Hedge Fund Founder Sentenced To 30 Months 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 that MURRAY HUBERFELD was sentenced to 30 months in prison for his role in a scheme to submit false paperwork to Platinum Partners (“Platinum”), a hedge fund founded by HUBERFELD, in order to facilitate a bribe to Norman Seabrook, the former president of the nation’s largest municipal correction officers union.  HUBERFELD previously pled guilty to conspiring to commit wire fraud and thereby causing Platinum to fund a $60,000 bribe payment to Seabrook, which HUBERFELD intentionally concealed by falsely documenting the payment as one for courtside tickets to New York Knicks basketball games.  As a result of the bribe, Seabrook caused the investment of millions of dollars of union funds into Platinum. Today’s sentence was imposed by U.S. District Judge Alvin K. Hellerstein.

Manhattan U.S. Attorney Geoffrey S. Berman said:  “Not content with being a successful businessman, Murray Huberfeld sought to grow his fund through fraud and deception, playing a critical role in a pernicious kickback scheme.  His conduct was not only corrupt and criminal, but led to the loss of millions of dollars of union retirement benefits.  The sentence imposed today reflects the magnitude of his crimes and untold pain his conduct caused to others.”

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 the fall of 2017 and the summer of 2018:

HUBERFELD was a founder of Platinum, a hedge fund that he had founded and continued to control unofficially even after his formal affiliation with the fund had ceased.  In late 2013, HUBERFELD and Jona Rechnitz, an acquaintance and real estate businessman, sought to attract public and institutional investors to the fund.  In late 2013, Rechnitz told HUBERFELD that a contact of his – Norman Seabrook president of the Correction Officers’ Benevolent Association (“COBA” or the “Union”) – would likely invest COBA money in Platinum if HUBERFELD were willing to pay Seabrook money.  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 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 arranged for Platinum’s management company to receive a fraudulent invoice for $60,000 – generated by Rechnitz – that, on its face, billed Platinum for seven 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.  Over the next few months, Rechnitz, HUBERFELD, and Jeremy Reichberg, another co-conspirator, continued to work together to lobby Seabrook for more money.  However, after a lawsuit filed by a former COBA board member referred to the Platinum investments, and the U.S. Attorney’s Office grand jury investigation resulted in subpoenas to Platinum and COBA in May 2015, no further investments were made.  Ultimately, Platinum collapsed, and COBA lost $19 million of its investment.

Seabrook was convicted of honest services fraud and conspiracy on August 18, 2018, after a 10-day trial in Manhattan federal court.  On February 8, 2019, Judge Hellerstein sentenced Seabrook to 58 months in prison and ordered him to pay restitution in the amount of $19 million.

On January 2, 2019, Reichberg was found guilty of honest services fraud, conspiracy, and obstruction of justice in connection with a separate scheme in which he and Rechnitz provided gifts and benefits to a number of high-level officers of the New York City Police Department (“NYPD”) in exchange for official police action for themselves and their associates.  He is due to be sentenced by U.S. District Judge Gregory H. Woods on April 4, 2019.

In addition to the prison term, HUBERFELD, 58, of Lawrence, New York, was sentenced to three years of supervised release, and ordered to pay restitution in the amount of $19 million.

Mr. Berman praised the investigative work of the Federal Bureau of Investigation and the NYPD Internal Affairs Division.

Individual Charged In White Plains With Murder Of 24-Year-Old Victim - Valerie Reyes

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, Anthony A. Scarpino, Jr., the Westchester County District Attorney, William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Joseph F. Schaller, Commissioner of the New Rochelle Police Department, and James J. Heavey, Town of Greenwich Chief of Police, announced today the arrest of JAVIER ENRIQUE DA SILVA ROJAS (the “defendant” or “Da Silva”), who was charged by complaint with the kidnapping of Valerie Reyes (the “Victim”) in New Rochelle, New York, and unlawfully transporting her to Greenwich, Connecticut.  The defendant was arrested in Flushing, Queens, on February 11, 2019, and was presented in White Plains federal court before the U.S. Magistrate Judge Lisa Margaret Smith today. 

