Judge Valerie Caproni sent a powerful message to New York office holders on public corruption, but, will she heed her own wisdom, considering the fact that she was mean to my Sweetie?
"This was corruption pure and simple,” the judge said while sentencing the man who was once one of the three most powerful state officials.
NEW YORK — Former New York Assembly Speaker Sheldon Silver was sentenced Monday to 6 1/2 years in prison in the corruption case that drove him from power as a judge said she hoped to “send a message to Albany.”
U.S. District Judge Valerie E. Caproni sentenced Silver, 76, for the third time, acknowledging that a man who was once one of the three most powerful state officials came closer than ever before to properly expressing remorse.
But she said it remained unclear as to whether “he really gets it,” and she shaved only six months off the seven-year prison sentence she announced in 2018, ignoring claims by Silver’s defense lawyer that he could die if he contracts COVID-19 in prison. She also fined him $1 million.
“This was corruption pure and simple,” Caproni said.
"But, everyone was doing it."
She said she hoped the sentence was “long enough to send a message to Albany,” though she added that the 17 to 22 years in prison called for by federal sentencing guidelines was “draconian.” Caproni said Silver must report to prison Aug. 26.
She described how Silver had changed his statements to her at each sentencing, going from an insistence that he did no harm at his first to a “self-pitying” approach at the second and finally to acknowledging his wrongful conduct this year.
Before Caproni announced the sentence, Silver stood and repeated parts of a handwritten letter he had written to the judge, though not the part in which he told her to spare him a sentence that might cause him to die in prison.
He said he had done a lot of good things over the decades as his power grew in state government, where he spent 21 years as Assembly speaker.
“I destroyed that legacy that I built over 35 years,” he said, blaming his downfall on “improper, selfish and ethically indefensible” behavior that grew from a sense of entitlement.
Last week, Caproni denied Silver’s request to be sentenced remotely because of the coronavirus. Masked spectators were kept apart in a large courtroom which they entered only after undergoing a temperature check and answering COVID-related questions at the courthouse entrance.
Assistant U.S. Attorney Daniel Richenthal urged Caproni to impose the same seven-year sentence she levied for bribery and extortion crimes before a federal appeals court ordered a new sentencing after tossing out three counts.
Silver was ousted as speaker in 2015 and convicted later that year, but appeals have so far kept him out of jail. His original conviction was overturned on appeal but Silver was convicted again in 2018.
In court papers, Silver’s lawyers had asked for leniency, saying Silver was an obese man in his 70s with a history of cancer, chronic kidney disease and other health problems that make him among those most at risk of dying from COVID-19.
Caproni, though, said the death rate of the population outside prison was approaching the death rate inside and it seemed that prisons were improving at adjusting to the threat of the illness.
“I do not want Mr. Silver to die in prison either,” she said.
In the part of the case that survived the appeal process, Silver was convicted in a scheme that involved favors and business traded between two real estate developers and a law firm. Silver supported legislation that benefited the developers. The developers then referred certain tax business to a law firm that paid Silver fees
I bet Boo Boo Barr does not want to start there, or even go there, but have not fear, for the heavens are falling and we are in Detroit.
#maytheheavensfall
DOJ: GHISLAINE MAXWELL CHARGED IN MANHATTAN FEDERAL COURT FOR CONSPIRING WITH JEFFREY EPSTEIN TO SEXUALLY ABUSE MINORS
Maxwell is Alleged to Have Facilitated, Participated in Acts of Abuse
Additionally Charged With Perjury in Connection With 2016 Depositions
Audrey Strauss, the Acting United States Attorney for the Southern District of New York, William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), and Dermot Shea, Commissioner of the New York City Police Department (“NYPD”), announced that GHISLANE MAXWELL was arrested this morning and charged with enticing a minor to travel to engage in criminal sexual activity, transporting a minor with the intent to engage in criminal sexual activity, conspiracy to commit both of those offenses, and perjury in connection with a sworn deposition. The Indictment unsealed today alleges that between at least in or about 1994 through 1997, MAXWELL and co-conspirator Jeffrey Epstein exploited girls as young as 14, including by enticing them to travel and transporting them for the purpose of engaging in illegal sex acts. As alleged, knowing that Epstein had a preference for young girls, MAXWELL played a critical role in the grooming and abuse of minor victims that took place in locations including New York, Florida, and New Mexico. In addition, as alleged, MAXWELL made several false statements in sworn depositions in 2016. MAXWELL is expected to be presented this afternoon in the in federal court in New Hampshire. This case is assigned to U.S. District Judge Alison J. Nathan.
