The Many Colors of Platinum/Centurion, Huberfeld & Nordlicht

MURRAY HUBERFELD (ROBIN HOOD?) AND HIS MONEY – For now, About Platinum…

LostMessiah, June 10, 2016

Murray Huberfeld, described in many places as a great “Philanthropist.”  “As part of the Simon Wiesenthal Center delegation that met with Pope Benedict XVI in 2005, Murray has found success in his advocacy for admirable causes, business endeavors and philanthropic giving.”

Huberfeld has been known to donate significant sums of money through his various family trusts and endowments to different Chabad-Lubavitcher organizations, the Simon Wiesenthal Center, a number of other Jewish causes and varying arts and music charitable institutions. 

We believe that he has not come by a single dollar of his money honestly. Perhaps in his previous life his soul was mixed up with that of Errol Flynn, and he should have been Robin Hood. One cannot be too sure.

While he was arrested this week in connection with Jona Rechnitz and Platinum partners, we do not think he should be going down with the Platinum ship alone. He should at the very least be taking Mark (Meir) Nordlicht (the CIO) and David Bodner (whose original investment helped build Platinum) with him.

In order to understand  whom we view as Huberfeld’s co-conspirators in many of Platinum Partners’ mind-numbingly sophisticated schemes, you need to fathom how a few of them worked. The intricate weave of highly questionable ventures illustrates Platinum’s many tentacles. To grasp the complexity of how Huberfeld and his minion made unimaginable fortunes at the expense of less-sophisticated investors, like Norman Seabrook, one must understand some of the history. So please read on. This is your first in a portfolio of historical adventures.

Before you embark on this epic voyage, an editor’s note:

What follows first is a summary, then a diagram of the scheme (which illustrates its complexity) and finally additional sources of information for your perusal. This will be the first part of many; and each will travel down the same path. We are hoping eventually you will be able to view things from our vantage point. Viewing through our periscope, Huberfeld was the second in command under Mark Nordlicht. The Platinum ship and all its crew really should go down together.

Understanding the Incestuous Relationships in Wealth Management – Part I

The Rothstein Scheme – 2012

Major Players:

  1. Scott Rothsteinspecial kind of Ponzi schemer” – Plead guilty to racketerring, fraud and money laundering in 2012. Sentenced to 50 years and forfeiture of $1.2 Billion –

    Formerly Scott Rothstein was a partner at Rothstein Rosenfeldt Adler, his law firm, which declared bankruptcy. [Note to reader: Rothstein’s firm “rounded up the single largest total of contributions tot he 2008 McCain-Palin campaign”].

  2. Platinum Partners – Platinum Partners Value Arbitrage Fund/Centurion Structured Growth Fund  –

  3. Mark Nordlicht (Chief Investment Officer of Platinum) and Murray Huberfeld (second in command and initial investor with David Bodner) of Platinum (Rothstein claimed Nordlicht and Huberfeld knew of scheme and assisted)

  4. Centurion’s CounselBrian Jedweb

  5. Centurion’s portfolio manager – Jack Simony (Rothstein claims knew of the scheme and assisted)

  6. Level 3 Capital Fund

  7. Regent Capital PartnersA fund allegedly established by Laura Huberfeld, Naomi Bodner and Dalia Kalter, Mark Nordlicht’s wife 

  8. Banyon Fundestablished by Florida entrepreneur George Levin – which used money from Centurion to purchase “settlements” from Rothstein

  9. Frank PreveBanyon’s Manager who had been convicted of Bank Fraud previously

  10. Michael Szafranskia Miami accountant (Platinum connection) who was hired to examine the Rothstein deal and verify paperwork and bank accounts

  11. Toronto Dominion Bank (f/k/a Commerce Bank) – Murray Huberfeld insisted that funds wired for the purpose of the deals be wired through Commerce Bank (n/k/a TD Bank)

  12. Frank Spinosa (regional VP of TD Bank) who took $50,000 bribe to falsify records and persuade  Jedweb, Simony and  Szafranski that Rothstein had underlying funds to repay investors

  13. Steve Caputifake TD Banker “Ricardo Mejia” who managed Rothstein’s nighclub Cafe Iguana and a strip club Solid Gold.

  14. Doug Von Allmen and A.J. Discala – Part of a group of additional investors netting $179M into the scheme.

  15. Prostitutes – hired to keep Centurion’s Simony and Ari Glass, a Platinum employee, happy

 

Huberfeld Ponzi1.3

For further reading:

How Hedge Funds Got Hooked in a Ponzi Scheme

http://www.barrons.com/articles/SB50001424052748703754104577239791689397880

Ponzi schemer Scott Rothstein lured supposedly smart money out of New York hedge funds. Why did they continue doing business with him?

