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Correction Boss Busted in Alleged Pension Scam

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    The leader of a powerful city union who allegedly accepted lavish gifts, exotic trips and cold hard cash in exchange for the investment of pension funds was arrested by the FBI on corruption charges in an ongoing investigation focusing on the NYPD and City Hall. Jonathan Dienst reports. (Published Wednesday, June 8, 2016)

    The leader of a powerful city union who allegedly accepted lavish gifts, exotic trips and cold hard cash in exchange for the investment of pension funds was arrested by the FBI on corruption charges in an ongoing investigation focusing on the NYPD and City Hall.

    Norman Seabrook, president of the Correction Officers' Benevolent Association for the past 21 years, was arrested at his Bronx home early Wednesday morning and charged with honest services fraud and conspiracy.

    Investigators allege Seabrook took kickbacks in connection with his union’s pension fund investments.

    Seabrook allegedly received $60,000 in payoffs and in exchange directed a total of $20 million in the union's retirement funds to the Platinum Investment fund, according to court documents.

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    The former head of the fund, Murray Huberfeld, was also arrested and charged with honest services fraud and conspiracy Wednesday morning. His bond was set at $1 million to be secured by $500,000 in property and co-signed by two financially responsible individuals. 

    Seabrook and Huberfeld have both denied wrongdoing. 

    Seabrook was introduced to Huberfeld on Dec. 13, 2013 by a man sources familiar with the case identify as Jonah Rechnitz, a borough park fundraiser for Mayor de Blasio. Sources say Rechnitz secretly pleaded guilty and is now cooperating with federal investigators. Rechnitz allegedly introduced the two after Seabrook complained he was not getting bribe money for investing the correction officers’ union funds, the complaint states.

    A bribe-for-investment deal between Seabrook and Huberfeld was brokered by Rechnitz in late December 2013, the sources say. Seabrook allegedly agreed to receive two percent of the profit Platinum stood to gain off the union's investment. Seabrook was told he would be paid between $100,000 and $150,000 annually. 

    After multi-million dollar investments into Platinum, Seabrook complained to the Rechnitz witness that he had not received the kickback money he was promised for the investment.

    Rechnitz then agreed to pay Seabrook $60,000 on behalf of Platinum. 

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    On Dec. 11, 2014, Seabrook met Rechnitz near Ferragamo, his favorite luxury goods store in Manhattan. Rechnitz handed Seabrook a Ferragamo bag stuffed with $60,000, the complaint states.  

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

    In late 2013, Rechnitz, Seabrook, and an unnamed NYPD officer traveled to the Dominican Republic twice. Rechnitz paid for the airfare on both trips, the complaint states.

    Ironically, it was on one of the trips to the Dominican Republic that Rechnitz first learned Seabrook wanted to receive bribes for investing his union's funds, according to the complaint.

    After a night of drinking, Seabrook complained about his work investing the union's funds and told Rechnitz that it was time "Norman Seabrook got paid," the complaint states.  

    Rechnitz set up the meeting between Seabrook and Huberfeld soon after they returned from the Dominican Republic, according to court documents. 

    "[Seabrook] made decisions about how to invest correction officers’ retirement money…based not on what was good for his union members, but based on what was good for Norman Seabrook," U.S. Attorny Preet Bharara said at a press conference Wednesday. "For a Ferragamo bag filled with $60,000 in cash, Seabrook allegedly sold himself and his duty to safeguard the retirement funds of his fellow correction officers."

    Seabrook’s attorney, Paul Shechtman, said, “Norman Seabrook has spent his life fighting for correction officers. One should not expect him to stop fighting now.”

    Alan Levine, attorney for Jonah Rechnitz, had no comment.

    The arrests come as federal authorities investigate allegations that NYPD officers engaged in a cash-for-favors scheme, and as Mayor de Blasio’s campaign fundraising is under scrutiny. The mayor insists his fundraising followed all laws.

    "If proven true, these allegations are disgusting because it means he stole money from his own members," Mayor de Blasio said about Seabrook's arrest Wednesday.

    De Blasio also said he was not worried that it may signal further troubles in the corruption probe focused on City Hall.

    "What he did involves his own union and his own pension fund...if proven this is incredibly troubling," de Blasio said.  

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