Sunday, November 20, 2016

Rechnitz the Rat, Seabrook

Fed Rat in de Blasio Investigation Wanted Hedge Ponzi Schemer to Make Him as Insurance Beneficiary
Star witness in NYPD bribe case wanted pal to name him as insurance beneficiary (NYP) Jona Rechnitz, the feds’ star witness in the NYPD corruption scandal, pestered a troubled pal to take out nearly $5 million in life insurance — and name him as the beneficiary, sources told The Post.  The financially struggling friend, Hudson River Cafe owner Hamlet Peralta, 37, worried that Rechnitz wanted to have him killed to collect on the money he owed him, sources said.  “I’m working day and night to produce and pay [Rechnitz] every dollar,” Peralta insisted to Rechnitz’s lawyer in an October 2014 ­e-mail. “Please calm Jona.   “I don’t want to get killed in the last hour.”  But a person with direct knowledge of Rechnitz’s insurance push insisted that the real-estate developer was merely making an educated bet that something might happen to Peralta because he owed so many people money.  “He was concerned Hamlet would get killed by somebody because he was caught up in a lot of bad stuff,” the source said. “If [Peralta] was going to get killed by somebody, then Jona is out a lot of money. He wanted to protect his interests.” Peralta was arrested in April for allegedly scamming a dozen people out of $12 million in a Ponzi scheme that centered around a fake wholesale liquor business.  Rechnitz had invested roughly $3 million with Peralta in the form of short-term loans at the time, sources said.  When the money was flowing, the two men had a great relationship and traveled together, including on a 2013 trip with former NYPD Chief of Department Philip Banks III and Rechnitz’s businessman pal, Jeremy Reichberg.   Banks’ relationship with Rechnitz has been eyed in the police pay-to-play scandal, and Reichberg already has been charged in the debacle.


Jona S. Rechnitz has pleaded guilty to fraud conspiracy charges. CreditBaruch Ezagui

