A Platinum 1 Billion Dollar Fraud – Black Elk – Platinum’s Partners and Mark Nordlicht

Dratch, Mark - large_medium
Mark Dratch, why are you not protecting those most vulnerable?

NASDAQ Reporting – A Platinum Fraud, Black Elk and Going Back to 2016… $1 Billion and Counting

NEW YORK, Feb 26 (Reuters) – Former Platinum Partners chief Mark Nordlicht and other executives of the now-defunct hedge fund group are due to go to trial on Tuesday on charges they defrauded investors out of $1 billion.

Opening statements are expected to begin in the morning before U.S. District Judge Brian Cogan in federal court in Brooklyn.

Prosecutors charged the defendants in December 2016 with orchestrating two fraudulent schemes involving Platinum, which struggled to attract large institutional clients despite years of golden returns from niche and unsavory investments.

In one scheme, Platinum was accused of overvaluing its often-illiquid assets to collect higher fees, and falsely reporting annualized returns topping 17 percent.

Authorities said Platinum operated “like a Ponzi scheme” by using new money to fund redemptions by earlier investors, which were referred to internally as “Hail Mary time.”

The second alleged scheme centered on Black Elk, a Platinum-controlled oil exploration company. Prosecutors said the defendants defrauded Black Elk’s bondholders out of $50 million by diverting the proceeds of asset sales to Platinum ahead of Black Elk’s 2015 bankruptcy.

Reuters described Platinum’s use of related parties in its Black Elk bond vote in an April 2016 Special Report:

To read the article in its entirety click here.

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A Platinum Enterprise – Bad Press not Fraudulent Transactions Tanked the Fund

FROM LAW 360

Law360 is a Subscription Only site so we are unable to provide you with the entirety of the article. The Headline is as follows:

Platinum Exec Wants Trial Halted Pending Media Leak Review

We will provide you with a few brilliant highlights in the hope that we are withing the site’s copyright protections; and the we recommend that you subscribe to that site for a constant stream of information, related not only to Platinum, if you are so inclined. There is a wealth of information.

And this is not a paid advertisement. 

Law360 (February 7, 2019, 9:09 PM EST) — Platinum Partners founder Mark Nordlicht asked a Brooklyn federal judge on Thursday to stop the fraud case against him from going to trial until the Second Circuit can review his latest mandamus petition that includes allegations that a prosecutor leaked grand jury information to the media.
Nordlicht, the chief investment officer for the defunct investment firm, has argued damaging stories about Platinum contributed to the failure of its funds, not misconduct by him and co-defendants.
Lawyers for Nordlicht have said the emails, which show reporters from several outlets arranging drinks and meetings with former Assistant U.S. Attorney Winston Paes, strongly suggest Paes provided information about the Platinum investigation that appeared before Nordlicht’s arrest. The government has said the letters don’t evidence a grand jury leak at all, however, and Paes hasn’t responded to comment requests.

We would like it to be known that we did not speak to anyone associated with the Prosecution’s case. We think that the Prosecution is missing information that would make the case even stronger and we would be glad to provide it. We don’t need anything to come to the conclusions we have drawn. It is all out there in public filings.

It did not take a rocket scientist, or even someone particularly savvy to figure out that Platinum and its associated funds were engaging in what was tantamount to a Ponzi Scheme over the course of many, many years. We have pages and pages of research from publicly available sources, subscription sources and our own analysis and we could likely mount a pretty significant case for the allegations for which he is charged and others which may or may not be embedded in the initial charges. 

We would be more than happy to provide assistance. We feel Nordlicht is getting off easy. If the press is blamed for the failure of Platinum’s fund, then some Judge is not doing his or her homework. Investors lost millions and Mark Nordlicht cannot cry poverty. It’s an unfortunate scenario.

And if he gets off easy, it further substantiates our consistent claims (to Norman Seabrook regarding the color of his skin and his lack of political clout) and so many others on this blog, that people are being bought.

Can’t someone bring a modicum of integrity to the system?

Investigation into Platinum Widens, The Direction it Should Take?

 

Our Take on Events –

PLATINUM PARTNERS AND THE NUMEROUS FRAUDS AND PONZI SCHEMES

Since 2016, LM has been reporting on Platinum Partners and the various partners and schemes. It is and has always been our position that Platinum Partners, as a firm, has been nothing more and nothing less than one giant Ponzi Scheme, with some pretty frightening tentacles. Platinum Partners’ establishment with the assistance of then Africa Israel employee Jona Rechnitz, along with other members of AFI is all the more unsettling because we believe the earlier Platinum Fund, itself, was partially financed by Lev Leviev and his connection to the Platinum and its partners cannot and should not be ignored, particularly not by law enforcement reviewing all angles.

