Federal agents arrested a major Orthodox philanthropist on fraud charges Wednesday morning in connection with a sprawling corruption investigation now shaking political circles and the Orthodox community in New York City.
A former New York hedge fund manager has been charged along with a prominent union official in a case involving alleged kickbacks and a pension fund, according to reports.
Murray Huberfeld faces charges for events that allegedly took place while he was affiliated with Platinum Partners, a $1.3 billion firm known for risky investment strategies that often paid off handsomely.
Federal officials charged Huberfeld and Norman Seabrook, president of the New York’s Correction Officers’ Benevolent Association, in the case. They allege that Seabrook took kickbacks from Huberfeld’s Platinum Partners in exchange for directing some $20 million in wire transfers from the union’s pension fund to the firm.
Both were charged with honest services wire fraud, according to the New York Daily News, which cited sources and court papers.
The union is the largest municipal jail union in the United States, according to the News.
According to The New York Times , that cooperating witness is Jona Rechnitz, one of the two Orthodox businessmen at the center of a sprawling investigation into corrupt favors allegedly accepted by high-ranking members of the New York City Police Department.
The Times reported that Rechnitz has pleaded guilty to fraud charges and is cooperating with investigators.
The arrests of Huberfeld and Seabrook come amid months of uncertainty and strained relations between city officials and Orthodox leaders stemming from the NYPD investigation, in which a number of top police officials have already been disciplined and reassigned.
Huberfeld is a major donor to Chabad-Lubavitch synagogues and to yeshivas in Brooklyn’s Boro Park, and is a member of the board of the Simon Wiesenthal Center.
Huberfeld no longer helps run Platinum, according to a Reuters profile of the firm in April that detailed the firm’s risky strategies.
Neither Huberfeld, Seabrook nor representatives at Platinum Partners responded to requests for comment.