Acting U.S. Attorney Audrey Strauss said: “As alleged, Ghislaine Maxwell facilitated, aided, and participated in acts of sexual abuse of minors. Maxwell enticed minor girls, got them to trust her, and then delivered them into the trap that she and Jeffrey Epstein had set. She pretended to be a woman they could trust. All the while, she was setting them up to be abused sexually by Epstein and, in some cases, Maxwell herself. Today, after many years, Ghislaine Maxwell finally stands charged for her role in these crimes.”
FBI Assistant Director William F. Sweeney Jr. said: “Preserving the innocence of children is among the most important responsibilities we carry as adults. Like Epstein, Ms. Maxwell chose to blatantly disregard the law and her responsibility as an adult, using whatever means she had at her disposal to lure vulnerable youth into behavior they should never have been exposed to, creating the potential for lasting harm. We know the quest for justice has been met with great disappointment for the victims, and that reliving these events is traumatic. The example set by the women involved has been a powerful one. They persevered against the rich and connected, and they did so without a badge, a gun, or a subpoena - and they stood together. I have no doubt the bravery exhibited by the women involved here has empowered others to speak up about the crimes of which they've been subjected.”
NYPD Commissioner Dermot Shea said: “The heinous crimes these charges allege are, and always will be abhorrent for the lasting trauma they inflict on victims. I commend our investigators, and law enforcement partners, for their continuing commitment to bringing justice to the survivors of sexual assault, everywhere.”
If you believe you are a victim of the sexual abuse perpetrated by Jeffrey Epstein, please contact the FBI at 1-800-CALL FBI, and reference this case.
According to the Indictment[1] unsealed today in Manhattan federal court:
From at least 1994 through at least 1997, GHISLAINE MAXWELL assisted, facilitated, and participated in Jeffrey Epstein’s abuse of minor girls by, among other things, helping Jeffrey Epstein to recruit, groom, and ultimately abuse victims known to MAXWELL and Epstein to be under the age of 18. The victims were as young as 14 years old when they were groomed and abused by MAXWELL and Epstein, both of whom knew that their victims were in fact minors. As a part and in furtherance of their scheme to abuse minor victims, MAXWELL and Epstein enticed and caused minor victims to travel to Epstein’s residences in different states, which MAXWELL knew and intended would result in their grooming for and subjection to sexual abuse.
As alleged, MAXWELL enticed and groomed minor girls to be abused in multiple ways. For example, MAXWELL attempted to befriend certain victims by asking them about their lives, taking them to the movies or taking them on shopping trips, and encouraging their interactions with Epstein. MAXWELL also acclimated victims to Epstein’s conduct simply by being present for victim interactions with Epstein, which put victims at ease by providing the assurance and comfort of an adult woman who seemingly approved of Epstein’s behavior. Additionally, to make victims feel indebted to Epstein, MAXWELL would encourage victims to accept offers of financial assistance from Epstein, including offers to pay for travel or educational expenses. MAXWELL also normalized and facilitated sexual abuse by discussing sexual topics with victims, encouraging them to massage Epstein, and undressing in front of a victim.
As MAXWELL and Epstein intended, these grooming behaviors left minor victims vulnerable and susceptible to sexual abuse by Epstein. MAXWELL was then present for certain sexual encounters between minor victims and Epstein, such as interactions where a minor victim was undressed, and ultimately MAXWELL was present for sex acts perpetrated by Epstein on minor victims. That abuse included sexualized massages during which a minor victim was fully or partially nude, as well as group sexualized massages of Epstein involving a minor victim where MAXWELL was present.
As alleged, minor victims were subjected to sexual abuse that included, among other things, the touching of a victim’s breasts or genitals, placing a sex toy such a vibrator on a victim’s genitals, directing a victim to touch Epstein while he masturbated, and directing a victim to touch Epstein’s genitals. MAXWELL and Epstein’s victims were groomed or abused at Epstein’s residences in New York, Florida, and New Mexico, as well as MAXWELL’s residence in London, England.
