A Ferragamo bag stuffed with $60,000 in cash now enters the voluminous lore of public corruption in New York City.
The bag came from the Salvatore Ferragamo shop that is said by a federal criminal complaint to be the “favorite luxury goods store in Manhattan” of Norman Seabrook, the longtime head of the city’s Correction Officers' Benevolent Association (COBA).
Seabrook was arrested at his home at 6 am Wednesday for allegedly taking the designer bag full of money as a kickback for routing $20 million in union funds to a teetering hedge fund.
ADVERTISEMENT
“It’s about time Norman Seabrook got paid,” the complaint quotes Seabrook as having said in late 2013 to his go-between with the fund, Platinum Partners, L.P.
The arresting agents had a search warrant and found a Ferragamo bag in Seabrook’s house.
“Along with 10 pairs of Ferragamo shoes,” Manhattan U.S. Attorney Preet Bharara said in announcing the arrest.
Also charged was the shady financier who is said to run the hedge fund in fact if not on paper, Murray Huberfeld. A third man who served as the go-between the two is said to have season tickets to the Knicks, and Huberfeld allegedly sought to account for the $60,000 by staging the bogus purchase of pairs of ducats to eight games.
Bharara observed that the pricing was particularly audacious given the team’s long losing streak in the 2014 season.
“The Knicks record was 4 and 20,” he said.
Seabrook’s arrest is only the latest corruption case that Bharara has brought in New York. Speaker of the Assembly Sheldon Silver and State Senate Majority Leader Dean Skelos were convicted and sentenced to long prison terms earlier this year. Others are all but sure to follow as the result of at least a half dozen other investigations arising from Bharara’s avowed determination to prosecute corruption wherever it is found.
“It is too bad we seem to find it everywhere we look,” he said. “I’m running out of adjectives to describe it.”
In the complaint, the go-between is identified only as CW-1 (Complaining Witness-1), but the Wall Street Journal has identified him as Jona Rechnitz. He is also at the center of two major investigations, one into corruption among a number of high-ranking cops and a second into questionable fundraising and influence peddling at City Hall.
The targets of various probes in which Rechnitz figures could not have been happy to learn that the Seabrook complaint reports, “CW-1 has pleaded guilty to conspiring to commit honest services fraud in connection with, among other things, this matter and is providing information to the Government in the hope of obtaining leniency when he is sentenced.”
In the Seabrook case, Rechnitz allegedly introduced Seabrook to Huberfeld with the thought that union cash might save a hedge fund that was being deserted by smart investors; more money was being taken out than was coming in.
Seabrook ended up putting $20 million of union money into the hedge fund that others were fleeing. The complaint describes a moment on a Rechnitz-paid trip to the Dominican Republic when Seabrook was in his host’s hotel room and complained that he “had worked hard to invest COBA’s money and did not get anything personally from it.”
“Seabrook said that it was time that “’Norman Seabrook got paid,’” the complaint says.
Rechnitz went to Huberfeld, who allegedly agreed to kick back to Seabrook 2 per cent of the profits on the union’s investment.
“How much is Norman Seabrook going to get paid?’” the union leader allegedly inquired.
He was supposedly told to expect between $100,000 and $150,000 a year. The actual amount came to only $60,000, and Rechnitz apparently sought to placate Seabrook by purchasing a bag at the Ferragamo store for $820.
“Tax included,” the complaint notes.
The complaint continues, “CW-1 then placed $60,000 in cash in the Ferragamo bag and met Seabrook several blocks away."
The ploy worked about as well as most of Rechnitz's schemes.
“When CW-1 told Seabrook how much money was in the bag; Seabrook was angry that it was not as much money as he was initially promised,” the compliant continues.
The complaint also reports that Rechnitz took Seabrook on two trips to the Dominican Republic as well as on a trip to Israel.
“My trip to Israel was immensely spiritually rewarding for me,” Seabrook later said in an affidavit.
Seabrook and Rechnitz were accompanied by two other men. One is described in the complaint only as CC-1 (Co-Conspirator-1), but has been widely identified as a Rechnitz business associate, Jeremy Reichberg. The two men figure prominently in the investigation of fundraising by Mayor Bill de Blasio.
“Look, I wish I never met the guy,” de Blasio said of Rechnitz on Wednesday.