We will provide continued information to our readers on investigations it becomes available. Having said that, we do not believe that Murray Huberfeld should be given anything but the harshest sentence and we further believe that if the Platinum Partners’ liquidators are looking for all Platinum’s assets they need begin to look at the personal family fortunes of Huberfeld, David Bodner and Huberfeld’s longtime friend and co-partner Mark Nordlicht.

The men involved in Platinum, Black Elk, Echo Therapeutics, and all of the associated businesses and investments, should be scrutinized, bar none. And Jona Rechnitz should not remain unpunished for his involvement. He knew what he was doing when he introduced Norman Seabrook to the Platinum investments that tanked COBA. He knew what he was doing when he elicited money from Hamilton Peralta.

As we mentioned in a previous post, Murray Huberfeld’s attorneys in their remarkable eloquence would have us believe that he is a great altruist, naive and burdened by a scheme he knew nothing about. That is pure and utter nonsense. The many men involved in years and years of frauds and schemes and their associates are savvy, creative and cunning businessmen. These are not men who should be permitted to walk a higher ground because they purport to believe in a “higher authority” [borrowed from an old advertisement]. We have little choice but to give credit where credit is due and these men, in all of their financially lucrative glory, deserve the lions’ share. On the flip side of that very valuable coin, their moral compasses do not necessarily all point in the same directions as their victims’.

There have been thousands of victims over the years. We should be focusing on them: compensation, investment returns, justice and retribution. The money was siphoned off into personal family funds and other investments. And it should be recovered. 

As to COBA and its heralding a $7M recovery for COBA members, that is a financial farce. Murray Huberfeld will be repaying $4M initially with the additional $3M over time. This is utterly reprehensible as he will have use of funds during that time. He will be generating income over the course of that time. Platinum Partners, the fund, the individuals, should all be repaying COBA and its members, plus interest, investment losses and other compensation. Only then should those currently in charge take pride in their recovery.

 

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Platinum Partners Hedge Fund Investigation Reportedly Widens

 

The Platinum Partners saga may have further twists in store.

The New York-based hedge fund has begun liquidating its funds, after the firm’s longtime associate Murray Huberfeld was accused last month of arranging for a $60,000 kickback to be delivered — in a Salvatore Ferragamo bag — to a correctional officers’ union official in exchange for directing the union’s retirement fund investments to Platinum.

Now, Platinum and its chief investment officer, Mark Nordlicht, may face scrutiny as the probe widens, according to a report from the Wall Street Journal.

Platinum’s woes began with the June 8 announcement of bribery charges against Huberfeld and Norman Seabrook, president of the New York City Correction Officers Benevolent Association.

Prosecutors say that Huberfeld, through an intermediary, arranged for the delivery of the kickback to Seabrook after the union official directed $20 million in union investments into the Platinum Partners Value Arbitrage Fund. Huberfeld then arranged for the hedge fund to reimburse the intermediary for the kickback using a fraudulent invoice for the purchase of New York Knicks basketball tickets, the U.S. Attorney’s Office said. Both Seabrook and Huberfeld pleaded not guilty to the charges on Friday.

The fund itself had not been implicated in the criminal case against Huberfeld, whom prosecutors describe as a co-founder and manager at Platinum, claiming he was not listed on the firm’s registration documents to avoid scrutiny. Huberfeld has been previously fined by the Securities and Exchange Commission.

Federal agents raided Platinum’s office in late June, after the charges were announced, as part of an investigation that’s reportedly separate from the bribery case. And there are other rumblings of wider fallout.

Since its founding in 2003, Platinum Partners has appeared to be one of the world’s best-performing hedge funds, claiming a 17% annual return for its main fund as of last fall. But the firm has made investments in assets that are potentially hard to value or liquidate, such as private placements in a distressed company’s debt. These are known in accounting parlance as “Level 3” assets, which have significant “unobservable” value inputs. Nearly all of Platinum’s investments are Level 3, according to the Wall Street Journal.

Among the illiquid investments are several that have raised eyebrows. In 2007, according to SEC investigators, Platinum created a subsidiary called BDL Group for the purpose of investing in variable annuities for hospice patients, which paid out a bonus when the patient died. Several involved in the plan agreed to pay settlement fines to the SEC, but Platinum and Nordlicht were not accused of wrongdoing.

Other Platinum investments include financing for payday lenders, which offer short-term loans at the equivalent of a 400% annual rate or higher. The industry has long been the target of regulatory crackdowns.