Additionally, in 2016, while testifying under oath in a civil proceeding, MAXWELL repeatedly made false statements, including about certain specific acts and events alleged in the Indictment.
* * *
GHISLAINE MAXWELL, 58, is charged with one count of enticing a minor to travel to engage in illegal sex acts, which carries a maximum sentence of five years in prison, one count of conspiracy to entice a minor to travel to engage in illegal sex acts, which carries a maximum sentence of five years in prison, one count of transporting a minor with the intent to engage in criminal sexual activity, which carries a maximum sentence of 10 years in prison, one count of conspiracy to transport a minor with the intent to engage in criminal sexual activity, which carries a maximum sentence of five years in prison, and two counts of perjury, each of which carries a maximum sentence of five years in prison.
The statutory maximum penalties are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by the judge.
Ms. Strauss praised the outstanding investigative work of the FBI and the NYPD.
This case is being handled by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Alex Rossmiller, Alison Moe, and Maurene Comey are in charge of the prosecution.
The charges contained in the Indictment are merely accusations. The defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Indictment, and the description of the Indictment set forth herein, constitute only allegations, and every fact described therein should be treated as an allegation. The defendant is presumed innocent unless and until proven guilty.
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Peter C. Fitzhugh, Special Agent in Charge of the Department of Homeland Security’s (“DHS”) Homeland Security Investigations (“HSI”) in New York, and Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), announced today the arrest of TRACY REYNOLDS, a/k/a “Sara,” and IZHAK COHEN, for money laundering and conspiracy to commit money laundering in connection with their ownership and operation of VIP Escorts, a nationwide multimillion-dollar business offering high end prostitution services, as well as the seizure of bank accounts and 391 websites related to the VIP Escorts business. REYNOLDS was arrested this morning at Tampa International Airport while boarding a flight to Mexico and was presented today in Tampa federal court. COHEN was arrested by Israeli authorities in Hadera, Israel. The United States Attorney’s Office will seek COHEN’s extradition to stand trial in the United States.
According to the allegations in the Complaint sworn out in Manhattan federal court:[1]
From at least 2012 to the present, REYNOLDS and COHEN have operated an online high-end prostitution business through their company and its affiliates known as “VIP Escorts.” VIP Escorts maintains a website, http://wvvw.vipescorts.com (the “VIP Escorts Website”), which it used to promote its prostitution services and was registered to COHEN. VIP Escorts also operates an array of affiliated escort websites, which also advertised its prostitution services, with names such as “Prestige Escorts,” “American Escorts,” “Russian Escorts,” and “Manhattan Exotics,” all of which are registered to COHEN.
As part of their prostitution business, REYNOLDS and COHEN arranged for escorts to meet clients in Manhattan and in numerous other locations for prostitution services, charging them thousands of dollars. REYNOLDS and COHEN required escorts to deposit the proceeds of their commercial sex acts into a large number of bank accounts that they controlled, many of them in the name of fake entities. REYNOLDS and COHEN then laundered the money through thousands of domestic and international financial transactions. In total, over $10 million passed through various personal and business accounts controlled by REYNOLDS during the course of this conspiracy, and over $1 million was sent from REYNOLDS in the United States to COHEN in Israel in thousands of small transactions designed to conceal the nature, location, source, ownership, and control of the proceeds.
REYNOLDS and COHEN then used the proceeds of the prostitution scheme for personal gain and to further their illegal prostitution business. They paid, for example, over $295,000 from bank accounts under their control to advertise the VIP Escorts business on a known advertising platform for the prostitution industry.
* * *
REYNOLDS, 45, of Alamosa, Colorado, and Cohen, 53, of Hadera, Israel, are each charged with one count of conspiracy to commit money laundering, which carries a maximum sentence of 20 years in prison, and two counts of money laundering, each of which carries a maximum sentence of 20 years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by the judge.
Mr. Berman praised the outstanding investigative work of HSI, NYPD, and the El Dorado Task Force, and expressed his sincere gratitude to the Israel National Police and the Israel Ministry of Justice for their support and assistance with the investigation. He also thanked the Office of International Affairs of the U.S. Department of Justice for their assistance in the arrest of COHEN.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Michael R. Herman is in charge of the prosecution.
