Correction union boss, hedge fund founder face fraud charges

And so it begins: Norman Seabrook, the influential head of the New York City corrections’ officers union was arrested Wednesday morning on federal fraud charges, reports the New York Times.

Huberfeld is accused of participating in a scheme to hand out hundreds of thousands of dollars in kickbacks to Seabrook in exchange for investments in his fund, Platinum Partners, L.P., according to the complaint.

The FBI also arrested Murry Huberfeld, who once ran an investment fund that was involved with the union’s pensions.

Seabrook was introduced to Huberfeld on December 13, 2013 by a man sources familiar with the case identify as Jonah Rechnitz, a borough park fundraiser for Mayor de Blasio.

A 17-page criminal complaint unsealed Wednesday morning in the Southern District of NY charges Seabrook and Huberfield with one count each of honest services fraud and one count of conspiracy to commit honest services wire fraud.

The criminal complaint refers to a “cooperating witness” who has pleaded guilty and is helping the government in the hopes of a reduced sentence.

As part of the arrangement, court papers indicated that Seabrook was expected to receive between $100,000 and $150,000 for transferring more than $20 million in pension fund wire transfers to Platinum from November 2013 through 2015, the New York Daily News stated. A lawyer for Rechnitz didn’t return a request for comment Wednesday.

In 2013, CW-1, Seabrook, a police officer and others took two trips to the Dominican Republic. Several state and federal agencies are pursuing overlapping investigations into de Blasio’s fundraising, including his efforts on behalf of state Senate Democrats in 2014. Investigators searching Seabrook’s home recovered the luxury bag and 10 pairs of Ferragamo shoes, prosecutors said.

It wasn’t the first time Rechnitz offered Seabrook lavish gifts, according to the complaint.

De Blasio’s office is now in the midst of a separate investigation looking into his fundraising campaign, and the Mayor has not been connected to Seabrook’s arrest.

The FBI confirmed that Norman Seabrook and Murray Huberfeld, the founder of a New York-based hedge fund, were arrested early Wednesday.

“If we had any inkling this is the kind of human being he was”, de Blasio said, “I never would’ve gone near him”.

It says Huberfeld used an intermediary to pay Seabrook an initial kickback of $60,000 in cash.