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FBI Arrests Correction Union President Norman Seabrook For Wire Fraud
By
Jen Chung
Published Jun 8, 2016
Modified Jun 8, 2016
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By
Jen Chung
Published Jun 8, 2016
Modified Jun 8, 2016
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U.S. Attorney Preet Bharara's corruption investigation into NYC officials has now landed another big fish: Correction union president Norman Seabrook was arrested this morning, on wire fraud charges. Seabrook is accused of receiving kickbacks in exchange for funneling millions of union retiree benefits and operating funds to a hedge fund run by Murray Huberfeld.
Huberfeld, who gave start-up capital to the fund Platinum Partners, was also charged with wire fraud.
In April, the Wall Street Journal reported, "Jona Rechnitz, a Brooklyn real-estate investor, referred Norman Seabrook, the president of the Correction Officers’ Benevolent Association, to Platinum Partners, the people said. The investment put a large percentage of the union’s money in a firm that has had a mixed stretch. Platinum generally has reported steady returns. Last December it blocked investors from withdrawing some of their money in one fund that contains hard-to-sell assets, according to people familiar with the matter. Such moves have been rare in the hedge-fund world since the financial crisis."
The criminal complaint notes that members of the Correction Officers' Benevolent Association (COBA) pay $45 in union dues during each two-week pay period, resulting in $1,000+ of union fees a year; there are more than 9,000 union members. And Seabrook's power over the union's board was immense; from the complaint:
Rechnitz is one of the two businessmen at the center of the federal probe into corruption, with Rechnitz and Jeremy Reichberg using cash and jewels to allegedly get favors from city officials. Both were major donors to Mayor Bill de Blasio's election efforts. Numerous high-ranking police officials have retired or been demoted, for giving escorts or helicopter demonstrations.
The NY Times notes, "The relationship between the mayor and Mr. Seabrook has been close in the past. At a 2014 fund-raiser for a union charity, Mr. de Blasio referred to Mr. Seabrook as a 'friend' and a 'great leader.'"
Bharara is holding a press conference at 12:30 p.m. to discuss the charges.
Tagged
arrest
coba
federal corruption
jona rechnitz
kickbacks
Murray Huberfeld
norman seabrook
wire fraud
Jen Chung
Jen Chung is a former WNYC and Gothamist editor.
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Gothamist is funded by sponsors and member donations
Gothamist is funded by sponsors and member donations
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