The charge contained in the Complaint is merely an accusation, and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
Natalie Mayflower Sours Edwards Illegally Repeatedly Transmitted SARs and Other Sensitive Government Information To A Reporter Resulting In Approximately 12 News Articles Over 1-Year Period
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that NATALIE MAYFLOWER SOURS EDWARDS, a/k/a “Natalie Sours,” a/k/a “Natalie May Edwards,” a/k/a “May Edwards,” a former senior adviser at the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”), pled guilty today to conspiring to unlawfully disclose Suspicious Activity Reports (“SARs”). EDWARDS pled guilty before United States District Judge Gregory H. Woods.
U.S. Attorney Geoffrey S. Berman said: “As she has now admitted, Natalie Mayflower Sours Edwards, a former senior-level FinCEN employee, abused her position of trust by agreeing to repeatedly disclose highly sensitive information contained in Suspicious Activity Reports. Maintaining the confidentiality of SARs, which are filed by banks and other financial institutions to alert law enforcement to potentially illegal transactions, is essential to permit them to serve their statutory function, and the defendant’s conduct violated the integrity of that critical system and the law.”
According to the allegations contained in the Complaint, Information, publicly available information, court filings, and statements made during the plea proceeding:
The mission of FinCEN is to “safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.”[1] Among other things, FinCEN manages the collection and maintenance of SARs regarding potentially suspicious financial transactions, which, under the Bank Secrecy Act (“BSA”), U.S. financial institutions and other parties are required by law to generate and deliver to FinCEN. Under the BSA and its implementing regulations, willful disclosure of a SAR or its contents by government employees or agents is a felony unless necessary to fulfill official duties.
Beginning in approximately October 2017, and lasting until her arrest in October 2018, EDWARDS agreed to and did unlawfully disclose numerous SARs to a reporter (“Reporter-1”), the substance of which were published over the course of approximately 12 articles by a news organization for which Reporter-1 worked (“News Organization-1”). The illegally disclosed SARs pertained to, among other things, Paul Manafort, Richard Gates, the Russian Embassy, Mariia Butina, and Prevezon Alexander. EDWARDS had access to each of the pertinent SARs and saved them – along with thousands of other files containing sensitive government information – to a flash drive provided to her by FinCEN. She transmitted the SARs to Reporter-1 by means that included taking photographs or images of them and texting the photographs or images to Reporter-1 over an encrypted application. In addition to disseminating SARs to Reporter-1, EDWARDS sent or described to Reporter-1 internal FinCEN emails or correspondence appearing to relate to SARs or other information protected by the BSA, and FinCEN nonpublic memoranda, including Investigative Memos and Intelligence Assessments published by the FinCEN Intelligence Division, which contained confidential personal information, business information, and/or security threat assessments.
At the time of EDWARDS’s arrest, she was in possession of a flash drive on which she saved the unlawfully disclosed SARs, and a cellphone containing numerous communications over an encrypted application in which she transmitted SARs and other sensitive government information to Reporter-1.
* * *
EDWARDS, 41, of Quinton, Virginia, pled guilty to one count of conspiracy to make unauthorized disclosures of SARs, which carries a maximum sentence of five years in prison. EDWARDS is scheduled to be sentenced by Judge Woods on Tuesday, June 9, 2020 at 4:00 p.m. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as the sentence of the defendant will be determined by the judge.
Mr. Berman praised the investigative work of the Treasury Department’s Office of Inspector General and the Federal Bureau of Investigation.
This case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Kimberly J. Ravener, Daniel C. Richenthal, and Maurene R. Comey are in charge of the prosecution.
Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Dermot Shea, the Commissioner of the New York City Police Department (“NYPD”), Keith A. Bonanno, Special Agent in Charge of the Department of Justice Office of the Inspector General (“DOJ OIG”) Cyber Investigations Office, and Guido Modano, Special Agent in Charge of the DOJ OIG New York Field Office, announced today the arrest and filing of charges against FREDERICK L. SCHEININ. The Complaint charges that between October 2019 and January 2020, SCHEININ attempted to produce child pornography and entice a minor to have sex. SCHEININ was arrested yesterday and will be presented later today before U.S. Magistrate Judge Katharine H. Parker in Manhattan federal court.
