This would mean that there was mortgage fraud, and probably property tax fraud, and TARP.
I speculate that if you squint your eyes really, really hard, then look at the financials, you will see the Detroit Land Bank Authority, but, hey, what do I know?
I know we have now entered the New York Police Department quagmire of public drama of trafficking tiny humans.
This quagmire, also, includes the New York prison guards.
Hedge Fund Fraud Case Study — Platinum
‘Liar,’ and Star Witness in City Graft Cases, Gets 10-Month Sentence
Jona Rechnitz was arrested on corruption charges in New York and then became a star witness. His testimony led to the conviction of several officials. |
| Jona Rechnitz & DeBlasio |
Mayor Bill de Blasio called him a “liar and a felon.”
The man, Jona S. Rechnitz, was a wealthy real estate scion who made large donations to the mayor’s political campaigns and causes, gaining access to key officials, including Mr. de Blasio.
But Mr. Rechnitz became an instant pariah in City Hall after pleading guilty in 2016 to corruption-related charges. He admitted that those contributions — as well as direct bribes given to police officials — were a means to gain influence.
His admissions formed the core of a cooperation agreement in which he became a key government witness in three federal corruption trials, leading to the convictions and guilty pleas of half a dozen people, including a powerful correction officers’ union boss, a hedge fund mogul, a police official and a Brooklyn businessman.
Mr. Rechnitz became, according to federal prosecutors in Manhattan, “one of the single most important and prolific white-collar cooperating witnesses in the recent history of the Southern District of New York.”
On Thursday, Mr. Rechnitz was sentenced to five months in prison and five months of house arrest, followed by three years on parole, an outcome that contrasted sharply from the possible 20 years in prison he faced when he was first arrested and charged. The start of his sentence has been suspended pending the outcome of an appeal.
Before he was sentenced, Mr. Rechnitz apologized to Judge Alvin K. Hellerstein for his “criminal and moral” behavior, and asked the judge for leniency.
“I cannot express, your honor, how distraught I am at how I desecrated my religion,” he said, acknowledging that he had “made many poor choices, and many people suffered because of them.”
Mr. Rechnitz had endured intense public scrutiny as a government witness, federal prosecutors said. He met with prosecutors more than 80 times, often traveling to New York City from the West Coast, where he lived.
His testimony in one of the trials helped expose years of sordid and petty corruption within the New York City Police Department — officials who had provided favors in exchange for junkets, prostitutes and expensive gifts — that reached the highest echelon of the department.
Mr. Rechnitz’s testimony, the government wrote, had “exposed the sordid underbelly of multiple New York City institutions, exposed serious crimes and held powerful people who fell short of their obligations to the broader public to account.”
The cases cast a cloud over City Hall and the mayor, who was never accused of wrongdoing. Mr. Rechnitz asserted that he had bought access to City Hall with his donations to Mr. de Blasio’s campaigns and causes; the mayor said that Mr. Rechnitz was “exaggerating in many, many ways,” characterizing him as a “horrible human being.”
Mr. Rechnitz had undoubtedly hoped to make a different kind of impact when he moved to New York City from Los Angeles in 2008 to follow in his father’s footsteps in real estate.
He got his start with Africa Israel USA, an international real estate development firm owned by Lev Leviev, an Israeli real estate and diamond mogul. Mr. Rechnitz wanted badly to be a “big shot,” federal prosecutors said during one of the trials.
Mr. Rechnitz eventually met Jeremy Reichberg, an enterprising Brooklyn businessman who had built a reputation as a “fix-it guy” who used his police connections to help friends and associates with moving and parking violations for a fee. (He was sentenced to 48 months in prison in May.)
The men bonded, it seemed, over a shared desire to secure access to New York City’s most powerful and influential officials.
“He had all these connections to police,” Mr. Rechnitz testified. “I didn’t know many people that had connections with police, growing up in Los Angeles, and I thought this would be an awesome tool for me personally and for my business.”
The men became partners, federal prosecutors said, trading gifts with police officials for favors. Mr. Rechnitz testified that he spent hundreds of thousands of dollars on meals at luxury restaurants, sporting events, on private jets, jewelry, hotel stays, all-expense paid trips and prostitutes for officers.
The men used their connections to officers in one instance to shut down a lane in the Lincoln Tunnel to allow a police escort to take Mr. Leviev, Mr. Rechnitz’s boss, to his Manhattan hotel.
 |
| Jeremy Reichberg |
“This will earn me lots of points,” Mr. Rechnitz recalled thinking.
Three years later, he launched his own firm, JSR Capital, in midtown on Fifth Avenue.
By 2013, their police connections included four deputy chiefs in commands throughout the city.
Emboldened, they chartered a $60,000 jet to Las Vegas in February 2013 with a prostitute on board for an all-expense-paid Super Bowl weekend with two police officials.
On Christmas Day that year, they dressed as Santas and delivered expensive gifts to high-ranking police officials. In exchange, they got favors and police escorts.
Around the same time, they began courting Philip Banks III, a former chief of the department. They bought him a ring that once belonged to Muhammad Ali, took him to cigar bars and on trips to Israel, the Dominican Republic, Los Angeles and Las Vegas.
In return, they asked Mr. Banks for a parking placard, and to promote a police official — which Mr. Banks did. Mr. Banks was not charged with a crime. He resigned in 2014 citing unspecified personal and professional reasons.
