Rescue crew surrounds an oil platform operated by Houston-based Black Elk Energy which exploded off the coast of Louisiana in the Gulf of Mexico, in this November 16, 2012 file photo. REUTERS/Sean Gardner/Files
UNITED STATES – MARCH 10: Bernard Madoff, founder of Bernard L. Madoff Investment Securities LLC, leaves federal court in New York, U.S., on Tuesday, March 10, 2009. Madoff, 70, will plead guilty on March 12 that he directed a fraud that totaled as much as $64.8 billion, the largest Ponzi scheme in U.S. history, his lawyer Ira Sorkin said in a court hearing today. Madoff, free on $10 million bail, faces life imprisonment. (Photo by Jin Lee/Bloomberg via Getty Images)
“THE TRAIL OF PEOPLE WHO CALLED HIM THEIR BROTHER, THEIR BEST FRIEND”…
We have read dozens of comments about Huberfeld, Nordlicht and Landesman, amongst others, many of which accuse us of attacking their friends. We have one particular commenter who thinks we should leave this story alone, particularly where Huberfeld is concerned. He is a good person, she says. He has family. He did not go in intending to defraud his investors.
Yes. He did. As did the others.
She then said that if people lost their children’s college funds they were, in sum, foolish to have invested it all. Well, the same has been said of Madoff. In fact, in some interview somewhere Madoff is quoted as saying something like: If they were stupid enough to trust me with all of their money, they deserved to lose it.
We beg to differ.
Platinum’s partners are serial manipulators, preying on the greed of some, the weakness of others and the trust of their friends and families. You, the investors were taken for a ride. The same can be said of Madoff’s investors.
LEVIEV’S IMAGE AS NO. ONE PHILANTHROPIST MADE POSSIBLE BY USE OF AFRICA-ISRAEL FUNDS, HAS SERVED HIS PRIVATE FINANCIAL STANDING WHILE CONCURRENTLY DEFRAUDING INVESTORS – LETTER TO THE EDITOR
We received the following letter to the editor which we are publishing as such. We were asked to kindly protect the author’s anonymity and are so doing. We have made very few edits.
We note that the author’s comments came to us without the source material and we will provide as it becomes available. We do not believe the lack of sources to preclude its publication and we welcome any comments.
I am writing to you as a follow-up to your articles regarding Lev Leviev, 23 Wall Street, Arkady Gaydamak, Africa Israel and the numerous interrelated properties, investments and contributions. I thought you should be aware of the following and would be grateful if you would publish. As a preface to my comments, you have already published information regarding lawsuits between Mr. Gaydamak and Mr. Leviev, which have been and continue to be ongoing. You may or may not know the history of those lawsuits or have access to the truth and accuracy of the occurrences and significant nuances. I write to you as a person with an intimate understanding of those events.
In 2012, in the course of the hearings in front of the High Court of Justice of London, where Gaydamak sued Leviev alleging Leviev fraudulently denied the existence of the Trust Agreement by which Leviev had the obligation of trust towards Gaydamak, the Justice Lord Jeffrey Vos (who is a Jew) said to Leviev at the beginning of the trial that Leviev is widely known in the world as one of the biggest financial contributors to the Jewish communities. He then asked Leviev how much he contributes Jewish causes. Leviev cast down his eyes and replied that, in accordance with the Jewish tradition that he respects, the amount of “tsedaka” should not be proclaimed publicly by the contributor, and then Leviev wrote some figures on a paper and presented it only to the judge’s eyes. Justice Lord Vos was visibly impressed.
There is no doubt that this event, which by no means should normally influence the “discovery of the truth”, nevertheless has influenced the opinion of Justice Vos concerning Leviev.
However, Leviev was not precise, that all his so-called contributions are made by fraud from the account of the public company “Africa-Israel” where Leviev is a major shareholder. The so-called contributions that he widely advertises, are in reality, paid by the shareholders who are mainly pension funds, with the money of the pensioners.
It should be noted in the context of many of your articles, “Africa-Israel” never reimbursed their investments.
Leviev also did was not punctilious to Justice Lord Vos and generally, when he failed to specify that all his so-called contributions are destined specifically for the Federation of the Jewish Communities of FSU where Leviev is a Head and where the so-called spiritual leader is Berel Lazar, who was to be the safeguard of the trust in question is rabbi. In exchange for this financing Berel Lazar blindly supports all frauds of Leviev who, in order to commit his frauds, has built for himself an artificial image of the man who respects the rules of Torah.
The representative of “Africa-Israel” bondholders Dan Avnon stated: “We find it’s unacceptable that “Africa-Israel” which hasn’t been able to repay money to its creditors, is making donations to third parties”.