U.S. Attorney Geoffrey S. Berman said: “As a diversion investigator at the DEA, Frederick Scheinin’s foremost responsibility was to protect the public from illegally diverted drugs. Instead of fulfilling this worthy mission, Scheinin allegedly spent months attempting to prey on a 14-year-old boy. This arrest exemplifies that no one is above the law. Our law enforcement partners will continue to bring all necessary tools to bear to apprehend individuals who wish to do harm to young children, no matter who they are.”
NYPD Commissioner Dermot Shea said: “I want to commend the U.S. Attorney and our federal partners who, together with our NYPD investigators, work every day to protect the innocent against such alleged reprehensible predators. I am proud of the undercover work in this case, which has now led to criminal charges against a law enforcement officer who allegedly betrayed his sacred oath.”
DOJ OIG Cyber Investigations Office Special Agent in Charge Keith A. Bonanno said: “The OIG and our law enforcement partners will thoroughly investigate allegations of abuse or exploitation of children by DOJ employees. Those who are found guilty of this type of criminal behavior will be brought to justice.”
Up until the time of his arrest, SCHEININ was a diversion investigator in the New York Field Office of the Drug Enforcement Administration (“DEA”). According to the allegations in the Complaint filed in Manhattan federal court today[1]:
Between October 2019 and January 2020, SCHEININ used a multimedia messaging application on his cellphone to communicate with an undercover law enforcement officer (“UC‑1”) who was posing as a 14-year-old boy. SCHEININ repeatedly sent sexually explicit images and videos to UC-1 in an attempt to persuade UC-1 to transmit sexually explicit images, photos, and live visual depictions of UC-1 to SCHEININ. In particular, SCHEININ repeatedly asked UC-1 to transmit images and videos of UC-1’s penis. The Complaint further alleges that SCHEININ attempted to arrange a meeting with UC-1 at which SCHEININ planned to have sex with UC-1. Law enforcement arrested SCHEININ yesterday in New York, New York, at a location where SCHEININ said he would meet UC-1. SCHEININ was in possession of condoms and lubricant at the time of his arrest.
SCHEININ, 29, of Sunnyside, New York, is charged with one count of attempted production of child pornography, which carries a mandatory minimum sentence of 15 years in prison and a maximum sentence of 30 years in prison, and one count of attempted enticement of a minor, which carries a mandatory minimum sentence of 10 years in prison and maximum sentence of life in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.
The charges in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
* * *
Mr. Berman praised the outstanding investigative work of the NYPD and the DOJ OIG New York Field Office and Cyber Investigations Office.
The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit. Assistant United States Attorney Nicholas Chiuchiolo is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein constitute only allegations, and every fact described should be treated as an allegation.
You are not my congressman, and while I am ever thankful for that fact, after seeing your performance on Fox News on Wednesday night, I'm not sure you are fit to be anyone's congressman. Specifically, I saw you blithely assert on national television that Democrats "are in love with terrorists. We see that they mourn Soleimani more than they mourn our Gold Star families."
No American is "in love" with terrorists or "mourns" the death of that Iranian general on an airstrip in Baghdad. Many of us do, however, mourn the death of decency, honesty and reason here at home.
I realize that you are a politician and that hyperbolic, hyperpartisan claptrap is the unfortunate fashion of the day. But even allowing for the new normal of nastiness in political rhetoric, your casual slur of countless good Americans hits a new bottom. Americans can, in good faith, differ about the legality or efficacy of killing Soleimani. That doesn't make them unpatriotic or lovers of terrorists. It is hostility to differences of opinion that is un-American.
I understand that politics is a tough racket. I served as a Democratic staffer in the US Senate. I get that terrorism is a threat. I prosecuted terrorists as a United States attorney, working just yards from Ground Zero. I know of the particular evil posed by Qasem Soleimani. My office prosecuted plots orchestrated by him and the Quds Force, including the conspiracy to assassinate the Saudi ambassador to the United States in 2011.
So, I have some idea of what is at stake here when it comes to terrorism. As you well know, Congressman, terrorists do not kill Republicans or Democrats. They kill Americans.
