President of New York City Guards’ Union Faces Corruption Charges
by David M. Reutter
Federal officials are pursuing corruption charges against Norman Seabrook, former president of the New York City Correction Officers’ Benevolent Association (COBA).
The charge of conspiracy to commit honest services fraud stemmed from Seabrook’s alleged acceptance of bribes to steer $20 million in union investments to Platinum Partners, a Manhattan hedge fund. Thanks to a cooperating witness identified by the New York Times as real estate investor Jona Rechnitz, the FBI was able to uncover the kickback scheme.
Seabrook served as COBA’s president for 21 years and was a 24-year veteran guard employed at the Rikers Island jail complex. PLN has published multiple articles about rampant corruption at Rikers, which has seen numerous employees arrested for trafficking contraband, having sex with prisoners and engaging in physical abuse. [See, e.g.: PLN, July 2015, p.1]. According to the federal indictment, Rechnitz paid for Seabrook to take trips to Las Vegas, California and Israel, and at least twice to the Dominican Republic.
On “either the November or December 2013 trip to the Dominican Republic,” Seabrook complained to Rechnitz that he “worked hard to invest COBA’s money and did not get anything personally from it.” Apparently forgetting his $300,000 annual salary with his union stipend, he said it was time that “Norman Seabrook got paid.”
Rechnitz was aware that Platinum Partners, operated by Murray Huberfeld, wanted to attract institutional investors, and told Huberfeld he thought he could convince Seabrook to invest COBA funds if the union president was compensated.
Federal prosecutors claimed that Huberfeld confirmed in December 2013 that Platinum was willing to pay Seabrook two percent of the profits, which “could be between $100,000 and $150,000 per year.” In March 2014, COBA made a $10 million investment in Platinum; three months later the union invested another $5 million, and in August 2014 it made a final $5 million investment.
On December 11, 2014, Rechnitz delivered an $800 Ferragamo bag containing $60,000 to Seabrook, who became “angry that it was not as much money as he was initially promised.”
According to prosecutors, Huberfeld suggested Rechnitz’s company “create a sham invoice” for two seats at “8 Knicks games @ $7,500 per game.” No tickets ever changed hands, but the $60,000 kickback appeared to be counted as a legitimate business expense.
Huberfeld tried to get additional COBA investments because Platinum was “under some pressure” from reimbursements. The COBA well, however, had dried up because Seabrook was having an “internal problem with a guy.”
That internal problem included two lawsuits filed by former COBA corresponding secretary William Valentin, who said he was unfairly removed from his position for “alleging a variety of violations of union rules, and made specific reference to COBA’s investments in Platinum.”
Another suit filed by Jeffrey Norton, Newman Ferrara and former COBA president Philip Seelig claimed that the union’s leadership “had, for years, failed to supervise Seabrook in any meaningful way.” They contended in court filings that, “Indeed, Seabrook had ensured the Executive Board’s quiescence through liberal dispensations of gift cards, cars, and plush job assignments away from Rikers Island, which ensured they exercised no due diligence over Seabrook’s activities.”
Financial transactions between the union and Platinum Partners ended after federal officials served subpoenas on them on May 20, 2015. Seabrook and Huberfeld were charged in federal court in June 2016; Seabrook was suspended from his position as a guard and released on $250,000 bond, while Huberfeld was freed on $1 million bond. See: United States v. Seabrook, U.S.D.C. (S.D. NY), Case No. 1:16-cr-00467-ALC-1.
According to a January 6, 2017 news report, Seabrook’s trial was postponed until at least mid-October 2017 due to a separate investigation involving Platinum Partners that resulted in the arrest of the company’s co-founder and chief investment officer, Mark Nordlicht. Platinum collapsed in late 2016, declaring bankruptcy and liquidating its assets.
Sources: New York Times, www.businesswire.com, www.nydailynews.com