Then, the public company “Africa-Israel”, in order to cover and justify Leviev’s frauds, issues official statements full of arrogance, such as: “Africa-Israel” sees itself as committed to active involvement in society and the community in which it operates together with its businesses, operations and entrepreneurship. In this spirit, all of “Africa-Israel” subsidiary companies undertake a wide range of community activities in the countries in which they operate, which is expressed among other ways in money donations and voluntary activities”.
This arrogant official statement of the public company “Africa-Israel” is the obvious evidence that Leviev, in order to build his artificial image of one of Judaism’s top philanthropists , is in actuality stealing from the public company and using not his own money but public money to further his own interests.
As in many other similar cases of severe breach by Leviev and “Africa-Israel” of law and regulations imposed upon public companies, the Stock Exchange Regulators are strangely silent.
Thus, in the course of the hearings in the High Court of Justice in London, Leviev, in order to obtain a favourable opinion about himself, lied to Justice Lord Vos concerning Leviev’s so-called contributions to the Jewish community.
The new buyer, as you will see below from the article on the bottom of the page, Jack Terzi, lacks certain social graces (or did in 2012). He apparently was an abusive boss who, according to reports in the NY Daily News from 2012, engaged in bizarre behavior. In the interest of full disclosure, his employees at his yogurt shops felt that he was “strictly business” and “humble.” Hard to tell.
We can say this:
It would not surprise us if nestled within the many companies listed on the Africa-Israel website with reference to the Israel Stock Exchange we were to find the new J.P. Morgan buyer’s name, his company or some financial/management synergy with Africa Israel and perhaps concurrently with China Sonangol. It will take a while to find and some might write this one off as a leap. We don’t think so.
It is a Buyer’s market not a Seller’s market in Manhattan right now (if the comment about the losses below by The Real Deal is any indication). China Sonangol/Africa-Israel/Sam Pa/ want out of New York but we doubt they would take a financial loss. We think that it will prove to be anything but a loss.
The company is traded on the Tel Aviv Stock Exchange.
For more information, please press on the image below.
Africa Israel Properties
Africa Israel Residences
Africa Israel Industries
Paydirt: The Compass unicorn, a more modest buyer pool, 23 Wall in play … & more
Billionaires hiding? We’ll take the millionaires: Compass’ valuation comes at a time when Manhattan’s high-end residential market is taking body blows. Developers finally seem willing to accept things aren’t where they were in 2014. They’re either offering fat discounts (Extell at One Manhattan Square, World Wide Group and Rose Associates at 252 East 57th Street), pushing sales back (JDS & PMG at 111 West 57th Street) or abandoning ship (Witkoff at Park Lane, Chetrit & Bistricer at the Sony Building). “The next two years will be the year of the deal,” PMG’s Kevin Maloney told Bloomberg.
Developers who set their sights a little more main street have been faring better: Condos priced between $500,000 and $999,000 have sold five times as fast as their $10 million-and-up counterparts, according to a Miller Samuel analysis of a decade of residential sales.
You don’t know Jack: JTRE’s Jack Terzi is in contract to buy 23 Wall Street, a landmarked property that was once the headquarters of J.P. Morgan & Co. – it was dubbed the “House of Morgan” — but of late has been a pox on Lower Manhattan. The long-vacant building is owned by the shadowy China Sonangol, a joint venture between Sam Pa’s Queensway Group and the nation of Angola — go figure. Sources told the New York Post that Terzi will be buying the property at a discount to the $150 million Sonangol paid for it in 2008. That’s hard to fathom, except for the fact that Pa is under investigation for allegations of financial crimes, according to the FT.
Terzi, who grew up in Gravesend and cut his teeth at Hidrock Realty, has made a number of splashy acquisitions of late, including a number of $20 million-plus buys in Midtown East. But this deal, if he does close on it, elevates him to a different level — giving him control of more than 130,000 square feet in the heart of Lower Manhattan.
Ex-worker suing real estate boss, Jack Terzi, for $5 million for abuse, fines, and urinating
A foul-mouthed boss from hell unzipped more than his lip in torturing his young assistant.
Brash real estate broker Jack Terzi urinated on the underling’s clothes during a three-year reign of terror in their Manhattan office, according to a astonishing new lawsuit.
The allegedly abusive broker was accused by ex-employee Albert Sultan of abuse that included cutting four-letter insults, sharp flying objects and bizarre fines.
Sultan, hired shortly after Terzi launched his company in 2009, “became emotionally distraught, was humiliated and embarrassed … by the systematic and continuous unlawful harassment,” charged the 15-page suit filed Wednesday.