You know what else is true? The prosecutors, law enforcement agents and intelligence officers who keep us safe from terrorism do not do so as Republicans or Democrats. They do so as Americans. The victims of terrorism — and their families — do not grieve as members of a political party. They do so as Americans.
You are not a talk radio host or a carnival barker. You are a pastor, an attorney and a sitting member of Congress. Therefore, the evidence would suggest you should know better. To utter such garbage, which you know to be false and defamatory, goes against all the training and teaching you must have received. But you got your cheap shot across, and perhaps that's all that matters to you.
To be clear, Congressman, I am not making some old and familiar naive call for a return to "civility" in our politics. I don't have much hope for that in the immediate future. I just want people like you to knock off the worst scurrilous nonsense. I'd hope that would be possible for a member of the House who happens to be the ranking member on the Judiciary Committee.
If we are going to come together, protect the homeland and heal the hearts of people who have suffered the scars of terrorism, we need our leaders to do better than lazy trash talk.
Learn that volume and wisdom are not the same thing.
You were elected to lead. Please give it a try.
Respectfully,
Preet Bharara
Who is running against this craven un-American ignorant asshole named Doug Collins? I will max out to you tomorrow. I hope you all join me. https://t.co/AREc1pvjdX
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?
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
Jona Rechnitz, center, made large donations to the campaigns and causes of Mayor Bill de Blasio, right, as a way to gain access.
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
Jeremy Reichberg, center, was Mr. Rechnitz’s partner; he was convicted earlier this year on bribery and conspiracy charges.
“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.
Defendant Conspired to Steal Sensitive Personally Identifying Information from Victim Companies and Release those Records on Criminal Marketplaces unless Victims Paid Bitcoin Ransoms
A United Kingdom national appeared today in federal court on charges of aggravated identity theft, threatening to damage a protected computer, and conspiring to commit those and other computer fraud offenses, related to his role in a computer hacking collective known as “The Dark Overlord,” which targeted victims in the St. Louis, Missouri, area beginning in 2016.
Nathan Wyatt, 39, was extradited from the United Kingdom to the Eastern District of Missouri and arraigned on Dec. 18 before U.S. Magistrate Judge Shirley Padmore Mensah. He pleaded not guilty and was detained pending further proceedings.
A federal grand jury indicted Wyatt on Nov. 8, 2017. According to court records, beginning in 2016, Wyatt was a member of The Dark Overlord, a hacking group that was responsible for remotely accessing the computer networks of multiple U.S. companies without authorization, obtaining sensitive records and information from those companies, and then threatening to release the companies’ stolen data unless the companies paid a ransom in bitcoin. Victims in the Eastern District of Missouri included healthcare providers, accounting firms, and others. Among other things, Wyatt is alleged to have participated in the conspiracy by creating email and phone accounts that he used to send threatening and extortionate emails and text messages to certain victims, including victims in the Eastern District of Missouri.
“Today’s extradition shows that the hackers hiding behind The Dark Overlord moniker will be held accountable for their alleged extortion of American companies,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division. “We are thankful for the close cooperation of our partners in the United Kingdom in ensuring that the defendant will face justice in U.S. court.”
“Cyber criminals who harm victims in the Eastern District of Missouri cannot hide behind international borders to evade justice,” said U.S. Attorney Jeffrey B. Jensen of the Eastern District of Missouri. “Today’s case demonstrates the United States’ commitment to unmasking criminal hackers and bringing them to justice, no matter where they may be located.”
“Cyber hackers may no longer use territorial borders to shield themselves from accountability,” said Special Agent in Charge Richard Quinn of the FBI’s St. Louis Field Office. “This case is another example of how the FBI successfully works with international law enforcement partners to bring alleged perpetrators to justice.”
The investigation was conducted by the FBI’s St. Louis Field Office. The FBI’s Atlanta Field Office also provided support. The Criminal Division’s Office of International Affairs coordinated the extradition of Wyatt. The department thanks law enforcement and international cooperation authorities in the United Kingdom for their substantial assistance in the investigation.
Senior Counsel Laura-Kate Bernstein of the Criminal Division’s Computer Crime and Intellectual Property Section, and Assistant U.S. Attorneys Gwendolyn Carroll and Matthew Drake of the Eastern District of Missouri are prosecuting the case.