Platinum’s payday borrowers include CashCall, according to Bloomberg. CashCall has been suedby the Consumer Financial Protection Bureau for allegedly charging interest in excess of what state laws allow; the company contests those claims and the case is pending in federal court in Los Angeles.

All of this adds up to signals that, at best, it may take Platinum some time to liquidate its funds, a subject that was already making some investors antsy. Two prominent investors reported Platinum to the SEC in November for non-payment of redemptions, according to The Observer.

The Wall Street Journal, citing sources, now says that the investigation into Platinum is examining whether it overstated the value of its holdings, or paid out exiting investors from new investments or borrowings. A Platinum spokesperson rejected those claims in a statement to the Journal.

To read the article in its entirety click here.

Westchester Torah Academy – and a Ground-broken Historic Cemetery [UPDATED 1.30.18]

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Special Thanks to the Community connected to WTA for their Assistance in Updating this Article [1.30.19]:

The below article was posted in August of 2018 regarding a parcel purchase absent disclosure of a cemetery and the Halachic implications. We thought it of interest but really rather mundane, an interesting question of Halachic law. However, in the last few days the post has elicited a significant amount of attention. What we believed to be a rather academic question seemed to have been far greater; and caring members of the community connected to WTA wanted to correct the record.

As such we have attached as a PDF a copy of the Deed provided to us by a member of the WTA community. deed oct 2015

Pages 7-8 indicate that the cemetery lands are separate parcels from the rest of the property which can be found on pages 5-6.

WTA had a survey conducted, which should be requested directly from WTA, which indicates that the cemetery is divided from the rest of the property with a stone wall and a driveway. As such, if there were even any to begin with, there should be no Halachic problems.

In truth, we suppose that the same Kohanim who cover themselves is plastic bags every time they fly are likely the same people who would not deem themselves suited to go to the academy. They probably should not be visiting large swaths of Manhattan, Queens and Valhalla either.

We offer our sincere thanks to those who helped provide us with the information and the update. We are rarely able to get responses from many of the public schools and Yeshivas with which we are in contact when we have questions to articles or information we receive; and we cannot help but to be appreciative.

LM

UPDATED: 1.21.19 – Apparently we have been advised that the cemetery is an entirely different lot that the academy has committed to maintaining.  

With great pride, the Westchester Torah Academy, Announced their New Location, sans the disclosure of the cemetery.

They Forgot about the Historic Cemetery of Joseph Carpenter, see below.

The property purchased for the future home of the Westchester Torah Academy has a Cemetery on it. The property is located at 150 Stratton Road in New Rochelle and here is a link identifying the Cemetery at this location:
Given the edicts of Jewish law, it’s questionable if Kohanim would be allowed on the property.

Carpenter Cemetery

Source: The Cemeteries of Westchester County, Vol. III, Patrick Raftery, Westchester County Historical Society, 2011.

Location: 150 Stratton Road, New Rochelle, NY. North side of Stratton Road between the driveway for the Saint Nersess Armenian Seminary and the Iona Preparatory School athletic fields (about four-tenths of a mile east of Wilmot Road).

Dates of Activity: 1838 —1905.

Joseph Carpenter was an “old Quaker gentlemen” who owned a farm which during the mid-19th century stretched westward from Weaver Street to the present site of the Saint Nersess Armenian Seminary. Mr. Carpenter served as the executor of the will of Joseph Thomas Turpin, a former slave who owned a parcel on Pelham Road that had once been used by Trinity Church as a cemetery for African Americans. Perhaps through his connection with Mr. Turpin, Joseph Carpenter realized the need for a proper burial place for the black citizens of New Rochelle and its surrounding area. To solve this problem, he donated an acre of his land for use as a cemetery for African Americans in a 1838 deed transferring the land to several municipalities in southern Westchester County, namely, New Rochelle, Mamaroneck, Scarsdale and Eastchester.

Aaron M. Powell, a prominent Quaker and member of the Anti-Slavery Society, commented on Mr. Carpenter’s commitment to providing a suitable burial place for the black citizens of southeast Westchester:
There was much prejudice against colored people in this region, so much, that at that time in New Rochelle colored people were denied burial in any of its cemeteries or burial places. To meet this difficulty Joseph Carpenter set apart a portion of one of the fields of his [New Rochelle] farm as a burial plot for the colored people. By his direction his own body was interred therein. I visited him a short time previous to his death, when he acquainted me with this arrangement for the disposition of his body, as a last testimony against the then prevailing – and, alas, still prevalent – unchristian color prejudice. In accordance with his wish I also attended his funeral, and to those assembled bore my testimony to his memory and great personal worth. It was an occasion long to be remembered. His body, clothed in his wonted plain Friendly costume, was placed for burial, as he had also directed, in a plain, unstained pine coffin. At the conclusion of the services the coffin was carried out upon the lawn, in the shade of the trees he loved so well, and then those in attendance, colored and white, gathered about it to take a last look at the face of him whom they loved and reverenced. Then it was borne by colored men, who had requested the privilege, to its final resting place, among those of the proscribed colored people whom he had befriended. At a later period the body of Margaret Carpenter, the wife, a woman of sterling worth, sharing fully the deep feeling of her husband concerning the great injustice from which the colored people, both bond and free, were sufferers, was also interred in this unique, and now historic, burial plot.