Of all the charges and the allegations in a 17-page criminal complaint accusing a powerful New York City union leader of corruption, perhaps the most far-reaching development was woven into the legal boilerplate, essentially hiding in plain sight.
A person, referred to as “CW-1,” for Cooperating Witness 1, had agreed to cooperate with federal prosecutors and the Federal Bureau of Investigation.
The cooperator’s name was not mentioned in the complaint unsealed on Wednesday, but several people with knowledge of the matter said it was Jona S. Rechnitz, a central figure in one of the half-dozen continuing federal corruption investigations focused on Mayor Bill de Blasio’s fund-raising.
Mr. Rechnitz, who has generously supported several of Mr. de Blasio’s interests and served on the mayor’s inaugural committee, has pleaded guilty to fraud conspiracy charges in connection with the corruption case against Norman Seabrook, the influential leader of the union that represents the city’s correction officers, and another defendant, according to the complaint.
Continue reading the main story
But the significance of his decision to join the roster of government witnesses could go far beyond the case against the union leader, and have wide-ranging consequences for Mr. de Blasio.
The complaint in the corruption case, along with statements by Preet Bharara, the United States attorney for the Southern District of New York (whose office brought it), and interviews with people with knowledge of the fund-raising inquiries, strongly suggest that Mr. Rechnitz could serve as an important witness in at least one of the fund-raising matters.
At a news conference on Wednesday announcing the charges against Mr. Seabrook, Mr. Bharara declined to answer questions about the identity of CW-1 and the degree to which the witness could be helpful in other cases.
But he noted that “the complaint does say that he is assisting other investigations as well; that’s all I’ll say.”
Almost all of the fund-raising investigations are being conducted by the same group of F.B.I. agents and federal prosecutors — two squads of agents known as C4 and C14 and the prosecutors in Mr. Bharara’s public corruption unit — that handled the case against Mr. Seabrook, who was arrested along with Murray Huberfeld, a hedge fund financier.
While Mr. Bharara also declined to answer questions about the fund-raising inquiries during the news conference, he left little doubt that there were more public corruption cases on the horizon.
“As those of you who come here often appreciate, it is seldom the case that the bringing of a particular charge at a particular date is the end of the matter,” he said. “We’re still investigating lots of different things, and you should expect to see me again.”
The accusations in the complaint do not involve Mr. de Blasio, nor are they related to any of the possible improprieties that are under scrutiny in the more than half a dozen inquiriesswirling around the mayor and his aides. Mr. de Blasio, a Democrat, has steadfastly defended his fund-raising efforts.
However, the complaint notes that Mr. Rechnitz has pleaded guilty in connection with the corruption case, “among other things,” and is “providing information to the government in the hopes of obtaining leniency when he is sentenced.”
It also says that Mr. Rechnitz has undergone “extensive debriefings,” and that the information he has provided has been “reliable and corroborated by independent evidence.”
A lawyer for Mr. Rechnitz, Alan Levine, declined to comment.
Investigators and others briefed on the matter have said the fund-raising inquiry that had once been focused on Mr. Rechnitz now centers on whether city officials provided him with some benefit for his real estate business in exchange for campaign contributions.
The development represented a stark turn of fate for Mr. Rechnitz, 33, who came to New York from Los Angeles to build things: condominiums, hotels and the like. But as he gained a footing in the city, he found that it was easier to build relationships, often founded on money.
He and another businessman, Jeremiah Reichberg, who also raised money for the mayor and served on the committee that planned his 2014 inaugural celebration, spent a good deal of time cultivating roughly a score of senior police officials, lavishing some with gifts and trips.
Mr. Reichberg, according to people briefed on the matter, is the man identified in the criminal complaint as Co-Conspirator 1 or CC-1, and also was involved in the alleged scheme, although he was not charged.
The complaint details a series of trips to the Dominican Republic, Israel and elsewhere that Mr. Seabrook took with Mr. Rechnitz, Mr. Reichberg and a top police official. All were paid for by Mr. Rechnitz.
The investigation has so far uncovered misconduct by nearly a dozen mostly senior police officials, including five chiefs who have filed for retirement as a result, and a number of other senior officials, who have been transferred to administrative posts pending possible discipline. One detective has been fired.
Few of them are likely to be happy about their interactions with Mr. Rechnitz. Indeed, they may share the feelings Mr. de Blasio expressed on Wednesday, which seemed to tumble out when a reporter asked about his connection to the businessman.
“I wish I never met the guy,” the mayor said.
Correction: June 11, 2016 
An article on Thursday about Jona S. Rechnitz, a cooperating witness in a corruption case against the correction officers union leader and a central figure in one of the corruption investigations focused on Mayor Bill de Blasio’s fund-raising, misstated Mr. Rechnitz’s age. He is 33, not 26. The article also omitted a group of F.B.I. agents who are investigating some of the fund-raising issues. Besides the F.B.I. squad known as C14, a squad called C4 is also part of the inquiry.

Seabrook's Hedge-Fund Head Indicted for Running A Ponzi Scheme Seabrook Introduced to Hedge by Rechnitz who is Also A Fed Witness  

Hedgie busted in $1B fraud scheme (NYP)  A hedge-fund honcho with ties to disgraced city correction-union boss Norman Seabrook tried to flee to Israel with his family after perpetuating a $1 billion fraud, according to a federal indictment unsealed Monday. Mark Nordlicht, the chief investment officer for Platinum Partners, sent a desperate e-mail Dec. 13 to an unnamed accomplice, identified in court papers as “Co-Conspirator 1,” stating, “Am on my way to jfk with kids for their 6 pm flight it Israel. [Co-Conspirator 2] ducking my calls … [My wife] is literally making me get on an Israel flight if we don’t connect and agree on what we are doing,” the indictment charges. “Co-Conspirator 1” had earlier e-mailed Nordlicht, saying, “Don’t forget books. Assume we are not coming to ny[.] Just to be safe. Depends on Miami[.] we can fly straight [sic] to Europe from Miami on Tuesday[.] Take passport,” the papers allege. Nordlicht was busted at his New Rochelle home and slapped with a slew of charges, including securities fraud and conspiracy to commit wire fraud.  Six other executives were also arrested, including David Levy, Platinum Partners’ co-chief investment officer, and Uri Landesman, the former president of the firm’s signature fund. But this year, a series of investigations tied to Platinum Partners came to a head, leading to a Cayman Islands court placing its two main funds into liquidation in August.  Seabrook, the former union leader for New York City’s jail guards, has pleaded not guilty to charges that he accepted a $60,000 bribe in 2014 in exchange for investing $20 million of union money with Platinum Partners.”* Hedge Fund Execs Linked to City Corruption ScandalCharged in $1B Scam (dnainfo) * Hedge Fund Execs Linked to City Corruption Scandal Charged in $1B Scam (DNAINFO) “What Platinum Partners did is they hatched a scheme to have those proceeds diverted to them as opposed to the bond holders who were first in line to be paid.”  Huberfeld allegedly bribed the former head of the city's correction officers' union, Norman Seabrook, with more than $60,000 in cash in January 2014. In return, Seabrook invested more than $20 million of the union’s pension money into a struggling fund within Platinum Partners, federal prosecutors said.  Huberfeld is believed to have met Seabrook through Brooklyn businessman Jona Rechnitz, a major donor to Mayor Bill de Blasio’s campaign who is also ensnared in the corruption probe and is currently cooperating with investigators.

