The Shocking Departure of Judge in Platinum Partners Trial, A Defense Ace-in-the-Hole

Intrigue surrounds NYC judge’s withdrawal from case against hedge fund founder who fleeced correction officers’ union

A Manhattan federal judge has abruptly withdrawn from a case involving a crooked hedge fund founder who screwed the correction officers’ union out of $20 million — and sources say it’s due to the judge’s close relationship with an executive who testified about the fund swindling investors.

Judge Alvin Hellerstein, 86, transferred Murray Huberfeld’s case to another court Tuesday without explanation. The move came only weeks before Hellerstein was to re-sentence Huberfeld for his role in a bribery scheme involving former jails union boss Norman Seabrook and notorious Mayor de Blasio donor Jona Rechnitz.

Sources say that behind the scenes, defense attorneys argued Hellerstein should not be on the case because he is close with Andrew Kaplan, a former executive at Huberfeld’s hedge fund, Platinum Partners. Huberfeld recently hired a new attorney, Andrew Levander, records show.

“One of the defendants in the Platinum case … is Andrew Kaplan. I have known Andrew Kaplan since he was born. He and one of my daughters grew up together, went to school together, were friends together. His sister and my eldest daughter remain close friends. His father was a good friend of mine but passed away about five, six years ago, and his mother remains a very good friend of mine, so there is that relationship,” Hellerstein said at a 2018 hearing. “I can’t see that whatever happened, whatever conduct occurred at Platinum affects the issues of this case, which is an honest services issue.”

Online records show Kaplan and Hellerstein’s names on newsletters for The Jewish Center synagogue on the Upper West Side, as well as other charities.

The revelation came after Huberfeld pleaded guilty but had not been sentenced for his role in a $60,000 bribe to Seabrook in December 2014 in exchange for a $20 million investment of union money in Platinum Partners. The union lost its money when the hedge fund went bankrupt. The Correction Officers’ Benevolent Association is still fighting in court to recover the loss. Seabrook asked last week to serve his 58-month sentence in home confinement due to the coronavirus pandemic.

Continue reading in the New York Daily News, click here.

The Brothers Stark, an Investigation, Plagued with Inconsistencies and Kendall Felix Denied Parol – [OPINION]

UPDATED OPINION: 13:48, 17:35

There was Something Wrong with the Whole Menachem Stark Murder Story… from Day One

In 2014 Menachem Stark, a member of the tightly knit and wholly insular Satmar community was murdered. Stark was a wealthy landlord and alleged slumlord who was kidnapped, suffocated and then brutally burned. At the time of his disappearance and the subsequent finding of his body miles away in January of 2014, news articles reported that he was a “mixed” bag when it came to what people thought of him. In some articles he was referred to as “notorious” in others “affable.”  He had tenants complaining of atrocious living conditions and unreasonable rent demands with little recourse absent expensive litigation. In stark contrast, there were tenants who referred to him as kind and reasonable.

Those within his inner circle sometimes referred to him as a “mensche.” One of the articles that came out at the time of his death, on January 11, 2014, gave a fairly well rounded picture of Menachem Stark, a/k/a Max, while the police were still trying to compile a clearer picture of his death.

Brooklyn landlord murder: police find new clue

What seems to be a common thread in all of the news stories at the time was that apparently, he was very loyal to those he trusted and very generous with employees who he felt protected his interests. In a lot of ways he was a paradox to those of us following the stories. At least one of the men accused of having killed him was one of the people who commented on his loyalty as a boss, his menchekeit. Seems odd that such an employee would then kill his boss over $25,000.00, a figure offered in some of the initial stories.

At the time Menachem Stark was murdered, he had a wide assortment of business partners, with many of his businesses shared by a single or a few different groups of partners. The properties he held were worth tens of millions if not hundreds of millions of dollars. At least some of those properties contained clauses in their LLC Agreements that gave the rights to the property in the event of the death of any of the “unit holders” to the other holders. In other words, when he died, at least some of his properties passed directly to his partners. Others had been the source of litigation including “lis pendens” proceedings, which were notices of dispute of ownership, as reported in articles from 2014.

Oh… Congressman, Can Any Politician Have Clean Hands? Espaillat and Rechnitz – the Jona Opera Continues

Harlem Congressman Adriano Espaillat, right, allegedly received real-time election results in 2014 thanks to the NYPD connections of Jona Rechnitz, left. (Obtained by Daily News)

Congressman Adriano Espaillat solicited donations from Jona Rechnitz after favor: source

Harlem Congressman Adriano Espaillat received real-time election results in 2014 thanks to a notorious Mayor de Blasio donor’s connections at NYPD headquarters, evidence obtained by the Daily News shows.