Continue reading

Platinum Receivership Information

 

SECURITIES & EXCHANGE COMMISSION V. PLATINUM MANAGEMENT (NY) LLC, ET AL.

Platinum Receivership


AUGUST 15, 2018 WEBINAR VIDEO – Investor & Creditor Forum

July 23, 2018

VIA WEB POSTING

TO:
FROM:
RE:
Platinum Partners Investors and Creditors
Melanie L. Cyganowski, as Receiver
Investor & Creditor Forum

I am pleased to announce that I will hold a virtual forum for Platinum Partners Investors and Creditors on August 15, 2018 from 12:00 P.M. to 1:00 P.M. Eastern. During the forum, I plan to provide an update on the Receivership, including the steps I have taken since the last forum and our plans moving forward. There will also be time for questions.

Instructions for registering and participating in the forum by computer or telephone are provided below. If you would like to submit questions in advance, or have any questions regarding the forum, please direct them to platinumreceiver@otterbourg.com. Those participating by computer will be able to submit questions during the event using the computer service, but those participating by phone will be on mute and will need to send questions through the platinumreceiver@otterbourg.com email address. Finally, please note that we will utilize a court reporter, as well as video, to record the session. Thank you and I look forward to speaking with you soon.
Sincerely,

Melanie L. Cyganowski
Receiver

You are invited to a Platinum Receivership webinar.
When: August 15, 2018 12:00 PM (Eastern Time – US and Canada)

Topic: Investor & Creditor Forum

BY COMPUTER:

Please click the link below to join the webinar:
https://zoom.us/j/995380643

Please note: You must first download “Zoom” webinar software. Simply google “zoom.us” to download this free software.

OR IPHONE ONE-TAP:

+16699006833,,995380643# -OR- +16468769923,,995380643#

OR TELEPHONE:

Dial(for higher quality, dial a number based on your current location):
US: +1 669 900 6833 -OR- +1 646 876 9923

Webinar ID: 995 380 643

International numbers available: https://zoom.us/u/eBFnaDFpk

NOTICE OF ELECTRONIC SYSTEMS SECURITY INCIDENT

The Receiver is in the process of directly notifying certain individuals whose personal information may have been exposed as a result of a recent security incident involving a single email account on a cloud-based service used by Platinum. Specifically, Platinum recently identified suspicious computer-related activity and as a result, the Receiver immediately engaged LMG Security, a leading independent cybersecurity firm, which has been working to further secure Platinum’s systems, as well as conducting a comprehensive forensic review to determine the scope of the incident, including the specific data which may have been impacted.

Based on the investigation thus far, there was limited unauthorized access to a single email account on a cloud-based service used by Platinum from March 19, 2018 to May 19, 2018. Platinum is not aware of any impact on Platinum’s bank accounts or other assets as a result of this incident, nor is Platinum aware of any attempt to misuse any individual personal information which may have been exposed as a result of this incident.

In addition to its forensic analysis, LMG Security and Platinum took steps to minimize and prevent any additional unauthorized access to Platinum’s electronic systems or data. LMG Security’s findings have been reported to law enforcement and the Receiver’s team and professionals continue to work with the appropriate authorities.

While there is no evidence to suggest that there has been any attempt to misuse any of the personal information which may have been contained in the impacted data, those individuals who may have been directly affected by this incident have, or will receive, individual letters apprising them of the incident and informing them of the services which the Receiver is providing to them in an abundance of caution. Specifically, the Receiver, working with the cyber response team at Garden City Group, has established a call center to respond to inquiries by those individuals receiving letters from the Receiver, and is offering complimentary identify theft protection services through ID Experts®. This service includes 12 months of credit monitoring, a $1,000,000 insurance reimbursement policy, and fully managed id theft recovery services. With this protection, MyIDCare will help affected individuals resolve issues if their identity is compromised.

If you would like further information regarding the foregoing, please call (888) 866-5172.