U.S. Attorney Geoffrey S. Berman said:  “As alleged, Javier Da Silva is charged with committing a gruesome kidnapping that resulted in the death of a young woman.  Thanks to the excellent work of the FBI and its local law enforcement partners, Da Silva will need to answer for his alleged actions in court.”  

District Attorney Anthony A. Scarpino, Jr. said:  “From the start of this investigation into the death of Valerie Reyes, the Westchester County District Attorney’s Office has worked closely with Greenwich and New Rochelle Police Departments and the Connecticut State’s Attorney.  The Assistant District Attorney and investigators assigned to the case worked tirelessly in an effort to bring swift justice for the victim of this horrendous crime and her family here in Westchester.  We will continue to work with our law enforcement partners, including the FBI and the U.S. Attorney for the Southern District, to ensure the strength of the case.”

FBI Assistant Director William F. Sweeney Jr. said:  “Together with our partners from the Greenwich and New Rochelle Police Departments, we were able to swiftly identify Javier Da Silva, an alleged murderer, and place him behind bars.  But while today’s arrest is certainly a welcome conclusion, it in no way alleviates the pain and suffering Valerie’s family will continue to feel for years to come.  The reality of their situation is utterly unimaginable, as is the crime with which Da Silva is charged.”

New Rochelle Deputy Police Chief Robert Gazzola said:  “The arrest of Javier Da Silva is a result of the outstanding work and cooperation between members of the New Rochelle Police Department, the Greenwich Police Department, and the F.B.I. Safe Streets Task Force.  This was a complicated case, and the efforts of the members who worked tirelessly on it should be applauded.   I hope that this arrest will bring some degree of closure to the family of Valerie Reyes.” 

Town of Greenwich Chief of Police James J. Heavey said:  “From the moment Valerie was found in Greenwich, detectives from New Rochelle and Greenwich have worked tirelessly pursuing multiple investigative leads.  We are pleased that this investigation and subsequent prosecution may bring justice for Valerie and some level of peace to her family.  The New Rochelle and Greenwich communities can be proud of the collaborative work of their detectives and how they brought this investigation to a successful conclusion.”

According to the allegations in the Complaint unsealed in White Plains federal court:[1]

On or about January 30, 2019, the Victim was reported missing to the New Rochelle Police Department by her mother, father, and boyfriend.  A few days later, on or about February 5, 2019, her body was recovered in a suitcase alongside a public road in the Town of Greenwich, Connecticut.

DA SILVA, 24, of Flushing, Queens, is charged with one count of kidnapping resulting in death, which carries a sentence of death or 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 defendants will be determined by the judge.

Mr. Berman praised the outstanding work of the FBI Westchester County Safe Streets Task Force, the FBI New Haven Division, the New Rochelle Police Department, the Greenwich Police Department, the Westchester County District Attorney’s Office, the Westchester County Department of Public Safety, and the Westchester County Real Time Crime Center.

The charges contained in the Complaint are merely accusations, 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.

Engel on Reports of Lower Tax Refunds Due to GOP Tax Scam

  “Tax season is just getting underway and already people are feeling the pain from the GOP Tax Scam. According to the IRS, refunds are down in spite of President Trump’s massive trillion dollar tax cut. The reason is obvious: the tax overhaul was designed to further enrich big corporations and the wealthiest one percent, almost exclusively at the expense of working class Americans. In our area, the tax hit will be particularly jarring due to the caps on state and local tax, or SALT deductions. I’ve already heard from some people that their tax bill will go up thousands of dollars this year, a stunningly painful turn for many New Yorkers.

“Not only is the GOP Tax Scam taking money out of the pockets of most Americans, it has also in no way led to the sweeping economic expansion they sold it on. Many big businesses claimed this tax overhaul would mean higher wages for their workers, greater hiring, and more shared prosperity. The exact opposite has happened. To no one’s surprise, most corporations are using the money saved from the tax scam on stock buybacks meant to boost returns for stockholders, while laying off workers and keeping wages stagnant for those retained.

“I said many times this GOP Tax Scam was one of the worst bills I’ve ever seen come to the floor of the House. Now the data supports that assessment. We need to start unraveling this mess, and the place to start is the cap on SALT deductions that disproportionately hurt donor states likes New York, New Jersey, Connecticut, California and Pennsylvania. I’ve introduced legislation to repeal these caps that would retroactively apply to this year’s tax return when passed. Similar legislation has been introduced in the Senate and it is my hope that we can work together expeditiously to move these bills along. This needs to be a priority in the 116^th Congress.”