Two years after Rothstein’s scam collapsed, the civil plaintiffs are just getting warmed up. The first jury trial to follow the mess awarded $67 million in January to a group of investors who sued TD Bank, claiming that its employees assisted Rothstein’s scam. The U.S. unit of Toronto-Dominion Bank will appeal, but remains a deep-pocketed target for Rothstein victims. The Canadian parent recently set aside a litigation reserve of $255 million. On Thursday, it offered $170 million to settle claims with another group of Rothstein victims. The bank declined to comment on any aspect of this story.

The other deep pockets in the Rothstein lawsuits are the New York hedge funds. Sharing offices on the 54th floor of a tower above Carnegie Hall, the funds—Platinum Partners Value Arbitrage Fund, Centurion Structured Growth and Level 3 Capital Fund—advanced about $440 million to Rothstein, starting in early 2008, and got all but $19 million back before the lawyer fled in a private jet to Morocco in October 2009. After returning, Rothstein pled guilty to racketeering, fraud and money laundering.

Sentenced to 50 years and the forfeiture of $1.2 billion, he began cooperating with federal prosecutors and the trustee in his law firm’s bankruptcy. In a December 2011 deposition, Rothstein said he had compromised some hedge-fund employees with cash, strip-club outings and escort services. He also claimed that, to get their money out, the hedge funds helped him attract new investors, after they suspected fraud and realized that Rothstein would need fresh money. The bankruptcy trustee is seeking $423 million from the three hedge funds and another $20 million directly from their principals.

The hedge funds say they were unsuspecting victims of Rothstein and didn’t recommend him to others after he missed scheduled payments. In court filings and in statements toBarron’s, they say they invested in good faith on the strength of due-diligence visits with Rothstein, TD bankers and lawyers—who, they claim, falsely told the funds that Rothstein had the settlement money. “What was unique about Rothstein,” said Platinum’s boss Mark Nordlicht in an e-mail to Barron’s, “was his ability to enlist so many others to assist him in his deceptions.”

Platinum Partners hedge fund settles with Rothstein trustee

http://www.bizjournals.com/southflorida/blog/picking_up_the_pieces/2012/06/platinum-partners-hedge-fund-settles.html

The settlement is a much rosier outlook than what Platinum faced nearly two years ago. Stettin sued Platinum for more than $400 million in December 2010, citing the amount of money that flowed in and out of Platinum during Rothstein’s $1.4 billion fraud. The $32 million represents only the transactions for the last three months of the fraud.

The trustee and other investors accused Platinum of covering up the fact that it learned of Rothstein’s fraud in April 2009, six months before the Ponzi scheme collapsed. But Platinum has maintained that it was only a victim of the scheme. Federal authorities also included Platinum and its partner funds – Centurion Structured Growth and Level 3 Capital – on its list of victims.

John Genovese, the attorney for Stettin, confirmed the Platinum settlement, but declined to comment. The settlement does not include a bar order like many other settlements in the RRA case have.

Mark Nordlicht, chief investment officer with Platinum, said in an emailed statement that the fund was pleased with the settlement.

“We now look forward to working with the trustee to maximize recovery for all victims,” he said.

Ex-Lawyer Rothstein Says Funds Didn’t Warn Investors

http://www.bloomberg.com/news/articles/2012-01-03/convicted-ex-lawyer-scott-rothstein-says-that-funds-didn-t-warn-investors

Money Laundering’

A lawyer asked Rothstein what he spent money on.

“Money laundering, extortion, physical violence,” he said. “Influencing law enforcement, influencing bankers, influencing businessmen, influencing business owners, a whole myriad of things.”

Rothstein said he bribed law officers and judges and that he laundered money for organized-crime figures. The prosecutor didn’t allow him to name anyone.

Rothstein said he paid for female “escorts” for police officers and didn’t worry about being caught.

He said he tried to stop his employees’ dealing in marijuana, which he said was common at the firm.

“In the office, in the garage, outside the office, I had some partners that couldn’t come to work without smoking pot,” he said. “I also found out they were actually dealing drugs in the office. I actually tried to put a stop to that.”

Rothstein said he worried the drug dealing might get someone’s attention. He didn’t worry about the prostitutes in the office.

Police Department

“The police also were sleeping with my escorts,” Rothstein said. “Broward sheriff’s office, Fort Lauderdale Police Department weren’t going to bother me.”

Representatives of the departments yesterday didn’t immediately reply to messages requesting comment.

