Federal authorities made their first arrests in connection with the several corruption investigations into the fundraising operation of New York City Mayor Bill de Blasio, according to the New York Times.
Norman Seabrook, the politically connected president of the union representing the city's corrections officers, was nabbed on Wednesday morning on corruption charged brought by U.S. Attorney Preet Bharara, who is expected to hold a news conference later Wednesday to announce the charge.
Charges were also brought against hedge fund financier Murray Huberfeld, who was handling $20 million worth of investments from Seabrook's union. Huberfeld, in turn, was throwing kickbacks to Seabrook through Jona Rechnitz, who has already pleaded guilty to federal fraud charges and is now cooperating with the government on its fundraising probe.
The Times reports:
The charges against the union leader, Norman Seabrook, and a second defendant, Murray Huberfeld, a hedge-fund financier, represent the first major criminal case linked to one of several corruption investigations that are focused on the campaign fund-raising of Mayor Bill de Blasio, a Democrat.
The criminal complaint charging the two men also contains what could be a significant development: A central target in one of the fund-raising inquiries, Jona S. Rechnitz, is cooperating with the government in the case. […]
The charges, brought by prosecutors in the office of Preet Bharara, the United States attorney for the Southern District of New York, involve Mr. Seabrook’s investment of $20 million from his union and its annuity fund in Platinum Partners through Mr. Huberfeld, and Mr. Huberfeld’s payment of a kickback to the union leader, according to the criminal complaint unsealed Wednesday morning.
According to the 17-page complaint, sworn out by F.B.I. Special Agent Blaire Toleman, Mr. Huberfeld, through Mr. Rechnitz, paid an initial kickback to Mr. Seabrook of $60,000, the complaint said, noting that "ultimately Huberfeld agreed to pay Seabrook bribes that were expected to total hundreds of thousands of dollars."
Rechnitz delivered $60,000 of the kickback to Seabrook in an $820 Ferragamo bag specifically purchased for the payment, according to the FBI.
Rechnitz connected Seabrook to Huberfeld, according to the Wall Street Journal.
Earlier this year it was revealed by the New York Post's Shawn Cohen that Rechnitz was taking NYPD officials on private jet trips to Las Vegas and bringing along prostitutes who would masquerade as flight attendants
De Blasio has referred to Seabrook as a "friend" and a "great leader" in the past, but is now attempting to distance himself from the union leader by claiming that he has not spoken with Seabrook for "several months" and that the arrest was isolated from the investigation into his administration.
"Although investigations continue, I believe that the vast majority of the problems have been identified and obviously in the context of the police department they’re being acted on very aggressively," de Blasio said. "What he did involved his own union, his own pension fund, which is separate from the city government obviously."
De Blasio also said that the charges against Seabrook remain "allegations."
"These are allegations but I’ll say this: If proven true, it’s disgusting and it’s very, very sad," Mayor de Blasio said. "It means he stole money from his own workers. That’s what it comes down to. If he defrauded his own pension fund it means he took money that was meant for his workers’ retirements and put it in his own pocket."