A Statement from Assembly Member and Public Advocate Candidate Michael Blake on Councilman Díaz, Sr.

“We have a responsibility as elected officials to be aware of the impact of our words.  Moreover, we must equally be selfless enough to acknowledge if and when we cause pain, apologize and unite people to progress ahead.  It is unfortunate and hurtful that Councilman Díaz, Sr. has decided to double down on homophobic rhetoric, not apologize and seemingly convey that he will not listen to the will of the people.  Despite working together in the past to benefit our community in the Bronx, I cannot sit by as his words continue to bring pain to so many people across our city. The time has come for Councilman Díaz, Sr. to resign. Words of division have no place in our society and neither does a rejection of acknowledgement of the pain those words or actions may cause.  I hope that his upcoming remarks and rally are one to express remorse and regret, rather than to divide us even more.”

EDITOR'S NOTE:

This statement comes from a person who gave Reverend Ruben Diaz Sr. a check for One Thousand Dollars for his City Council Campaign, as a member of TEAM DIAZ.

COMMUNITY DEMONSTRATION TO SUPPORT COUNCILMAN REV. RUBEN DIAZ SR.

This came in from Councilman Ruben Diaz Sr.

Guardian Angels Celebrate 40th Anniversary

  Sunday, Aldo Slinadas, Curtis Sliwa, Dominick Serra, William Bohenberger, Tony NG, Don Chin, and Tommy Mcardle seven of the original thirteen members of the 'Rock Brigade' the group which became the Guardian Angels returned to McDonald's on Fordham Road to celebrate the forty-year anniversary of the group. 

  It was  night manager Curtis Sliwa of the McDonald's on Fordham Road near Jerome Avenue who with twelve other McDonald's workers and friends who decided to make people who came into this McDonald's looking for safety from the declining neighborhood feel safe. These workers would walk people home to protect them. The group then decided to ride the #4 subway line when Crime was rampant in the NYC subway system. 

  As to why only seven of the thirteen original members showed up, Sliwa said during the growth period there were difference of opinions with some of the original members leaving. Today however the Guardian Angels are over one thousand strong across the United States, and in several foreign countries. 

Above - Curtis Sliwa talks about how in 1979 he formed the Rock Brigade, which would later become the Guardian Angels. Several of the original thirteen members stand behind him.

Below - Sliwa and the Guardian Angels were presented with a Proclamation from Bronx Borough President Ruben Diaz Jr., and a Citation from Councilman Ritchie Torres presented by McDonald's franchisee Tony Rodriguez and McDonald's Director of Operations Joseph Guerriera. 

Above - Don Chin (original member), and Tony Rodriguez (owner of fourteen McDonald's in the Bronx and Manhattan) greet Curtis Sliwa as he enters the McDonald's located at Fordham Road and Southern Boulevard. 

Below - In honor of the 40 years of the Guardian Angels this McDonald's sold apple pies for 40 cents all day.

Above - So many current and former Guardian Angels came to celebrate that a group photo had to be taken outdoors.

Below - A special cake was given to the Angels on their 40th Anniversary. 

Alleged Gang Member Charged With 2014 Manhattan Murder

  Geoffrey S. Berman, the United States Attorney for the Southern District of New York, John B. Devito, the Special Agent-in-Charge of the New York Field Division of the Bureau of Alcohol, Tobacco, Firearms, and Explosives (“ATF”), and James P. O’Neill, Commissioner of the New York City Police Department (“NYPD”), announced today the unsealing of an indictment charging FRANK BRANDON, a/k/a “Trizzy,” an alleged member of the “Milla Bloods” gang, with the February 23, 2014, murder of Gashier Mendy, 24, inside the Saint Nicholas Houses in Manhattan, and related offenses.  BRANDON was taken into federal custody this morning in Gloversville, New York, and was presented this afternoon before United States Magistrate Judge Kevin Nathaniel Fox.  The case is assigned to U.S. District Judge Edgardo Ramos.

