This content is from: Culture

Founder of Hedge Fund Firm Platinum Partners Pleads Guilty to Fraud

The hedge fund firm paid $60,000 as part of a bribery scheme, but said the money was for basketball tickets.

Platinum Partners founder Murray Huberfeld has pleaded guilty to charges that he fraudulently made a payment as part of a bribery scheme to attract money to the hedge fund. 

Huberfeld caused Platinum to pay $60,000 to a company owned by his acquaintance Jona Rechnitz, falsely representing the money as payment for courtside tickets to eight New York Knicks basketball games, according to a statement Friday from the U.S. Attorney’s Office for the Southern District of New York. The money was in fact reimbursement for a bribery scheme tied to an investor in Platinum, the Correction Officer’s Benevolent Association.

In late 2013, Huberfeld and Rechnitz, a real estate businessman, sought to attract public and institutional investors to Platinum’s fund. Rechnitz told Huberfeld that his contact, Norman Seabrook, then president of COBA, would likely invest with Platinum. Seabrook directed the union to contribute $20 million over the next few months, including $15 million of correction officers’ retirement benefits that were financed by New York City, according to the statement.

Seabrook was later personally paid for the millions of dollars the union had invested over the course of 2014, the U.S. Attorney’s Office said, with Rechnitz allegedly delivering $60,000 to Seabrook in a men’s luxury handbag.

“Murray Huberfeld caused his former hedge fund to pay tens of thousands of dollars to a criminal partner in order to enable another crime – paying off the head of the correction officer’s union for the investment of millions of its members’ fund,” Manhattan U.S. Attorney Geoffrey S. Berman said in the statement. “We will continue to work with our law enforcement partners to fight fraud and corruption.”

[II Deep Dive: Seabrook Faces Retrial in Hedge Fund Bribery Case]

Huberfeld, who pled guilty to one count of conspiracy to commit wire fraud, is scheduled to be sentenced to prison on September 14. The charge carries a maximum prison term of five years.

The trial against Seabrook is set to begin July 30, and like Huberfeld, will be before U.S. District Judge Alvin Hellerstein. “Seabrook is presumed innocent unless and until proven guilty,” the U.S. Attorney’s Office said.

Related Content