, we learned that my mother’s wheelchair-accessible van, rehab stay after a broken hip and 24-hour caretaker were all deductible. In the end, we wound up owing several thousand less than we had originally expected. Sometimes gambling does pay.