Court papers contain a cruel recital of Terzi’s perverse management style, including the time he “urinated on a garment” belonging to Sultan as others watched.
Terzi was accused of throwing a shoe and a pair of scissors at his young assistant, hurling insults like “f—— idiot” and “piece of s—“ — and repeatedly “sneezing in (Sultan’s) face in a contemptuous fashion.”
Terzi, in a countersuit, charged Sultan was a conniving backstabber who launched his own business with confidential information stolen from Jack Terzi Real Estate.
Sultan, of Eatontown, N.J., declined further discussion about his ex-boss.
In 2014, THE REAL DEAL reported on the investigation which had been launched by AG Eric Schneiderman into the partners’ Boymelgreen and Leviev’s luxury real estate business. Schneiderman’s focus at the time was 20 Pine Street and 15 Broad Street. The Broad Street location is only steps from 23 Wall Street, The JPMorgan building, a location which we view as far more important in the architectural structure that supports if not fosters corruption in New York and elsewhere.
In 2014 Schneiderman sought to enjoin Boymelgreen from doing business in New York until it could be determined whether Boymelgreen’s son, Sam, was acting as a frontman for his father’s business.
Today, it was reported that Boymelgreen will be “banned” from selling condos in New York. The humor in the settlement can be found in son – Sam, mentioned in THE REAL DEAL article in 2014. Is he not still to be a “front” and center concern in the family business?
We don’t hear much about Sam Boymelgreen but we do know that he is not precluded from doing business in New York. Why was he not included in the settlement? Or, did we miss something?
Certainly AG Schneiderman had to have considered in 2016 what was unsettling in 2014, that when father and son are engaged in the same business, a ban is not really a ban it is an invitation to switch heads of state. Or… rather… heads of family businesses.
We have posted the New York Times article regarding the audacious 2-year ban settlement for papa Boymelgreen. Below that, we have posted the article from THE REAL DEAL in 2014.
We repeat and reiterate, little has changed. Except perhaps, that while we have followed the news and learned that one must be wary of Boymelgreen, Leviev and others; Schneiderman has missed the current events page in his syllabus. He seems to think that a 2-year ban has meaning. It does not.
Before federal agents raided the offices of Platinum Partners in June, the $1.2 billion hedge fund had been reporting robust returns, thanks partly to oil fields it owns in California.
Platinum counted the oil fields as its most valuable asset, worth many times what it paid for them, according to its most recent audited financial statement. But the project was a flop that never produced much oil and wasn’t worth nearly as much as Platinum said, according to three people who were involved with the operation and who asked not to be named discussing the private business.
Whether Platinum properly accounted for hard-to-value assets, including the oil fields, is at the center of a probe by federal prosecutors in Brooklyn, according to a person with direct knowledge of the matter. Illiquid assets like the oil fields accounted for about $800 million of the firm’s main fund at the end of 2014, according to the financial statement.
Platinum, which has reported average annual returns of 17 percent since 2003, reassured investors after the raid that its valuations are accurate and they’ll get all their money back, plus gains. Montieth Illingworth, a spokesman for Platinum, declined to comment for this story, as did a spokeswoman for Brooklyn prosecutors.
Focus on Lending
Mark Nordlicht, a commodities trader, founded Platinum in 2003, with seed money from Murray Huberfeld, a penny-stock trader from Brooklyn whose family owned kosher restaurants. Huberfeld was well-connected in New York’s orthodox Jewish community and raised money from some of its wealthiest families.
Huberfeld was arrested in June for allegedly bribing a union chief to invest in Platinum and pleaded not guilty. Nordlicht has not been accused of wrongdoing.
Platinum’s specialty was making secured loans at high interest rates, some to risky companies like payday lenders, and taking stakes in borrowers. By 2012, Platinum’s initial investors had quadrupled their money.
Platinum had been lending to energy companies, and with the price of crude rising in 2012, Nordlicht decided it was time to take a more active role in drilling. Oil had more than doubled from its 2008 lows to about $100 a barrel.
In April 2012 Platinum spent an initial $6.5 million to buy into Golden Gate Oil, a 2,000-acre string of oil fields in California’s Santa Maria Valley, about 150 miles northwest of Los Angeles.
The fields had been drilled extensively by Unocal Corp., now part of Chevron Corp., which abandoned them in the 1980s. The plan was to drill in new locations between some of Unocal’s more widely spaced wells, said Stephen Lieberman, a petroleum engineer who helped put the Golden Gate deal together and then consulted for the firm for a few years. Golden Gate didn’t return messages seeking comment.