Rothstein went on: “Pot, not a great idea in the office. It troubled me, probably because they were actually dealing the pot out of the office while I was in the middle of running a several-hundred-million-dollar Ponzi scheme.”

The bankruptcy case is In re Rothstein Rosenfeldt Adler PA, 09-34791, U.S. Bankruptcy Court, Southern District of Florida (Fort Lauderdale). The investors’ suit is Razorback Funding LLC v. Rothstein, 09062943, Circuit Court, 17th Judicial Circuit, Broward County, Florida (Fort Lauderdale). The hedge funds’ suit against TD Bank is Platinum Partners Value Arbitrage Fund LP v. TD Bank NA, 0:11-cv-61835, U.S. District Court, Southern District of Florida (Fort Lauderdale).

 

Attorney Russell Adler charged in Rothstein Ponzi fraud

http://www.bizjournals.com/southflorida/blog/picking_up_the_pieces/2014/03/attorney-russell-adler-indicted-in.html

Rothstein’s firm rounded up the single largest total of contributions to the 2008 McCain-Palin campaign. As a reward, Rothstein was invited to the Republican National Convention.

The agreement stated: “The contributions made by RRA attorneys, their spouses and administrative personnel to the joint fund-raising committees for McCain also resulted in approximately $400,000 in contributions made to the Republican National Party and approximately $450,000 to the state Republican parties.”

In January 2011, Adler settled a $1.2 million lawsuit in the RRA bankruptcy case for $350,000.

Adler was previously suspended by The Florida Bar for 30 days for falsifying information about his financing to purchase an apartment. The Bar also said Adler failed to follow Bar regulations regarding attorney signatures on litigation settlement statements. Rothstein’s fraud was based on lies he told about phony settlements in court cases that didn’t exist.

Adler initially denied the Bar’s allegations, then cooperated with the investigation. He had no previous disciplinary action involving the Bar.

Murray Huberfeld’s Hedge-Fund Firm Has History of Big Risks

The firm is known for an unusual investing style and superlative performance

http://www.wsj.com/articles/murray-huberfelds-hedge-fund-firm-has-history-of-big-risks-1465430350

Platinum’s managing partner, who wasn’t named in the complaint, “stressed the importance of bringing in more COBA money because of $44 million in looming redemptions from [the Value Arbitrage Fund] at year end 2014,” according to the complaint.

The Value Arbitrage Fund, where prosecutors say the union’s money was invested, had hundreds of millions of dollars scattered among investments including oil platform operator Black Elk Energy, electric company Glacial Energy and Infinity Augmented Reality, which under a previous name specialized in insurance policies that allow investors to make money when a person dies sooner than expected, according to a 2014 valuation report reviewed by the Journal.

Black Elk was charged criminally in 2015 in connection with an off-coast explosion that left three workers dead, and filed for bankruptcy. Black Elk pleaded not guilty to the criminal charges, and litigation is ongoing. Glacial Energy also went bankrupt.

Platinum continued to pitch the union on further investments until May 2015, when prosecutors subpoenaed the union and the hedge fund for information on their relationship, the complaint said.

In December, Platinum blocked investors from immediately withdrawing some of their money, citing hard-to-sell assets, said people familiar with the firm.

http://www.wsj.com/articles/murray-huberfelds-hedge-fund-firm-has-history-of-big-risks-1465430350

Rothstein Trustee Goes After Hedge Fund Heads For $40M

http://www.law360.com/articles/268406/rothstein-trustee-goes-after-hedge-fund-heads-for-40m

Law360, New York (August 30, 2011, 3:32 PM ET) — The Chapter 11 trustee overseeing Rothstein Rosenfeldt Adler PA’s liquidation filed a new, $40 million adversary suit Monday, targeting three hedge fund managers, their wives and related companies for capitalizing on Scott Rothstein’s $1.2 billion Ponzi scheme.
The suit — which names Regent Capital Partners LLC; Murray and Laura Huberfeld; the Bodner Family Foundations and David and Naomi Bodner; husband and wife Mark Nordlicht and Dahlia Kalter; and SFS Capital Funding LLC — seeks to recover fraudulent transfers the defendants allegedly received from the law firm, through which Rothstein admitted running an elaborate Ponzi scheme.

It says the three men, who held influential positions on two hedge funds, used the funds’ money and their wives to create Regent for the purpose of cashing in on a fake settlement scheme Rothstein was offering through the firm.

“The funds were sophisticated investors who purported to conduct their own diligence of RRA and the confidential settlements both before and during the period in question,” the suit said.

“Their investigation revealed a significant number of red flags with Rothstein’s confidential settlement business, facts which would have been apparent to any reasonable investor, indicating that Rothstein was involved in a fraud,” it said.

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