Norman Seabrook once represented guards at Rikers Island, one of the nation’s toughest city jails. He now likely will do some serious prison time. On August 15, Seabrook (in photo), former longtime president of New York City’s Correction Officers Benevolent Association (COBA), was found guilty by a Manhattan federal jury of honest services fraud and conspiracy related to a $60,000 bribe he had taken a few years earlier from the head of a now-bankrupt hedge fund in return for steering $20 million in COBA assets to the fund. The hedge fund CEO, Murray Huberfeld, and his emissary, Jona Rechnitz, already had pleaded guilty. Seabrook’s previous trial ended in a hung jury last November. “I will be vindicated because God is still on his throne,” said Seabrook after his conviction, vowing to appeal. Sentencing is set for November 30.
Union Corruption Update examined the details of this case back in June 2016 and again this July. For slightly more than two decades, Norman Seabrook, now 58, headed the 9,000-member Correction Officers Benevolent Association, a union whose member guards and auxiliary employees gamely try to keep order at Rikers Island, the City of New York’s sprawling jail complex where on any given day about 10,000 inmates – many of them pathologically violent – are awaiting trial, awaiting transfer or serving a sentence. Seabrook knows this territory intimately, having started out there as a guard. As head of COBA, he represented members with relentless zeal, at certain points even thwarting official investigations of alleged guard violence against unruly inmates. As it turned out, he also could be bought. The union pension fund, with roughly $70 million in largely underperforming assets, was his bargaining chip.
According to prosecutors, Seabrook and Murray Huberfeld, CEO of Platinum Partners, a Manhattan-based hedge fund, had established a quid pro quo in late 2014. The pair had been introduced to each other by Brooklyn-based real estate investor Jona Rechnitz, whom Seabrook had met while on vacation in the Dominican Republic. In the pay-for-play deal, Seabrook would transfer $20 million worth of COBA pension funds to Platinum Partners, and in return, Huberfeld would provide Seabrook with $100,000 to $150,000 a year in side cash. Seabrook, who felt he deserved that money (“It’s time for Norman Seabrook to get paid”), proceeded to move the $20 million to Platinum Partners in three installments during December 2014. Unfortunately, and perhaps unbeknownst to Seabrook, Platinum Partners was on the verge of going under. By willfully bypassing due diligence safeguards, Seabrook was engaging in honest services fraud, in the process putting the financial security of current and future COBA retirees at high risk.
“High risk” wasn’t quite the proper term for this situation. “Disaster in the making” would have been more like it. In short order, Platinum Partners lost $19 million of the invested $20 million; about $5 million of the losses came from union operating funds without the union’s knowledge. CEO Murray Huberfeld, unable to provide Seabrook with his promised money on the side, hastily improvised. He sent his fixer, Jona Rechnitz, a fundraiser for New York City Mayor Bill de Blasio as well as a real estate investor, on a mission. On December 11, 2014, Rechnitz handed Seabrook $60,000 in cash stuffed inside a Ferragamo handbag. With the mission accomplished, Huberfeld reimbursed Rechnitz with a $60,000 check and an accompanying fake invoice for eight pairs of courtside tickets to New York Knicks basketball games. With Platinum Partners remaining dangerously undercapitalized, Huberfeld practically begged Seabrook to transfer additional union pension funds. Unfortunately for the protagonists, William Valetin, corresponding secretary for COBA, had grown suspicious, indeed, so much so that he filed a pair of federal lawsuits demanding a full accounting of the flow of union funds. This led to a criminal investigation by then-U.S. Attorney Preet Bharara, which in turn led to grand jury indictments of Seabrook and Huberfeld in June 2016 for fraud and conspiracy. Rechnitz, listed as a cooperating witness, copped a plea and appeared willing to tell all.
Seabrook and Huberfeld went on trial last fall. Jurors were unable to reach a verdict on any of the charges, and the case ended in a mistrial in November. Despite this setback, prosecutors vowed to retry both. Their persistence paid off. Huberfeld pleaded guilty to fraud and conspiracy this May, and Seabrook went back on trial in early August. Prosecutors explained that Seabrook knowingly and repeatedly ignored standards of due diligence in order to enrich himself in his dealings with Huberfeld, Rechnitz and real estate developer Jeremy Reichberg. Seabrook’s defense strategy was to attack the character of Rechnitz, who already had admitted to securing favors and perks from various politicians and police officers. While not denying Seabrook had accepted a Ferragamo satchel from Rechnitz before they sat down to dine at a midtown Manhattan steakhouse, they argued that the bag contained nothing more than cigars for Hanukah. “Only Jona (Rechnitz) says there was money in the bag, and Jona is a pathological liar,” said attorney Paul Shechtman, a partner in the New York office of the Houston-based Bracewell law firm.
A week later, at 3:30 P.M., the jury came back with its verdict, declaring Seabrook guilty of honest services fraud. However, members were unable to reach a decision on conspiracy. Seabrook found this outcome unacceptable. “You haven’t deliberated enough,” he told jurors. “You need to keep going. I will not accept a partial verdict.” The 12 members obliged him. And a half-hour later, they returned with a guilty verdict for conspiracy. After consoling his wife and other family members, Seabrook turned to a reporter and declared, “I’m still smiling.” Shortly thereafter, he shook hands with U.S. Attorney Geoffrey Berman and declared his intent to file an appeal. “I will be vindicated because God is still on his throne,” said Seabrook. In absence of an appeal, he may need God’s help come sentencing on November 30, when he faces up to 40 years in prison.
Geoffrey Berman, for his part, is satisfied that justice has been done. “Norman Seabrook was once one of the most powerful union leaders in this City,” he said. “Today he stands convicted of taking a $60,000 bribe to invest $20 million of his union members’ money in a fund that ultimately went belly-up, losing $19 million.” Berman has been busy as of late combating corruption. In this year alone, his office successfully prosecuted former New York State Assembly Speaker Sheldon Silver, former State Senate leader Dean Skelos, former State University of New York (SUNY) Polytechnic Institute President Alain Kaloyeros, and a former top aide to New York Governor Andrew Cuomo, Joe Percoco. “As long as there are public servants who put self-interest above the people they are sworn to serve,” said Berman, “public corruption will remain a top priority of this Office.”