Nordlicht visited the fields several times to meet with the oil men and discuss the drilling plans, Lieberman said. The hedge fund founder wasn’t an expert on the engineering but believed in the project’s potential, he said.
“I had to train this guy, Nordlicht, on what he was doing and why we were doing it,” Lieberman said. “He picked it up like crazy.”
Platinum commissioned a report by oil appraiser DeGolyer and MacNaughton. The firm said in its 2013 report that the fields held 16 million barrels of proven reserves worth more than $600 million. DeGolyer and MacNaughton declined to comment.
A reserve estimate measures how much oil can be profitably extracted from a field at current prices. If drilling proves more difficult than expected, or prices drop, an explorer might not be able to produce that much.
Golden Gate drilled six wells in 2012, but only one ever produced more than a token amount of oil, records from California’s oil regulator show. To boost production, the company decided to start drilling horizontally — wells that started downward, then curved to approach the oil from the side.
Two J-shaped wells were drilled in January and February of 2014. Oil workers missed the payload because they couldn’t turn the drill hard enough to reach it, Lieberman said.
Platinum spent several million dollars in preparing to drill these wells and Nordlicht got angry when he learned of the failure, Lieberman said. Nordlicht then fired Golden Gate’s chief executive.
Valuing Oil Assets
The drilling problems weren’t mentioned in June 2014 when Sterling Valuation Group Inc. prepared one of the periodic reports on Platinum’s portfolio that the hedge fund used to calculate its results. Sterling Valuation said Platinum’s stake in Golden Gate was worth $176 million as of March 31.
Sterling said in the report that Platinum told it that Golden Gate’s eight wells were producing around 60 barrels each per day as of the end of March. That’s a lot more than the production figures in the California records. They show seven of the eight wells were idle for the first three months of 2014, and the one active well produced 36 barrels a day. In 2013, Golden Gate’s total production averaged 41 barrels per day.
The three people who were involved with the operation said the Sterling valuation was too high. One of them estimated the oil fields would have fetched about $10 million at the time.
Sterling, which stopped working for Platinum last year, said in a statement that its valuation report was based on information largely provided by Platinum and the DeGolyer and MacNaughton report.
“If Platinum Partners and others provided incomplete or inaccurate information, then we would no longer stand by the report,” the statement said.
I seem to recall us posting articles detailing the links between Platinum and Rothstein several weeks ago in a few different articles. We even drew a diagram as intertwined, however, as the schemes themselves. Unfortunately, we are not credited with the following story, but if you have been reading our Platinum postings, you read about the below links before now… Keep following, more to come…
Platinum Partners, the hedge fund at the center of an alleged New York City municipal union kickback scandal, has a history that’s sordid even for Wall Street — with alleged ties to one of the largest Ponzi schemes in history, and a confusing trail of documents that raise more questions than answers, The Post has learned.
Murray Huberfeld and Mark Nordlicht, two top executives of the $1.3 billion fund, allegedly enlisted other hedgies and their wives to invest in a feeder fund for Scott Rothstein, a trustee lawsuit claimed.
Rothstein was convicted of running a Florida Ponzi scheme and is now serving 50 years for racketeering and securities fraud, according to court documents.
Rothstein scammed investors by getting them to bankroll fake lawsuits for litigants who couldn’t afford to pay for their own litigation, with the promise of repaying those investors with settlement money, which turned out to be fake, court documents show.
It ran from 2005 to 2009, and ballooned to $1.2 billion in part because of the investments made by Huberfeld and Nordlicht, according to the suit.
A group of hedgies and their wives were accused in a civil suit brought by the trustee in charge of unwinding Rothstein’s scam of knowing ahead of time that they were funding a Ponzi scheme — a claim they deny. The civil suit was settled in 2012 for $38 million.
Platinum came into the public eye through the charges brought against Norman Seabrook, the ex-head of the NYC correction officer’s union, who pleaded not guilty on Friday to allegedly taking a $60,000 bribe for a $20 million investment in Platinum. Huberfeld has also pleaded not guilty. Nordlicht has not been charged.
Platinum is now in the process of liquidating all three of its funds, Montieth Illingworth, a spokesman for Platinum, told The Post.
Like Rothstein’s fund, Platinum invests in hard-to-value assets, like life settlement policies.
Because its assets are so esoteric, investors were almost entirely dependent on Platinum to say how much they were worth. In one report obtained by The Post, the fund showed gains in 119 out of 120 months in its main credit fund.