The previously undisclosed episode involving Jona Rechnitz and Espaillat, who was then a state Senator, is yet another example of how the City Hall insider quickly developed unique access to New York politicos by throwing around money.

Emails obtained by The News show Rechnitz got Espaillat to do him a big favor in the midst of the competitive race — and then swapped numerous emails with his chief of staff on primary night.

A source with direct knowledge said Rechnitz’s ties to Espaillat were investigated by prosecutors in the Southern District of New York. That office brought charges against high-ranking cops, members of the NYPD’s gun license division and former jails union boss Norman Seabrook, thanks to the aspiring real estate power player’s cooperation.

The News reported last month on an episode involving de Blasio, the then-landlord of Grand Central Terminal and Rechnitz as part of the federal probe of Hizzoner’s fundraising practices.

To read in its entirety, click here.

Serial Fraudsters are no Different from Other Serial Criminals – Rechnitz Feeling Impervious in CA?

Corrupt Mayor de Blasio donor Jona Rechnitz faces new FBI probe in L.A.: court papers

Notorious Mayor de Blasio donor Jona Rechnitz faces a new FBI investigation in Los Angeles, only months after he was sentenced for bribing public officials in New York.

Rechnitz’s latest legal trouble was revealed as part of an ongoing $7 million debt dispute in Los Angeles County Superior Court with a Beverly Hills investor, Victor Franco Noval.

Rechnitz’s attorneys wrote in a letter made public late Monday that they could not respond to the civil suit because it relates to the “subject matter of an ongoing criminal investigation led by the FBI.”

 

Noval’s attorney Ronald Richards said the FBI investigation was likely examining allegations Rechnitz was running a scam involving loans in exchange for diamonds he didn’t actually own.

“Basically he was borrowing money on diamonds that weren’t his — on top of creating one lie on top of another to keep the loans going,” Richards said.

To continue reading, click here.

Jona Rechnitz, His Supporter and – of all Places – Apthrop… So a Charming and Charitable Criminal Deserves a Break?

Rechnitz and Reichberg & de Blasio, and One New York and Fairness PAC and Housing and … President and New York?

Bill de Blasio officially launches 2020 presidential campaign

 

He’s late — again.

After nearly half a year of hemming and hawing, Mayor Bill de Blasio on Thursday entered the 2020 presidential race, becoming the 23rd Democrat to join the jam-packed field.

The termed-out politician, known for his habitual tardiness, finally decided to run after five months of toying with a White House bid.

“I’m Bill de Blasio and I’m running for president because it’s time we put working people first,” the mayor said in a three-minute YouTube videoannouncing his candidacy.

The opening shots include de Blasio zipping around the city in the back of an SUV — his gas-guzzling choice of transportation for the 11-mile jaunt from Gracie Mansion to the gym in Park Slope.

“Good thing about New Yorkers is they look the same whether they’re really pissed off at you or they like you,” the mayor quips.

He details his “Working People First” slogan by touting his policy initiatives including pre-K for all, paid sick leave and boosting the minimum wage to $15 an hour.

First lady Chirlane McCray also makes an appearance to briefly plug her mental health agenda.

“Everything begins with being healthy and there is no health without mental health,” she says.

Then, as the White House flashes on the screen to dramatic music, de Blasio pivots to a national message.

“Don’t back down in the face of the bully — take him on,” he says. “As president, I will take on the wealthy, I will take on the big corporations, I will not rest until this government serves working people.”

He also vows to fight President Trump head-on.

“Donald Trump must be stopped. I’ve beaten him before and I’ll do it again,” de Blasio says.

Insiders initially thought de Blasio would announce his national campaign the week of his 58th birthday on May 8, but he delayed.

“So you’re still deciding?” NY1’s Errol Louis asked the mayor on May 6.

“Yes indeed,” the dithering mayor said.

Local political experts can’t fathom what prompted the mayor to take the plunge.

“It’s really hard to understand what lane de Blasio plans to ride to the nomination,” said David Birdsell, dean of the Marxe School of Public and International Affairs at CUNY’s Baruch College.

What’s more, people just don’t like him, polls show.

De Blasio has the dubious distinction of being the only candidate or potential candidate out of 23 contenders to earn a negative rating among national Democrats in a March Monmouth University survey. A total of 24 percent gave him a thumbs down while just 18 percent had a favorable view of him.

