By Herbert Hadad

It's a comfortable verity: Your home is your castle.

But what happens if you yearn for a real castle? Hanspeter Walder and his wife, Steffi, lived in a good house on one of the best roads in Tarrytown, New York, about three miles from my house. It was a cozy existence. They were known for their sophisticated hospitality. Yet they had a dream.

Across the village, atop the highest hill in the county, stood a century-old Norman-style castle, complete with crenellated towers that looked like a jack-o'-lantern's teeth, richly paneled rooms, and an atmospheric winding driveway, where unsuspecting visitors occasionally encountered grazing deer.

One summer, back when the castle was the headquarters of a community-minded mutual fund, my wife and I attended a party there. Sipping drinks and accepting canapés from waiters in formal wear, we strolled the grounds and gazed out at the Hudson River while the Preservation Hall Jazz Band tapped out their infectious melodies. It was a golden evening.

Then the mutual fund moved out, and the castle fell into disrepair. From their suburban perch across town, the Walders saw their chance. And so Hanspeter, a Swiss man in the employ of the United Bank of Switzerland, and Steffi, a native of Germany, bought the castle. With the help of other family members, they began the task of turning it into a world-class inn.

During their first three years of ownership, the Walders oversaw incredible transformations: thirty-one guest suites, a heated outdoor pool, tennis courts, banquet facilities, a first-class restaurant. One brisk evening in March 1997, they invited community leaders (and my wife and me) to a benefit gala they were hosting.

The once-gloomy mansion—now renamed the Castle at Tarrytown—sparkled with lights and candles and the excited chatter people utter when they are made to feel special. Walder, a tall, handsome man with graying curls, and his lovely wife greeted everyone, offered spectacular food and drink, and appeared to enjoy themselves thoroughly as they mingled with their hundreds of guests.

When Evelyn and I and the couple we had invited to join us found all the seating for dinner occupied, Walder himself led us upstairs to one of the newly created suites. "Here you can enjoy your drinks and dinner in peace and quiet," he said, smiling.

Over time, Hanspeter and Steffi, who ran the inn with their daughter and son-in-law, put the finishing touches on their dream. They built a new guest wing. They hired a sommelier and a French-speaking maitre d'.

The Castle at Tarrytown became one of a handful of American hotels listed in Relais & Châteaux, the international hotel and restaurant guide. Condé Nast Traveler named it one of the top-twenty small hotels in America. Zagat raved about the food at Equus, the inn's restaurant. The building itself won an American Institute of Architects award.

Hanspeter re-entered my life on the morning of September 25, 2001. I'm a press officer at the U.S. Department of Justice, in the New York office. One of my jobs is editing press releases. The words of one release that hit my desk that day almost leaped off the page:

"MARY JO WHITE, the United States Attorney for the Southern District of New York, announced today that HANSPETER WALDER, a private banker at United Bank of Switzerland, AG (‘UBS'), in Manhattan, was arrested last night on charges that he stole approximately $70 million from client accounts at UBS."

On the night before, with the inn and the restaurant buzzing with guests, the Walders celebrated their thirtieth wedding anniversary in the Castle's imposing Great Hall, surrounded by happy family and friends.

But in the lobby were four FBI agents, accompanied by two Tarrytown police officers. The FBI agents made their way to the Great Hall, flagged down a waiter, and asked him to ask Walder to step outside. As guests turned to see what was happening, Walder tried to put his arm around one of the agents in a vain effort at conviviality. In reality, he couldn't have been too surprised to see the FBI there; he had already confessed the embezzlement to his bank.

When Walder declined to leave with the agents, they did what they later said they had hoped to avoid. They handcuffed him and led him away to a patrol car. Walder's last words at the Castle that night were "Don't worry—it's nothing. I'll be back soon."

The cachet of the Castle, which had become a "destination" for visitors to New York and the Lower Hudson Valley, along with the scale of the alleged misdeeds of the international banker/proprietor, spurred hundreds of media inquiries to my office and scores of news accounts in the American and Swiss press.

Shortly after the charges were made public, the federal government took ownership of the Castle and turned over its daily operations to Walder's bank, which had by then fired him. UBS officials fired Steffi, the other family members, and some Castle employees.

The headline of the next press release, dated August 1, 2002, read:

"BANKER PLEADS GUILTY IN U.S. COURT TO STEALING $70 MILLION TO SUPPORT 'CASTLE AT TARRYTOWN' HOTEL."

Walder, a money manager at UBS, confessed to embezzling from at least twenty-two clients without their knowledge beginning in the mid-1980s and transferring the cash to accounts he controlled. Much of the money went into an account called 400 Benedict Corporation. The Castle's address is 400 Benedict Avenue.

Ultimately, Walder pleaded guilty to sixteen counts of embezzlement by a bank officer, and agreed to forfeit his interest in the $70 million in cash, the Castle, and a Manhattan apartment he'd bought with some of the embezzled funds. The inn was sold and rechristened the Castle on the Hudson, by which name it operates today.

On January 13, 2003, there was one more press release. A judge had sentenced Hanspeter to eight years in prison: "WALDER was ordered to be jailed immediately following the sentencing proceeding." At the time, he was fifty-nine years old.

After another spate of news stories, the Walder saga died down, and I more or less forgot about Hanspeter as my office continued to prosecute its usual array of miscreants: terrorists, drug lords, organized crime figures, white-collar criminals.

A few months ago, I was happily distracted from the routines of the workaday world by the presence of my daughter, Sara Jameel, newly returned from almost two years of living and teaching in Prague. She was planning to move into an affordable apartment on Manhattan's East Side, and she and I had become devotees of local tag sales.

One afternoon, we arrived at a sale at a commodious Cape Cod­style house with a landscaped garden and a pool, and joined the many others browsing with a barely concealed zeal for bargains. For my house, I found a set of mahogany end tables, then a large wicker basket for stowing CDs and audiotapes. Sara honed in on a Queen Anne chair upholstered in green for her new bedroom.

We paid for our prizes, which were brought out to the driveway. Two women helped us fit them into our car.

Suddenly, I remembered something. This was the nice Tarrytown street where the Walders had resided. "Wait a minute," I said to one of the women. "I think I know this neighborhood. Do you know who used to live next door?"

"No, tell me," she said.

"He was this Swiss banker who had a dream to open a castle as the best inn and restaurant in America. And he realized his dream, except he had to steal $70 million to do it."

"How do you know?" asked the other woman.

"My office prosecuted. I'm with the Department of Justice."

As the second woman withdrew into the house, her friend leaned in toward us.

"Not the next house," she whispered. "This house."

"Oh, God," I said. I went inside and walked from room to room until I found Steffi Walder again, and stammered my apologies.

"There is no need," she said. "You said nothing wrong. Everything you said, he did."

We took each other's hand, and I folded my other hand over hers. She looked into my eyes and smiled. "You're so gracious, Mrs. Walder," I said, much relieved. "Thank you so much."

I walked back outside, and Sara and I drove away with our new possessions, remnants of a castle made of sand, or so it seemed in hindsight.

Herbert Hadad, a Northeastern graduate and award-winning writer, continues to make house calls.