The credibility of Jona Rechnitz, the investor turned informant who became a key figure in multiple probes of New York City political corruption, is expected to be front and center this week as former city jail guard union boss Norman Seabrook’s bribery trial opens in Manhattan federal court.
Seabrook, 57, the longtime power broker who headed the New York City Correction Officers’ Benevolent Association, is charged with taking a $60,000 payoff from co-defendant Murray Huberfeld to invest $20 million in union pension money with Platinum Partners, a hedge fund the government says was desperate for money.
But Rechnitz — a political donor linked to the pay-to-play scandal around Mayor Bill de Blasio, graft at the NYPD, and two Ponzi schemes — was the alleged intermediary for the payoff to Seabrook, delivering cash stuffed in a Ferragamo bag to the union boss, according to prosecutors.
It will be his first public appearance on the witness stand since emerging as the central figure in the swirl of scandals, and from day one Seabrook’s lawyer has signaled that Rechnitz’s credibility and motives to curry favor with the government by lying will be the central focus of the defense.
“Jona Rechnitz and the truth have never occupied the same room,” Seabrook’s lawyer Paul Shechtman said last week, “and I don’t expect this courtroom to be the first time.”
Rechnitz, a Brooklyn real estate developer and donor to de Blasio with connections in City Hall, first surfaced in a probe of a Ponzi scheme involving Harlem restaurateur Hamlet Peralta, who has since pleaded guilty, according to court filings.
Wiretaps in that case led to an investigation of de Blasio’s fundraising practices — which did not result in charges — and a still-pending case against two top-ranking cops for allegedly taking $100,000 in payoffs in return for favors to Rechnitz and an associate, as well as the Seabrook case.
While defense lawyers are expected to attack Rechnitz — who secretly pleaded guilty to corruption charges as part of his cooperation deal last year — as an unreliable fixer based on his role in those cases, they also say he hasn’t come clean about his involvement in another case: a $70 million ticket-reselling Ponzi scheme involving ex-teacher Jason Nissen.
Nissen was charged in June with lying to investors to back his unsuccessful business brokering high-demand tickets. Rechnitz wasn’t charged, but defense lawyers say wiretaps and emails turned over by the government and information in a civil suit against Nissen reveal that Rechnitz recruited investors for Nissen, lied to them, and made $6 million to $10 million in commissions.
They say he helped “orchestrate” Nissen’s scheme, wasn’t truthful to the government about his role and may have been kept out of the Nissen indictment to maintain his viability as a cooperating witness. The defense has subpoenaed tax returns and other information from Rechnitz, his lawyers and his accountants to buttress their claim.
U.S. District Judge Andrew Carter still hasn’t ruled on a motion to quash them. “This evidence will be critical to show the jury that Rechnitz cannot be trusted even today,” Huberfeld lawyer Henry Mazurek said in a filing last week. Rechnitz’s lawyer did not return a call for comment.
Prosecutors have acknowledged links between Nissen and Rechnitz, but say Rechnitz was not charged along with Nissen because they were not “co-conspirators.” And, while the defense says the entire case rests on Rechnitz, the government has signaled plans to introduce evidence that could corroborate him.
When Seabrook was arrested in June 2016, for example, prosecutors say $28,000 in cash and a Ferragamo bag identical to the one Rechnitz says he used to deliver the bribe were found at Seabrook’s residence.
Also seized: three receipts from Mohegan Sun casino. The defense says the cash was from gambling, but prosecutors say the receipts reflect payments to the casino on a line of credit — including a $7,000 payment in January 2015, barely a month after Seabrook allegedly accepted the bribe.
A jury of seven men and five women was selected on Monday. Opening statements in the case were scheduled to begin on Tuesday.