Cashing Out on Rechnitz

December 2, 2019

Remember Jona Rechnitz?

He is the liar/rat/skunk (take your pick) who served as the feds’ star witness — a one-man bribery machine who corrupted, among others, the NYPD’s top brass, Mayor Bill de Blasio, and former Correction Union head Norman Seabrook, whom Rechnitz persuaded to invest $19 million of the union’s pension fund in a high-risk hedge fund that went bust.

Rechnitz, who has pleaded guilty to wire fraud and conspiracy charges, is to be sentenced this week. Not only is he facing serious prison time but District Judge Alvin Hellerstein is seeking what Rechnitz treasures most — his money.

In a pre-sentence investigative report obtained by NYPD Confidential, Hellerstein is demanding that Rechnitz reimburse the Correction Union for much of its hedge fund’s losses. Murray Huberman, who headed the fund Platinum Partners that went bust and who has pleaded guilty to conspiracy charges, agreed to reimburse the union $7 million. That leaves $12 million.

“Rechnitz had to know that Platinum Partners was a high-risk fund with assets substantially invested in illiquid securities, and that Murray Huberfeld was willing to pay a bribe to obtain funds to satisfy a liquidity shortage, thus making it reasonably foreseeable that an investment of pension funds risked the loss of those funds.,” Hellerstein wrote. “Rechnitz’s behavior causes him to be jointly and severally liable … for [the union’s] loss of $19 million.”

To that end, Hellerstein is demanding that Rechnitz provide:

the names and addresses of his and his wife’s accountants who helped prepare Rechnitz’s tax returns since 2015 to the present, and authorization to make full disclosures about his and his wife’s personal and business affairs;

copies of his tax returns from 2015 to the present;

names of businesses, banks or financial institutions and their officers who provided Rechnitz and his wife with credit or loans;

market appraisals of his art and jewelry;

locations of safe deposit boxes in his and his wife’s name and the disclosure of their contents;

promissory notes and all other written evidence of personal loans;

an affirmation stating that Rechnitz has no ownership in any real estate or business, or in any company or corporation either in the U.S. or Israel or anywhere else.

Under the heading “Acceptance of Responsibility,” Hellerstein wrote that “the absence of any offer by Rechnitz to reimburse [the union] for its loss qualifies his acceptance of responsibility.”    

So how did Rechnitz do it? How did he con so many people — Seabrook in particular — into investing his union’s funds with Huberman? He testified he “waited for the right time” to suggest the investment, which included a kickback to Seabrook of $60,000.

This occurred, he said, on a trip to the Dominican Republic on a chartered plane that he paid for, late at night in Seabrook’s hotel room when Seabrook was in “a highly emotional state.” Rechnitz testified that Seabrook told him he had been raised poor in the Bronx by a single mother, was having trouble with his mortgage and had difficulty as a black man making a living.

“I felt it was my opening,” Rechnitz testified.