Jona Rechnitz, a Brooklyn real-estate investor who is a focus of a federal corruption probe, referred New York’s correction officers’ union to Platinum Partners (WSJ)

FBI probe finds NYPD traded services for Super Bowl tickets, luxe trips (NYP) The feds are looking into whether high-ranking NYPD officers then received gifts as part of an illegal quid pro quo — including jaunts to the Super Bowl, China, London, Brazil and Rome, and golfing trips to the Dominican Republic, sources said. The suspected corruption surfaced during a separate financial investigation into Mayor Bill de Blasio cronies Jona Rechnitz, an Upper West Side real estate powerhouse, and Jeremy Reichberg, a prominent figure in Borough Park, Brooklyn, the sources said. Rechnitz is “always bragging about his relationship with the cops, how he knows everyone,” a former work associate said. Reichberg “likes to talk about himself and drop names of people he knows. He likes to brag,’’ a law enforcement source said. “He drops names to the cops that he knows Mayor de Blasio and [former NYPD Chief of Department Philip] Banks. He thinks he’s a big shot because of his so-called connections,” the source added. “I don’t know why these [cops] got friendly with him.’’ Banks and his buddy, corrections officers union chief Norman Seabrook, were the first law enforcement officials to come on the feds’ radar, sources said. A source said Seabrook is suspected of using Rechnitz’s JSR Capital LLC to invest union money without board approval.

Federal Rat Rechnitz in $3000 Seat at World Series Could Soon Take Down Pay to Play de Blasio 
Shady witness in NYPD corruption probe spotted at World Series (NYP) The feds’ key witness in the NYPD corruption scandal was living it up at the World Series — where a TV camera caught him rooting for the Cleveland Indians in a prime seat behind home plate at Wrigley Field Sunday night. Crooked real-estate developer Jona Rechnitz was wearing an Indians cap and was linked arm-in-arm with a fellow Cleveland fan as they hoped in vain for victory against the Chicago Cubs. Rechnit​z pleaded guilty to bribing high-ranking cops and the former head of the correction-officers union and agreed to testify against them. His good fortune left some cops fuming.* Shomrim leader in NYPD corruption probe says he’s a drunk (NYP)