At home, the numbers are even worse. A staggering 76 percent of Big Apple voters don’t think he should run, according to an April Quinnipiac University Poll.

To continue reading click here.

The Platinum Investors and the Ultimate Swindle, Blame it on the Victim? And More to Come

The Investors Knew the Risks? Nonsense… Another Platinum Colored Misrepresentation – To the Legal and Judicial Community – Follow the Money

 

Opinion and Analysis – LM – 30.4.19

The claim that investors in the litany of Platinum swindles [Echo Therapeutics, Black Elk, Seabrook’s COBA Fund , Glacial Energy Holdings and Agera Energy LLC, among many others] knew the risks is absurd, utterly absurd. Perhaps if one argues that they should have known that they were dealing with swindlers and therefore the Ponzi Scheme was foreseeable, there is some logic; but no. Such an argument does not hold water, particular in the environment of fiduciary duty and fair dealing. The entire premise is akin to blaming any victim for a crime perpetrated upon him or her. The major difference between the Platinum Ponzi Schemes and brutal, violent crimes is that the investors in Platinum Partners were disavowed of their finances with a measure of finesse, charm and savior faire.  These guys did a better job of conning their victims out of money than Madoff. Madoff’s reputation preceded him, the impossible-to-believe-he-could-do-it criminal. With the Platinum Partners, for those of us who did years of research, it was obvious. For investors, the elegance of the schemes was extraordinary, which makes these crimes almost worse than a violent serial robber, thief or rapist. These guys based their entire swindle on betraying the trust of others.

While Platinum Partners’ investor group was comprised of a fair share of “big-boys” people who were accredited investors or otherwise knew the rules of the investment road, many who were dragged in were friends and people who trusted Platinum’s partners. They “put a little faith in their friends,” far too much faith. Many still do. And those entrusted with the money were pathological scammers, godless characters who thought little of their victims. Friends were nothing more than income sources at the end of the day; or a name to drop for legitimacy purposes. 

Mark Nordlicht, Murray Huberfeld, Uri Landesman, David Levy are brilliant financiers, master manipulators, incredibly savvy and largely charming individuals. Jona Rechnitz and Jeremy Reichberg were peddling the Platinum wares with their friends in high places offering up a glamorous life to anyone dumb enough to take the bait. Jona Rechnitz began his career working side-by-side with diamond magnate Lev Leviev, one of the initial investors in Platinum through Africa Israel, a class-A mentor and the basis for an unbeatable resume. That Jona Rechntiz has made lying into an art form was just another piece to the greater picture of how this entire scheme was orchestrated.

The whole Platinum Partners endeavor had an air of legitimacy that even most savvy and experienced investors would have had a hard time seeing through.  The Platinum Partners’ partners had friends and friends of friends and big names behind them. They painted a very rosy picture and very few high level newspapers covered the unrealistic nature of Platinum’s returns, one of the exceptions being Reuters (Reuters).   

And Platinum chose their investors wisely. People like Norman Seabrook, the head of COBA, were simply not savvy enough to understand that all of the wining and dining was a show of just how stupid Murray Huberfeld thought Seabrook was. We have opined on this before. Sadly, Seabrook was nothing more than a dumb “shvartze” in the eyes of Huberfeld and Nordlicht. It’s a horrible and racist comment, admittedly. But, when examining the nature of the Platinum swindle, it’s simply reality. Seabrook did not have the financial savvy to understand he was being completely steamrolled with the investment being offered to him. And, well… the wining and dining and show of wealth, the trips to Israel and greetings from the un-“pious ones” at the Western Wall was too much temptation when coupled with the returns he was likely being promised and the side money and items being gifted. And with his investment into Platinum, the partners could turn around and show the next guy that they had value. If the head of the COBA investments gave his blessing to the fund, it had to be legitimate. 

The NFL football players, and the payday loans offered to them by a link of Platinum associated entities, was another of the many schemes, a little more unsettling than the others. Investors who were inserting the flow of capital while being guaranteed returns of high interest and fees from NFL players who were on strike and would inevitably be paid. It was a “no-fail” cool trick. While the football players were paying interest rates and savage fees, the Platinum or associated investors were being showered with money. The Platinum associated fund that offered the loans and corresponding investment opportunities was allowing its investors a proverbial taste of fine wine, enticing as it was, and easy money. Little could those investors know that they were being hustled into other more dangerous financial waters.  

