District Judge Alvin K. Hellerstein Got It Right, Those Who Think Otherwise Are Missing the Point
Murray Huberfeld in November 2017 outside federal court in lower Manhattan. Photo Credit: Charles Eckert
We believe, in no uncertain terms, that District Judge Alvin K. Hellerstein, got it very right to the extent of his available sentencing capacity when he sentenced Platinum founder Murray Huberfeld to 30 months and $19M.
Judge Hellerstein understood the magnitude of the crime that Huberfeld perpetrated on the COBA members. He was clearly aligned with he notion that you cannot punish the bribed without punishing the person or people who orchestrated the scheme underlying that bribe. And Platinum Partners in all its glory was a scheme. Hellerstein recognized that Huberfeld’s “conduct was not only corrupt and criminal, but led to the loss of millions of dollars of union retirement benefits,” Manhattan U.S. Attorney Geoffrey Berman said.
According to the article in the Daily News “
Prosecutors considered Huberfeld, who was the briber, less culpable than Seabrook, the bribe-taker. Assistant U.S. Attorney Martin Bell noted that Seabrook had deceived the correction officers he represented.
“(Huberfeld) didn’t know the correction officers. They didn’t know him. He had no responsibility to them,” Bell said.
Huberfeld attorney Henry Mazurek insisted that his client had not known that Platinum was doomed at the time he paid the bribe. Rather, Huberfeld had sought out COBA — using crooked Mayor de Blasio donor Jona Rechnitz as an intermediary — to boost his own status within the hedge fund.
For Assistant US Attorney, Martin Bell, to agree with Huberfeld’s attorneys is ridiculous. With all due respect it shows a fundamental lack of understanding of our financial system, a lack of clarity with regard to Huberfeld’s long history of trampling on our legal and financial system and a lack of disregard for the victims of Platinum’s fraud. US Attorney Martin Bell should be celebrating the work he did that led to Judge Hellerstein’s rulings, rather than giving impetus for a litany of appeals on the part of Marty Huberfeld.
We applaud Judge Hellerstein’s comments with regard both to Huberfeld’s attorneys’ statements and if in agreement the statements of Bell when, as the Daily News states:
But Hellerstein called that argument “nonsense.” He held Seabrook, Rechnitz and Huberfeld jointly liable for the loss of the investment.
Hellerstein’s assessment of the absurdity of this argument speaks volumes.
Under legal regulatory guidelines a person who pedals an investment has a fiduciary duty to the investor, whether they know that investor or not. For a contrary argument to have even been raised highlights a lack of understanding of the SEC and the protections put in place to safeguard investments.
Were COBA to have been an ERISA fund, the fiduciary duty would have been greater. These were the livelihoods of people at stake, their futures and those of their children and grandchildren we placed at risk. And Murray Huberfeld knew it the moment he solicited the investment and bribed Norman Seabrook to transfer funds. The COBA investments and the fiduciary duty of Platinum’s partners and Norman Seabrook are the very foundation of investment policy. And they are no less legally bound.
The bribery and fraud underlying the loss of those investments was criminal. It lacked moral boundaries, put the foundation of the US financial system at risk and raises questions regarding the safeguards in place for investors.
Assistant US Attorney Martin Bell’s comments, if not taken out of context in the various new articles, increases the magnitude of the risks that Huberfeld and those like him pose to investors, if appropriate punishments are not levied.
A hedge fund founder from Lawrence who was part of a scheme to bribe the leader of New York City’s correction officers union to invest $20 million in his firm was sentenced to 30 months in prison Tuesday, officials said. His attorney vowed to appeal the term.
Murray Huberfeld, 57, who founded Platinum Partners hedge fund, was sentenced by U.S. District Judge Alvin K. Hellerstein in connection with the transfer of $60,000 that prosecutors said was used to bribe Norman Seabrook, the former president of the Correction Officers Benevolent Association, to invest tens of millions in Platinum.
In all, the union lost $19 million of its $20 million investment with Platinum. As much as $15 million was from a retirement benefits program funded by the City of New York that invests money for correction officers’ retirements.
Huberfeld pleaded guilty in May to wire fraud conspiracy. Specifically, he pleaded to conspiring with Jona Rechnitz, a real estate businessman and star government witness in several federal corruption trials, to cause Huberfeld’s hedge fund to pay $60,000 to Rechnitz’s company by falsely representing that the money was payment for courtside tickets to eight New York Knicks basketball games.
Prosecutors said that money was really intended for Seabrook, a payment for making the investment of the union’s funds. Rechnitz had testified in Seabrook’s trial that he delivered $60,000 in cash to Seabrook in a Salvatore Ferragamo bag in 2014 after the union’s funds were invested with Platinum.
“Not content with being a successful businessman, Murray Huberfeld sought to grow his fund through fraud and deception, playing a critical role in a pernicious kickback scheme,” said Manhattan U.S. Attorney Geoffrey S. Berman in a statement. “His conduct was not only corrupt and criminal, but led to the loss of millions of dollars of union retirement benefits. The sentence imposed today reflects the magnitude of his crimes and untold pain his conduct caused to others.”