Fed Rat Rechnitz: "I got the Mayor on Lock Down for OMB Top Job"
Shady donor brags he’s ‘got the mayor on lockdown’ after calling in ‘favor’ (NYP) Mayor de Blasio gave a retired NYPD official a plum post in his administration after getting a call from a shady businessman who told Hizzoner the appointment would be a personal favor, The Post has learned. During a conversation with de Blasio, Jona Rechnitz noted that he hadn’t asked for much since forking over huge contributions to de Blasio’s mayoral campaign, personal charity and Democratic allies, sources said Rechnitz, a crooked real-estate developer who’s now a key cooperating witness in the NYPD corruption scandal, later bragged to his associates that “I’ve got the mayor on lockdown,” sources said.  Ex-Chief of Department Joseph Esposito scored the gig atop the Office of Emergency Management — which pays $220,000 a year — despite having testified in federal court in support of the NYPD’s “stop and frisk” policy, which de Blasio ran against and rolled back upon taking office.   Rechnitz called de Blasio directly, using his cellphone while inside the 1 Police Plaza office of then-Chief of Department Philip Banks III, sources said.  Rechnitz put the phone on speaker so Banks, then-Deputy Chief Michael Harrington and Rechnitz crony Jeremy Reichberg could listen in, sources said.  Rechnitz donated $50,000 to the de Blasio’s since-suspended Campaign for One New York charity — which is under state and federal investigation — and he and his wife also gave de Blasio the maximum total of $9,900 for his 2013 mayoral campaign. In addition, Rechnitz kicked in the maximum $102,300 toward a failed effort, spearheaded by the mayor, to help Democrats win control of the state Senate in 2014.  Reichberg donated the maximum $4,950 to de Blasio’s campaign and bundled another $41,650 in political contributions for him. Reichberg is charged with providing some of those payoffs, and with helping arrange for a hooker to accompany him, Rechnitz, and two cops on an infamous 2013 trip to Las Vegas for Super Bowl XLVII. Rechnitz has pleaded guilty to his role in those schemes and another involving the since-ousted head of the correction-officers union, and is cooperating with the feds in a bid for leniency. Rechnitz donated $50,000 to the de Blasio’s since-suspended Campaign for One New York charity — which is under state and federal investigation — and he and his wife also gave de Blasio the maximum total of $9,900 for his 2013 mayoral campaign. In addition, Rechnitz kicked in the maximum $102,300 toward a failed effort, spearheaded by the mayor, to help Democrats win control of the state Senate in 2014.  Reichberg donated the maximum $4,950 to de Blasio’s campaign and bundled another $41,650 in political contributions for him. Reichberg is charged with providing some of those payoffs, and with helping arrange for a hooker to accompany him, Rechnitz, and two cops on an infamous 2013 trip to Las Vegas for Super Bowl XLVII. Rechnitz has pleaded guilty to his role in those schemes and another involving the since-ousted head of the correction-officers union, and is cooperating with the feds in a bid for leniency.* * As New York City Mayor Bill de Blasio’s re-election campaign approaches, a mapping tool shows the campaign has shifted toward receiving smaller contributions from many parts of the city, in contrast to the way he raised money last year, the Times reports.

Vinny the Chin de Blasio Does Not Remember Rechnitz's Money or Hug
‘Lockdown’ brag should jostle ‘know-nothing’ de Blasio’s memory (NYP) The mayor took the call, which right there blows the walls off his claim that he didn’t really know Jona Rechnitz.  Nor did he, as best we can tell, bristle at Rechnitz’s request (“I haven’t asked for much”) to name NYPD Chief of Department Joe Esposito as the next head of the Office of Emergency Management. No, Mayor de Blasio soon gave Esposito the job. Rechnitz had given big to de Blasio’s campaign, to his  inaugural fund and more. He’d keep giving — the mayor wanted donations to his drive to turn the state Senate Democratic — after he got what he asked.  And he told associates, “I’ve got the mayor on lockdown” — which it sure seems he did. Rechnitz apparently made the call on his cell from the office of then-Chief of Department Phillip Banks III — on speaker, so Banks and then-Deputy Chief Michael Harrington, as well as Jeremy Reichberg (a Rechnitz crony who also gave to de Blasio Inc.) could listen in. Esposito looks clean, unlike everyone else in this sordid affair — a straight shooter who testified in court in support of the stop-and-frisk policies that de Blasio made his political bones attacking. Who wanted the good cop moved out of the way, and why? Maybe US Attorney Preet Bharara’s figured it out; expect to learn more from the indictments, when and if they roll down. Banks hasn’t been charged in any crime. But he quit, rather than accept a promotion to No. 3 in the department, about a year later — apparently because he’d learned the feds were looking into the hundreds of grand that mysteriously had popped into his bank accounts, and his ties to Rechnitz and Reichberg. Everyone else in that room does face charges, on bribery as it happens — with Rechnitz, at least, turning state’s evidence. As for de Blasio, well: After Rechnitz and Reichberg’s arrest, he said, “I know of no favorable municipal action they got.” Maybe today’s Post will refresh your memory, Mr. Mayor. * De Blasio in video with accused in corruption probe (WNEW)
Bubble Mayor No Town Hall de Blasio Spins and the NYC Press Defining Journalism Down

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