The details contained in the charging document are allegations. The defendant is presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
Another "Elected One of the Fashion Show Selfies" to celebrate in February.
Former New York City Police Department Officer and Supervisory Committee Member Also Charged With Embezzlement, Fraud, and Controlled Substance Offenses
Sylvia Ash
Geoffrey S. Berman, United States Attorney for the Southern District of New York, announced today that SYLVIA ASH, presiding judge of the Kings County Supreme Court, Commercial Division, and former chair of the board of directors of Municipal Credit Union (“MCU”), was charged in Manhattan federal court with conspiracy to obstruct justice and obstruction of justice, arising from a scheme to seek to influence and impede an ongoing federal investigation into fraud and corruption at MCU, a non-profit, multibillion-dollar financial institution. U.S. Attorney Berman also announced today that Joseph Guagliardo, a/k/a “Joseph Gagliardo,” a former New York City Police Department Officer and former member of MCU’s supervisory committee, was charged separately with embezzlement, fraud, and controlled substance offenses arising from abuse of his position as a member of the supervisory committee. Guagliardo was arrested in Brooklyn, New York, yesterday afternoon and was presented before U.S. Magistrate Judge Ona T. Wang in Manhattan federal court. ASH was arrested at LaGuardia Airport this morning and is expected to appear before Magistrate Judge Wang in Manhattan federal court this afternoon.
U.S. Attorney Geoffrey S. Berman said: “The charges announced today reflect the latest in our ongoing work to uncover criminal conduct at the highest levels of MCU, a multibillion-dollar, federally insured credit union. As alleged, Sylvia Ash, a sitting state court judge, took repeated steps to obstruct a federal investigation into significant financial misconduct at MCU during Ash’s tenure as chair of the board of directors. Joseph Guagliardo allegedly abused his position as an MCU supervisory committee member to enrich himself and his family.”
According to the allegations contained in the two Complaints unsealed today in Manhattan federal court, publicly available information, and prior court filings:[1]
Municipal Credit Union
MCU is a non-profit financial institution headquartered in New York, New York, which is federally insured by the National Credit Union Administration (“NCUA”). MCU is the oldest credit union in New York State and one of the oldest and largest in the country, providing banking services to more than 500,000 members, and with more than $2.9 billion in member accounts, each of which is federally insured for at least $250,000 by the National Credit Union Share Insurance Fund, which is administered by the NCUA. Membership in MCU is generally available to employees of New York City and its agencies, employees of the federal and New York state governments who work in New York City, and employees of hospitals, nursing homes, and similar facilities located within New York State.
At all relevant times, MCU was supposed to be overseen by a board of directors (the “Board”) and a supervisory committee (the “Supervisory Committee”), each of which was composed of volunteer members of MCU, who were not to be compensated. According to New York banking law, the Supervisory Committee’s duties included supervision of the actions of MCU’s Board and officers. MCU’s written conflict of interest policy, which was regularly distributed to Board members, Supervisory Committee members, and others, provided, among other things, that members of MCU’s “Board of Directors and Supervisory Committee may not do business with the Credit Union, either individually or as representative of any business entity.”
ASH
ASH is a New York State Supreme Court Justice in Kings County. ASH has served as a judge in the New York State court system since at least approximately 2006, first as a Kings County Civil Court Judge, and, commencing in 2011, as a Kings County Supreme Court Justice. In or about January 2016, ASH was appointed to be the presiding judge in the Kings County Supreme Court’s Commercial Division.
ASH served on MCU’s Board from in or about May 2008 until on or about August 15, 2016, when she resigned. ASH also served as a trustee of MCU’s pension plan, a position from which she resigned on or about October 31, 2016. From in or about May 2015 until her resignation from the Board, ASH served as the chair of the Board.
GUAGLIARDO is a former officer with the New York City Police Department, who retired in or about 1989. In or about 1993, GUAGLIARDO joined the Supervisory Committee of MCU, a volunteer position, and remained in that position until he was removed from that position by the New York State Department of Financial Services on or about May 24, 2018, except for a brief period of time when he served as a member of MCU’s Board in or about 2008. While he was a Supervisory Committee member, GUAGLIARDO sought to and did use his position to oversee aspects of MCU’s security and fraud department, including serving in the role of vice president of MCU’s security and fraud department while that position was vacant.