Illingworth told The Post that the fund used an “industry standard” metric to value its assets, but declined to describe it, or who developed those metrics.
He added that a valuation committee, which included Nordlicht, met monthly.
The company’s auditor, CohnReznick, didn’t return a call seeking comment.
TO THE U.S. SECURITIES AND EXCHANGE COMMISSION, TO THE U.S. ATTORNEY’S OFFICE, TO THE DEPARTMENT OF JUSTICE – ANYONE HIRED BY PLATINUM IS PAID BY PLATINUM….
GET YOUR OWN INVESTIGATORS IN TO OVERSEE THE LIQUIDATION!!!! THERE IS MONEY – A LOT OF IT…LOOK TO THE CHABAD COMMUNITY AND FOLLOW THE TRAIL…
The event driven investments into life insurance policies likely came from the Shlomo Rechnitz nursing homes in California – a scheme to invest in the death of people who signed policies without knowing what they were signing.
Black Elk was a mining venture – the investors lost millions in oil mines.
New Mountain Finance sustained losses, but not really.
Africa Israel and Lev Leviev were connected to Platinum Partners, as was Jona Rechnitz who worked for Leviev and introduced Seabrook and Peralta to Platinum.
Donations and money, programs and prestige was filtered through the Simon Wiesenthal Center and other quasi “philanthropic” but in no means altruistic donations.
There is a trail…. The little stones are still waiting on the path to be found…
It is our firm position that Murray Huberfeld, David Bodner, their families, their foundations, their wives are sitting on cash and diamonds slowly but surely skimmed and hidden. We believe, based upon credible sources, that Huberfeld’s plea will allow him to return to immense wealth and allow his family and that of Bodner to live in luxury in the meantime.
YOU MUST FOLLOW THE MONEY. LOOK AT THE INVESTMENTS. IT’S IN GEMS AND IN OIL WELLS – BLACK ELK…
Platinum Partners to liquidate two main funds amid government probes
Platinum Partners has hired an independent monitor to oversee the liquidation of its two main hedge funds amid investigations by U.S. authorities, according to a letter sent to investors on Wednesday.
The U.S. Securities and Exchange Commission (SEC) has requested information from New York-based Platinum, according to a person familiar with the situation.
The U.S. hedge fund manager said last month it was likely to return the assets of its largest and oldest fund to clients following the arrest of a longtime associate on allegations he orchestrated a $60,000 cash bribe to secure an investment from a New York City union.
The SEC probe comes on top of a Department of Justice inquiry and a raid by Federal Bureau of Investigation agents last month. The focus of the various reviews was unknown and it was not clear if they are related.
To ensure the assets from its funds are distributed fairly, Platinum has hired Bart Schwartz of Guidepost Solutions to “assist…with the development and implementation of a plan for the orderly liquidation of the Funds under management,” according to a letter he sent to Platinum clients.
Guidepost will also report to the SEC at least monthly, Schwartz wrote in the letter, which was seen by Reuters. The communication with the SEC will include the sale of assets from Platinum’s portfolios and any potential violations of federal securities law, he wrote.
An SEC spokesman declined to comment.
Platinum, founded and led by Mark Nordlicht, has produced exceptional profits for investors since it launched in 2003. But the firm’s strategy of lending to troubled companies carries risks that have scared away many large investors. (See Reuters Special Report on Platinum from April 2016: here)
Platinum’s investors have been rattled by the arrest of longtime firm associate Murray Huberfeld on wire fraud charges related to a separate New York City corruption investigation by the U.S. Department of Justice. Huberfeld plans to plead not guilty, according to his attorney.
The firm recently blocked redemptions from its flagship Value Arbitrage fund and told investors they would not receive anything until at least 2017, according to Robert McIver, a Platinum client who has requested his money back.
The source who said the SEC was investigating the firm also said it would remain in business despite the gradual liquidation of the Platinum Partners Value Arbitrage Fund and the Platinum Partners Credit Opportunities Fund. The two funds contain the large majority of Platinum’s assets, about $1.35 billion as of April.
The source declined to be identified because the information is private.
“Bart Schwartz will play a key role in ensuring that investors’ best interests are served as we monetize the funds and meet redemptions,” Platinum said in an emailed statement. “His standing with the investment community, regulators and law enforcement is beyond reproach and we’re very pleased to have his assistance.”
Schwartz was chief of the criminal division in the Department of Justice’s Southern District of New York and more recently worked as the appointed receiver of hedge funds run by J. Ezra Merkin that invested in Bernard Madoff’s Ponzi scheme and a compliance consultant for the Department of Justice to monitor Steven Cohen’s Point72 Asset Management.