While the payday loan piece of the Platinum Partners story has not gotten much press coverage in the grand Platinum fraud, nor have the football players involved, neither the investors nor the players themselves were savvy enough to know that they were being disenfranchised. The players sadly were vulnerable to both the NFL on one side and the fund that was backing them while they were on strike on the other. And these guys did not have the financial savvy or upper-crust white wealthy background to grasp that the millions they were to receive from the NFL was all too easily spent. The Platinum Partners were sharp enough in this game to know, understand and manipulate the mentality, the vulnerabilities and the financial struggles of these players.  Many of those players lost thousands of dollars. All the while, a bunch of hedge fund guys and their investors sat in cushy Herman Miller chairs in their gilded offices and laughed all the way to the bank. The investors who were smart enough to get out might not have lost their shirts. Those who decided to try the next proverbial bottle of wine, were hooked both to the adrenaline and to the returns, little did they know, unless they did. 

And what of the religious investors who saw the Yeshiva connection as a sign of integrity? Torah Usemorah loaned money to a failing hedge fund while the partners donated money to a different yeshiva, or not. Of course if a Yeshiva is going to loan money to a hedge fund, the fund must be worth its weight in salt, yes? No. This was just another part of the swindle. It gave the entire venture a different level of credibility, that of the religious kind.  How were investors supposed to know that the Platinum Partners’ promised returns were a sham when the men in charge looked like G-d-faring philanthropists? 

They couldn’t. 

The picture that was painted was glorious and quite irresistible to investors and adrenaline junkies who sought high returns. Huberfeld’s friendships with Charlie Kushner (albeit a red flag for some) gave him some Wall Street cred. Few remembered that he had hired someone to take his SEC exams years earlier. And the forgiveness he got from the SEC was enough to show the world that if he was donned with his various SEC credentials, whatever he did was worth the forgiveness. And it was not. Someone who does ample due diligence would have stayed far away. But while Murray Huberfeld was convincing his Chabad friends to invest, Jona Rechnitz was peddling Platinum investments to people via his connections with seemingly credible organizations (Simon Wiesenthal Center, the Brooklyn Shomrim, his multiple connection to de Blasio and his Leviev history).

Mark Nordlicht was using his connections to the Westchester Torah Academy and a variety of his long-standing friendships with prominent Jewish families made him look like a reliable place to put some money. He wasn’t. He isn’t. He will never be. We will be surprised if Westchester Torah Academy doesn’t lose its shirt in the end also.

To blame the investors by stating that they knew the risks is a travesty, an affront to morality, ethics and the law. These men spent years and years cultivating and perfecting their ability to defraud the financial system, almost like a master fly fisherman does as sport. The difference is the the fly fisherman is an honest sportsman and doesn’t generally turn around and blame the fish for taking the bait. 

The outcome of this case with all of its many tentacles and the various webs woven will determine how the next aspiring fraudster views the investment climate. If the SEC, the judicial system, and the taxing authorities do not take this seriously and are somehow swayed by the argument that “they knew the risks” the next fraud will be worse and it will likely come from the same people who will either be directly guilty or guilty by mentoring.

Platinum’s partners knew the “friarim” (loose translation – “suckers”) in the system and they are playing those adjudicating these cases for absolute fools. Our financial system is based upon trust. The Investors, defrauded of millions should be able to trust in the system and get justice. The money that was filtered out of these funds can be traced to the personal accounts and trust of the partners, their friends, their shuls or their children. It is not gone and it should be recovered with whatever means are necessary. No one should be fooled here.

To the legal and judicial community, you now know the risks of letting this go without justice.

 

LAW360 – By subscription only

Ex-AG Mukasey Won’t Testify At Platinum Founder’s Trial

Law360 (April 26, 2019, 9:10 PM EDT) — A New York federal judge accused Platinum Partners co-founder Mark Nordlicht on Friday of trying to “dazzle” a jury by having former U.S. Attorney General Michael B. Mukasey testify at his criminal trial, knocking down a subpoena targeting Mukasey and another attorney at Debevoise & Plimpton.

U.S. District Judge Brian M. Cogan granted Mukasey’s bid to quash a subpoena from Nordlicht, on trial for fraud related to the $1 billion hedge fund’s collapse, who’d said in a letter one day earlier that he wanted Mukasey, now of counsel for Debevoise, to testify about his representation of Platinum during a five-month period in 2013 that was “during the heart of the alleged conspiracy.”

Nordlicht said in his letter that “the mere fact of [Mukasey’s] representation is critical and of course has bearing.”
Read more at: https://www.law360.com/securities/articles/1154097/ex-ag-mukasey-won-t-testify-at-platinum-founder-s-trial?