U.S. Attorney Geoffrey S. Berman said:  “Almost five years ago, Gashier Mendy was shot dead, her life tragically and brutally taken.  As alleged in today’s indictment, Frank Brandon killed her.  Thanks to the outstanding efforts of the NYPD and ATF, Brandon now faces murder charges for his heinous crime.”

ATF Special Agent-in-Charge John B. Devito said:  “Frank Brandon, an alleged member of the ‘Milla Bloods’ gang, was charged with a number of federal offenses including the murder of a young woman.  ATF and our law enforcement partners stand united at the frontline in the fight against violent crime.  We will aggressively pursue and bring to justice any individual bent on bringing heinous acts of violence into their communities.  I would like to thank the members of the ATF/ NYPD Joint Robbery Task Force for their tireless efforts on this case.  I would also like to thank the United States Attorney’s Office for their work in prosecuting this case.    

According to the allegations in the Indictment[1]:

BRANDON was a member of the “Milla Bloods,” a gang that operated in Manhattan and engaged in racketeering activity, including acts of violence and narcotics distribution.  On February 23, 2014, in furtherance of his gang activity, BRANDON shot and killed Gashier Mendy inside 240 West 129th Street.

BRANDON, 32, of Gloversville, New York, is charged in the Indictment with one count of murder in aid of racketeering, in violation of Title 18, United States Code, Sections 1959(a)(1) and 2; one count of murder through the use of a firearm, in violation of Title 18, United States Code, Sections 924(j) and 2; one count of being a felon in possession of ammunition, in violation of Title 18, United States Code, Sections 922(g)(1) and 2; and one count of conspiracy to distribute and possess with intent to distribute methamphetamines and marijuana, in violation of Title 21, United States Code, Section 846.  BRANDON faces a mandatory minimum penalty of death or life in prison.

The maximum potential sentence in this case is prescribed by Congress and is provided here for information purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Berman praised the outstanding work of the NYPD and ATF.

The charges contained in the Indictment are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

[1] As the introductory phrase signifies, the entirety of the text of the Indictment constitutes only allegations, and every fact described herein should be treated as an allegation.

Attorney General James Announces Lawsuit Against Managing Agent For Allegedly Defrauding Elderly Residents of Co-op

Suit Seeks Compensation for the Cooperative of More Than Half a Million Dollars and a Court Order to Remove Defendants as Managing Agent

  Attorney General Letitia James today announced a lawsuit against Joshua Prottas, Working Realty, Ltd., and Midwood Coop Group, LLC, for abusing his position as the managing agent of a cooperatively-owned apartment building in Midwood, Brooklyn (the “Cooperative”) to defraud the primarily elderly shareholders on the sale of seven of the Cooperative’s apartments to Prottas and his entities. Joshua Prottas, doing business as Working Realty, Ltd., is the longtime managing agent of the Cooperative.    

“Taking advantage of elderly New Yorkers is particularly egregious,” said Attorney General Letitia James. “Instead of acting in the best interests of the Cooperative and its residents, the defendants allegedly scammed these individuals and used the funds for personal gain. We will never tolerate that behavior in our state.”

The suit alleges that Prottas – who wielded total control over the Cooperative’s finances and who the Cooperative’s elderly board members trusted and relied on – orchestrated a sale of the Cooperative-owned apartments to Midwood Coop Group, an entity controlled by him, for his own profit, in flagrant violation of his duties to the Cooperative as its managing agent. The complaint alleges that Prottas was able to obtain a below-market sale by withholding material information from and misrepresenting details about the transaction to the elderly board members. The Attorney General’s investigation also revealed that Prottas allegedly hid a $100,000 commission that he collected from the sale. He attempted to conceal his fraud by manufacturing false documents, which he passed off as legitimate to the Cooperative’s accountant, and also filed false documents with the New York City Office of the Register. 

The complaint also alleges that Prottas exploited the Cooperative for his own financial benefit in other ways, such as by lending to the Cooperative at predatory interest rates and taking an unauthorized increase in his management fee.       

In its filing, the Attorney General seeks restitution and damages for the Cooperative, disgorgement from the Defendants, an order enjoining Prottas and Working Realty from acting as the Cooperative’s managing agent or broker, and other appropriate injunctive and equitable relief.