ETF News

Ex-NYC union head convicted of taking bribe for investing in hedge fund

NEW YORK, Aug 15 (Reuters) - The former head of New York City’s correction officers’ union was found guilty on Wednesday of accepting a bribe to steer union money to now-defunct hedge fund Platinum Partners for investing.

Norman Seabrook, who once led the Correction Officers’ Benevolent Association, was convicted by a Manhattan federal jury of one count of fraud after his second trial on the charges. An earlier trial ended with a hung jury in November.

The jury has so far failed to reach a verdict on a related conspiracy charge. U.S. District Judge Alvin Hellerstein ordered them to continue deliberating.

Paul Shechtman, a lawyer for Seabrook, had no immediate comment.

Federal prosecutors had accused Seabrook of steering $20 million of union funds into Platinum in exchange for a $60,000 bribe from the fund. Prosecutors said the payment had been arranged by Platinum co-founder Murray Huberfeld and delivered to Seabrook in the form of cash stuffed into a Ferragamo bag by real estate developer Jona Rechnitz.

Rechnitz, whose role as a fundraiser for New York City Mayor Bill de Blasio drew public attention to the case, pleaded guilty and testified against Seabrook.

Huberfeld had gone to trial alongside Seabrook last year but pleaded guilty to one count of conspiracy to commit wire fraud before Seabrook’s second trial. He did not testify against Seabrook.

De Blasio has repeatedly denied that Rechnitz enjoyed any corrupt influence in his administration. Federal and state prosecutors closed an investigation into de Blasio’s fundraising in March without bringing charges. The mayor was re-elected last year.

Platinum Partners largely shut down operations after seven people affiliated with the firm, including co-founder Mark Nordlicht, were charged in December with running a $1 billion fraud. All have pleaded not guilty.

Platinum’s assets are being liquidated under the oversight of court-appointed receivers. (Reporting By Brendan Pierson in New York; Editing by Cynthia Osterman)