Mr. Banks introduced Mr. Rechnitz to Norman Seabrook, the longtime leader of the Correction Officers’ Benevolent Association, who was one of the most politically connected figures in the city.
Mr. Rechnitz played a key role in the prosecution of Mr. Seabrook, who was convicted last year on bribery and conspiracy charges. Mr. Seabrook had steered $20 million from the union into a risky hedge fund in exchange for a promised kickback worth more than $100,000. The union lost $19 million of its investment.
Still riding a wave of “unbridled ambition,” prosecutors said Mr. Rechnitz turned his attention to City Hall.
“We’re going to become significant contributors, but we want access,” Mr. Rechnitz told Mr. de Blasio’s chief fund-raiser. “When we reach out for things, we want them to get done.”
Over the next several months, Mr. de Blasio received more than $150,000 in contributions for his political campaigns and causes. In return, Mr. Rechnitz had the mayor’s personal cellphone number and email, which he used to invite the mayor to a Knicks game.
At his sentencing, Mr. Rechnitz who now operates a jewelry store in Los Angeles that is frequented by celebrities, told the judge that if he were given a lengthy prison sentence, he doubted that he could “start over a third time.”
Judge Hellerstein cited the Seabrook case in how he determined what sentence to give Mr. Rechnitz. He ordered Mr. Rechnitz to pay $10 million in restitution for the correction officers’ union’s loss.
“All of us do bad things,” the judge said. “Some of those bad things are criminal acts for which we must account.”
Hedge Fund Founder Pleads Guilty To Fraud In Connection With Bribery Of Former Correction Officers Union Leader
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced today the guilty plea of MURRAY HUBERFELD to wire fraud conspiracy in connection with funds used to bribe the former president of the nation’s largest municipal correction officers union. Specifically, HUBERFELD, founder of the Platinum Partners hedge fund (“Platinum”), pled guilty to conspiring with an intermediary, Jona Rechnitz, to cause the fund to pay $60,000 to Rechnitz’s company by falsely representing that the money was payment for courtside tickets to eight New York Knicks basketball games. Instead, as HUBERFELD knew, the actual purpose of the payment was to reimburse Rechnitz for having paid Norman Seabrook, then-president of the Correction Officer’s Benevolent Association (“COBA”), for Seabrook’s efforts to get COBA to invest millions of dollars in Platinum. HUBERFELD pled guilty before U.S. District Judge Alvin K. Hellerstein.
Manhattan U.S. Attorney Geoffrey S. Berman said: “Murray Huberfeld caused his former hedge fund to pay tens of thousands of dollars to a criminal partner in order to enable another crime – paying off the head of the correction officer’s union for the investment of millions of its members’ funds. We will continue to work with our law enforcement partners to fight fraud and corruption.”
According to the Superseding Information, Superseding Indictment, Indictment, and Complaint filed in this case, other public filings, statements made during the plea proceeding, and evidence and testimony presented at trial proceedings in October and November of 2017:
HUBERFELD was the founder of Platinum, a hedge fund that he continued to help operate unofficially even after his formal affiliation with the fund had ceased. In late 2013, HUBERFELD and Rechnitz, a real estate businessman who was an acquaintance of HUBERFELD, sought to attract public and institutional investors to the fund. At or around that time, Rechnitz told HUBERFELD that a contact of his – COBA President Norman Seabrook – would likely invest COBA’s money in Platinum. Over the next few months, Seabrook caused COBA to invest approximately $20 million of its funds into Platinum, including $15 million from a retirement benefits program funded by the City of New York that invests money for correction officers’ retirements.
In or around December 2014, arrangements were made to pay Seabrook personally for the millions of dollars the Union had invested over the course of that year. Rechnitz paid Seabrook $60,000 in cash, delivered to Seabrook in a men’s luxury handbag. HUBERFELD and Rechnitz then arranged for Platinum’s management company to receive a fraudulent invoice for $60,000 – generated by Rechnitz – that, on its face, billed Platinum for eight pairs of courtside tickets to New York Knick games given to Platinum by Rechnitz, who owned Knicks season tickets. In truth, and as HUBERFELD knew, the reason given to Platinum was false, and no Knicks tickets had changed hands. The real purpose of the payment was to reimburse Rechnitz, who had paid Seabrook for his efforts in securing COBA’s investments. Three days later, Platinum issued Rechnitz a $60,000 check.
HUBERFELD, 57, of Lawrence, New York, pled guilty to one count of conspiracy to commit wire fraud. The charge carries a maximum term of five years in prison. HUBERFELD is scheduled to be sentenced on September 14, 2018. The maximum potential penalty is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
Trial against Seabrook, on charges of (i) conspiracy to commit honest services wire fraud, (ii) the substantive offense of honest services wire fraud, and (iii) the substantive crime of wire fraud with respect to COBA’s right to control its assets, is scheduled to commence on July 30, 2018, before Judge Hellerstein. As to Seabrook, the charges in the various charging instruments are merely allegations, and Seabrook is presumed innocent unless and until proven guilty.
Mr. Berman praised the investigative work of the Federal Bureau of Investigation and the New York City Police Department, Internal Affairs Division.
This case is being handled by the Office’s Public Corruption Unit. Assistant United States Attorneys Martin S. Bell, Russell Capone, and Lara Pomerantz are in charge of the prosecution.
Huberfeld Platinum Partners SDNY Indictment by Beverly Tran on Scribd
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