The fourth man on the trips is only described as an “NYPD officer.” A source told The Daily Beast Wednesday that is former NYPD Chief of Department Philip Banks, a Seabrook friend who appears to be a target in at least one of the ongoing police corruption probes.
Such fulminating of multiple scandals may be what leaves Bharara at a loss for adjectives. He does not seem to be suffering a shortage of future corruption cases.
“You should expect to see me again,” he said at Wednesday’s 12:30 pm press conference regarding the Seabrook arrest.
Later in the afternoon, Seabrook and Huberfeld were brought in handcuffs into a third-floor courtroom for arraignment. Seabrook wore jeans and a pale lavender dress shirt that was untucked. He had on not Ferragamo shoes, but brown leather sandals.
He had started life in tough circumstances in the Bronx and spent time in a juvenile detention facility. He chose another path before an adult felony record would have precluded him being a correction officer.
“There but for fortune,” he had often said of those who ended up inmates.
For 21 years, he had been president of COBA, whose 9,000 members make it the largest correction officers’ union on earth. He could not have been faulted for being angry, a black man heading an overwhelmingly black union in jails whose inmates were overwhelmingly black. But rather than glower, he glowed, riding about the city in a COBA-owned SUV, well-dressed, self-assured, not averse to the finer things in life.
Seabrook and Seabrook alone decided to put millions into the hedge fund, which he declined even to name to others in the union. The recording secretary, William Valentin, objected when he learned of a $5 million investment and no doubt would have become all the more vocal if he had known the total was $20 million.
Seabrook reacted as an autocrat might to such a challenge to his authority. Valentin filed a law suit charging that Seabrook had unfairly forced him from his position. Seabrook allowed in an affidavit, “I concede saying to Valentine at the January 5, 2015 meetings, ‘You’re out.’ I did not mean by this statement that I was removing him from his corresponding secretary positron, only that he was not to come to the office.”
Seabrook charged that Valentin had demonstrated “poor judgment and dishonest conduct.” Valentin was understandably cheered on Wednesday, when he learned of Seabrook’s arrest.
But there were numerous other union members who filled the courtroom at the arraignment in a show of support. Seabrook’s attorney, Paul Shechtman, told reporters, "Norman Seabrook has spent his entire life fighting. He's not going to walk away from a fight.”
“This is a one-witness case,” Shechtman went on. “We all know who he is… This witness has a lot of baggage."
A fair reading of the complaint suggests that the stuff about Norman Seabrook needing to “get paid” may be based only on Rechnitz’s account. The complaint does note that the time and place of such moments as the pay-off is corroborated by license plate readers and cell phone records.
A reporter asked Shechtman about the Ferragamo bag found in his client’s home. Shechtman recounted an old law-school scenario where a woman walks into a precinct and says she had just been raped by Paul Newman under a palm tree. She then takes a cop out into the street and points to a palm tree and says, “There.”
“But there's no Paul Newman,” Shechtman said.
Newman in this case being the $60,000. The complaint seeks to corroborate the payment with the alleged attempt to cover it up with the Knicks tickets, which is documented with emails and a voucher.
"The only corroboration seems to be no one would pay $60,000 for Knicks tickets," Shechtman said.
The prosecutors at the arraignment declared that the government had a very strong case and asked for significant bail. Judge Kevin Fox ordered Seabrook released on his own recognizance, with no bail at all. Fox told Seabrook that he must appear in court whenever required or suffer the consequences.
“Yes, judge, thank you, sir,” Seabrook said.
“You’re welcome,” the judge said.
The second hearing ended with Seabrook being required to post a $250,000 bond. His co-defendant, Huberfeld, had to post $1 million, which seems about right for a guy who is said to have once gotten his own sister unwittingly involved in hustling death benefits meant for hospice patients.
A woman had brought Seabrook clothing and shoes closer to his usual sharp style in case he wanted to change, but he chose to remain in the jeans and untucked shirt of the 6 am arrest when he remerged from the courthouse.
“I feel like a million dollars,” he actually said with an actual smile.
In the 1930’s, New York City Sheriff Thomas Farley became forever known as Tin Box Farley after he told a graft inquiry that his bank account far exceeded his income because he had a tin box from which money appeared whenever he opened it.
“Oh, it’s a wonderful box,” a smiling Tin Box Farley said.
We now have Ferragamo Seabrook.
