- Murray Huberfeld, Norman Seabrook both accused of corruption
- Charges stem from alleged $20 million pension fund investment
A New York hedge fund manager was accused of bribing the head of New York City’s corrections officers’ union with a Ferragamo bag stuffed with $60,000 in cash to secure a $20 million pension investment.
Murray Huberfeld, 55, a manager at Platinum Partners LP, and Norman Seabrook, 56, the union chief, were charged Wednesday for the two-year scheme that began in November 2013, according a complaint filed in Manhattan federal court. Huberfeld was described by the government as a co-founder of the hedge fund who secretly helped run its daily operations.
Prosecutors wiretapped a cooperating witness’s phone to gather evidence against the men. The witness, who hasn’t been identified by prosecutors, acted as an intermediary between the men and was allegedly told by the union boss when the scheme began that it was time “Norman Seabrook got paid,” Manhattan U.S. Attorney Preet Bharara told reporters Wednesday.
Seabrook “made decisions how to invest the nest egg for thousands of hard-working public servants, based not on what was good for them, but on what was good for Norman Seabrook,” Bharara said.
Seabrook’s lawyer Paul Shechtman said the labor chief would fight the charges.
“Norman Seabrook has spent his life fighting for corrections officers. One should not expect him to stop fighting now,” Shechtman said.
Huberfeld’s lawyer, Eliot Lauer, declined to comment on the case. Mark Nordlicht, one of Platinum’s founders, didn’t return phone and e-mail messages seeking comment about the charges.
Huberfeld was allegedly introduced to Seabrook in 2013 by the cooperating witness who was aware that the fund manager was attempting to attract new investors beyond the high-net-worth individuals who typically invested in the fund, prosecutors said. The witness has pleaded guilty and is helping the government with its case.
The fund manager arranged to make payments to Seabrook using the witness as an intermediary, Bharara said. Seabrook was to be paid a portion of the profits from the union’s investment, which Huberfeld estimated would be between $100,000 and $150,000 a year, the government said.
The pension invested a total of $20 million in 2014, the largest investment in Platinum Partners’s Value Arbitrage Fund during that period, Bharara said. Seabrook’s union money came at a time when other Platinum investors were withdrawing funds, as much as $44 million by December 2014, according to to the U.S.
By the time the government subpoenaed Platinum and the union in May 2015, there were no more investments, prosecutors said.
Seabrook and Huberfeld, who were released on bond Wednesday by a federal magistrate in Manhattan, face as long as 20 years in prison if convicted of conspiracy or a second count of honest-services fraud, prosecutors said.
Huberfeld’s role at Platinum Partners wasn’t publicly disclosed in part because of his background, Bharara said Wednesday.
In 1992, the fund manager and his former business partner pleaded guilty to misdemeanors for sending others to take brokerage-licensing tests for them, according to court records. In 1998, they were in trouble again for illegally selling restricted stock and were ordered to pay $4.7 million by the U.S. Securities and Exchange Commission, according to the SEC.
The case is U.S. v. Seabrook, 16-mag-3626, U.S. District Court, Southern District of New York (Manhattan).