Appeals Court Rules Orange County Owes Nothing in Rosenwasser Bribery Scandal

Orange County and its District Attorney's Office are not liable for the legal defense costs of former executive assistant district attorney Stewart Rosenwasser, the Appellate Division of the New York State Supreme Court ruled this week, closing a major branch of civil litigation stemming from one of the county's most jarring public corruption cases in recent memory.

The appellate panel affirmed a lower-court dismissal, concluding that Rosenwasser's alleged conduct was not part of his official duties but rather "undertaken in connection with an illegal bribery scheme," one that was actively concealed from the Orange County District Attorney's Office itself.

The case traces to a federal indictment that surfaced in 2024 alleging that Rosenwasser accepted roughly $63,000 from Mout'z Soudani in exchange for favorable handling of investigations and prosecutions involving members of Soudani's family. Rosenwasser died by suicide as federal agents arrived to arrest him. Following his death, the Soudani family filed a federal civil-rights action, while Rosenwasser's estate separately sought indemnification from the county under Local Law No. 3 of 1998, the county's public-employee indemnification statute.

County Executive Steven Neuhaus denied that indemnification request in June 2025. Rosenwasser's estate challenged the denial in state Supreme Court at the trial level; that challenge was dismissed, and the Appellate Division's ruling this week affirmed the dismissal.

The practical consequence is that county taxpayers will not bear the cost of defending Rosenwasser's estate in the Soudani civil litigation. The ruling also sets a narrower standard for when the county can be compelled to defend an employee's alleged misconduct, reinforcing that Local Law No. 3 does not extend to conduct that is corrupt, personal, or deliberately hidden from the employer.

The decision does not end all litigation connected to the scandal. The federal criminal case against Mout'z Soudani remains pending, and related civil proceedings are expected to continue. With the indemnification question now settled at the appellate level, however, the county has been formally removed from the role of financial backstop in the matter.