JUNE 6, 2018 WEBINAR VIDEO – Investor & Creditor Forum

May 15, 2018

VIA WEB POSTING

TO:
FROM:
RE:
Platinum Partners Investors and Creditors
Melanie L. Cyganowski, as Receiver
Investor & Creditor Forum

I am pleased to announce that I will hold a virtual forum for Platinum Partners Investors and Creditors on June 6, 2018 from 12:00 P.M. to 1:00 P.M. Eastern. During the forum, I plan to provide an update on the Receivership, including the steps I have taken since the last forum and our plans moving forward. There will also be time for questions.

Instructions for registering and participating in the forum by computer or telephone are provided below. If you would like to submit questions in advance, or have any questions regarding the forum, please direct them to platinumreceiver@otterbourg.com. Those participating by computer will be able to submit questions during the event using the computer service, but those participating by phone will be on mute and will need to send questions through the platinumreceiver@otterbourg.com email address. Finally, please note that we will utilize a court reporter, as well as video, to record the session. Thank you and I look forward to speaking with you soon.
Sincerely,

Melanie L. Cyganowski
Receiver

You are invited to a Platinum Receivership webinar.
When: June 6, 2018 12:00 PM (Eastern Time – US and Canada)

Topic: Investor & Creditor Forum

BY COMPUTER:

Please click the link below to join the webinar:
https://zoom.us/j/995380643

Please note: You must first download “Zoom” webinar software. Simply google “zoom.us” to download this free software.

OR IPHONE ONE-TAP:

+16699006833,,995380643# -OR- +16468769923,,995380643#

OR TELEPHONE:

Dial(for higher quality, dial a number based on your current location):
US: +1 669 900 6833 -OR- +1 646 876 9923

Webinar ID: 995 380 643

International numbers available: https://zoom.us/u/eBFnaDFpk

DECEMBER 20, 2017 WEBINAR VIDEO – Investor & Creditor Forum

MELANIE L. CYGANOWSKI, RECEIVER c/o Otterbourg P.C. 230 Park Avenue, 30th Floor New York, NY 10169 E-mail: platinumreceiver@otterbourg.com Website: www.PlatinumReceivership.com

MARCH 1, 2018 WEBINAR VIDEO – Investor & Creditor Forum

Letter to Redress Bond – A Platinum Idea – Mark Nordlicht and More

MarkNordlicht

THE PLATINUM PARTNER AND THE FEE FOR HIS FREEDOM – BUT WHAT ABOUT THE VICTIMS?

Mark Nordlicht has apparently written a letter to the court asking for a reduction in Bond. We cannot publish the letter here because it is available on the PACER site for a fee. We have provided the links since August 6th. You will likely need to pay a fee to view the documents.
369
08/06/2018
Letter in Further Opposition to Defendant Mark Nordlicht’s Application to Travel as to Mark Nordlicht
370
08/07/2018
Letter in Response to Government’s Opposition as to Mark Nordlicht
372
08/08/2018
Letter by the government, dated August 8, 2018, requesting that the Court schedule a status conference regarding the defendant Mark Nordlicht’s bond and his travel to Israel as to Mark Nordlicht
08/09/2018
SCHEDULING ORDER as to Mark Nordlicht re 372 Letter. Status Conference set for 8/10/2018 at 9:45 AM in Courtroom 8D South. Ordered by Judge Brian M. Cogan on 8/9/2018. (Text entry; no document attached.)
373
08/09/2018
Letter Request to Appear Telephonically at August 10th Status Hearing as to Mark Nordlicht
08/09/2018
ORDER as to Mark Nordlicht re 373 Letter requesting to appear by telephone. Application Granted. Defense counsel shall call chambers at 718-613-2230 at the scheduled time. Ordered by Judge Brian M. Cogan on 8/9/2018. (Text entry; no document attached.)
374
08/09/2018
Letter Response to Government’s August 9th Request for Status Hearing as to Mark Nordlicht
08/10/2018
Minute Entry for Status Conference as to Mark Nordlicht held on 8/10/2018 before Judge Brian M. Cogan. AUSAs Lauren Elbert and Patrick Hein. Defense Counsel: Lisabeth Fryer and Ronald Sullivan by telephone. Counsel waives their client’s appearance for reasons stated on the record. (Court Reporter Sophie Nolan.) (Text entry; no document attached.)
378
08/16/2018
Letter Notice of Hearing on Government’s Motion to Readdress Bond as to Mark Nordlicht
08/16/2018
SCHEDULING ORDER as to Mark Nordlicht re 378 Letter. Hearing on Government’s Motion to Readdress Bond set for 8/23/2018 at 4:30 PM in Courtroom 8D South. Ordered by Judge Brian M. Cogan on 8/16/2018. (Text entry; no document attached.)