Kam Wong
From on or about at least 2007 until on or about June 12, 2018, Kam Wong served as MCU’s chief executive officer (“CEO”) and president. On or about May 8, 2018, Wong was charged and arrested by the United States Attorney’s Office for the Southern District of New York, and, on or about June 12, 2018, Wong was terminated by MCU. On or about December 2, 2018, Wong pled guilty to a multimillion-dollar embezzlement from MCU, and acknowledged, in his written plea agreement, among other things, endeavoring to obstruct and impede and obstructing and impeding the administration of justice with respect to the criminal investigation into this matter, and agreeing with one or more others to do the same.
ASH’s Alleged Obstruction of Justice
From at least in or about 2012 through 2016, while serving as an MCU Board member and while Wong was CEO, ASH received annually tens of thousands of dollars in reimbursements and other benefits from MCU, including airfare, hotels, food and entertainment expenses for her and a guest to attend conferences domestically and abroad, as well as payment for phone and cable bills, and electronic devices. Even after her resignation from the Board, Wong continued to provide or cause MCU to provide ASH with benefits, such as Apple devices.
In or about January 2018, after Wong had been approached by federal law enforcement agents investigating potential financial misconduct by Wong involving MCU and in an attempt to protect Wong, ASH agreed to and did sign a false and misleading memorandum purporting to explain and justify millions of dollars in payments that Wong had received from MCU, which was then provided by Wong to law enforcement officers.
Subsequently, ASH agreed to and did continue to seek to influence and impede the federal investigation in multiple ways, including by (i) concealing and deleting relevant text messages and email messages and wiping her MCU-issued Apple iPhone in a further effort to destroy and impair the availability of evidence that had been sought by federal grand jury subpoenas, and (ii) making false and misleading statements to federal law enforcement officers in interviews conducted as part of a federal criminal investigation.
GUAGLIARDO’s Alleged Embezzlement, Fraud, and Unlawful Provision of Controlled Substances to Wong
GUAGLIARDO engaged in a long-running scheme to defraud MCU, with the agreement and assistance of, among others, Wong. Among other things, GUAGLIARDO defrauded and embezzled from MCU by causing it to direct more than $250,000 to a purported security company created and controlled by GUAGLIARDO, but operated in another’s name, which did little to no real work for MCU. GUAGLIARDO also defrauded and embezzled from MCU by over-billing for more than $200,000 for purported web advertising services provided by a non-profit organization that GUAGLIARDO also controlled.
In addition, during substantially the same period in which GUAGLIARDO was committing and concealing these offenses, GUAGLIARDO participated in a scheme to unlawfully distribute controlled substances to Wong, in the form of prescription drugs, some of which were obtained from GUAGLIARDO’s spouse, who worked as a doctor affiliated with a public hospital, and some of which were obtained from a doctor affiliated with the New York City Police Department.
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ASH, 62, of Brooklyn, New York, is charged with one count of conspiracy to obstruct justice, which carries a maximum penalty of five years in prison; and two counts of obstruction of justice, each of which carries a maximum penalty of 20 years in prison.
GUAGLIARDO, 62, of Brooklyn, New York, is separately charged with one count of conspiracy to embezzle from a federal credit union, which carries a maximum penalty of five years in prison; one count of embezzlement, one count of conspiracy to defraud a financial institution, and one count of defrauding a financial institution, each of which carries a maximum penalty of 30 years in prison; and one count of conspiracy to distribute controlled substances, and one count of distribution of controlled substances, each of which carries a maximum penalty of 20 years in prison.
The maximum potential sentences in these cases are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
U.S. Attorney Berman praised the outstanding work of the Special Agents of the United States Attorney’s Office. Mr. Berman also thanked the New York County District Attorney’s Office, the New York State Department of Financial Services, and the New York City Police Department Internal Affairs Bureau for their assistance.
The case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Eli J. Mark and Daniel C. Richenthal are in charge of the prosecution, with assistance of Special Assistant U.S. Attorney Alona Katz from the New York County District Attorney’s Office.
The charges contained in the Complaints are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaints, and the description of the Complaints set forth herein, constitute only allegations, and every fact described therein should be treated as an allegation.
