One of the central figures in a bribery scandal that rocked New York's Orthodox Jewish community has pleaded guilty to defrauding his own hedge fund.
Long Island-based Murray Huberfeld pleaded guilty to one count of wire fraud on Friday for his role in defrauding his Platinum Partners of the $60,000 that he funneled to disgraced fixer Jona Rechnitz to pass to former New York City prison union boss Norman Seabrook.
While the money was officially classified as payment for New York Knicks tickets that Huberfeld has supposedly gotten from Rechnitz, Huberfeld admitted that it was intended to bribe Seabrook in order to ensure that he would invest the prison union's $20 million pension fund into Platinum Partners. "I knew the Knicks ticket invoice was fake,” Huberfeld told Judge Alvin Hellerstein.
The disgraced money manager now faces a maximum of five years in prison, but Hellerstein criticized the deal as insufficiently severe, noting that Huberfeld did not come clean about his role in systematically defrauding the Correction Officers Benevolent Association (COBA). Had Huberfeld been convicted in the corruption scheme, he would have faced as much as 60 years in jail.
"Part of my job is to assure myself that the plea is to a crime, and I’m having some difficulty,” Hellerstein said, according to the New York Post. “It’s hard to think that Platinum Partners was the victim. Isn't Platinum Partners entire management under indictment?"
According to authorities, Huberfeld's $60,000 was given to Seabrook in a Ferragamo suitcase, who in turn convinced COBA to invest its $20 million pension fund with Huberfeld. The investment was almost entirely lost, and the resulting probe shone a light on Huberfeld's unsavory business practices, including allegations that he used his hedge fund as a Ponzi scheme.
An attempt to convict Seabrook and Huberfeld for fraud and conspiracy resulted in a mistrial in November. Seabrook faces a retrial in July.
According to Huberfeld's lawyer, "Murray Huberfeld is ready to put this chapter behind him and return to his family. The government offered him a plea agreement that enables him to do this."