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Hedge-fund founder from Long Island pleads guilty to fraud

Murray Huberfeld, a principal in Platinum Partners, faces up to 5 years in prison.

Murray Huberfeld, exits a federal courthouse in lower

Murray Huberfeld, exits a federal courthouse in lower Manhattan after a mistrial was declared in his bribery trial, Thursday, Nov. 16, 2017. Murray was a co-defendant with former former jail-union boss Norman Seabrook. Photo Credit: Charles Eckert

A hedge-fund founder from Long Island accused of bribing former New York City jail union boss Norman Seabrook to invest pension money pleaded guilty to a wire fraud conspiracy Friday, but did not plead to the alleged bribery scheme.

Murray Huberfeld, a principal in Platinum Partners hedge fund, faces up to 5 years in prison after admitting he misled the fund by falsely claiming that a $60,000 payment to fixer Jona Rechnitz that prosecutors say was a bribe for Seabrook was instead payment for a block of Knicks tickets.

“I knew the Knicks ticket invoice was fake,” Huberfeld told Manhattan U.S. District Judge Alvin Hellerstein.

Seabrook and Huberfeld were tried this year on charges that Rechnitz, a government witness and a pivotal figure in several federal corruption probes, was the conduit for a $60,000 bribe that secured a $20 million investment in Platinum by the Correction Officers Benevolent Association.

Rechnitz testified that he later passed the $60,000 to Seabrook in a Ferragamo bag in 2014. The trial ended with a hung jury, and the case is scheduled for a retrial — now, of Seabrook alone — in July. Huberfeld, 57, of Lawrence, has not agreed to cooperate or be a government witness.

Huberfeld didn’t comment afterward, but his lawyer Henry Mazurek said in a statement that his client wanted to “put this chapter behind him” with a plea to defrauding his own company. “He regrets ever letting Jona Rechnitz in his life,” Mazurek said.

As part of the plea deal, prosecutors and the defense agreed that federal guidelines recommend a prison sentence of 6 to 12 months. Hellerstein accepted the plea, but warned he might take into account the larger alleged bribery scheme to get $20 million for the fund and go above that range.

“I can find a greater loss, leading to a more severe sentence,” he told Huberfeld. “This is not binding on me.”

Seabrook, at trial, contended that the $60,000 payment to Rechnitz was a finder’s fee for recruiting the union as an investor, not a bribe that was later passed along. Huberfeld, in his statement to Hellerstein, was ambiguous about whether it was a bribe.

“The money was requested by Rechnitz as payment for Norman Seabrook’s efforts to get COBA to invest in Platinum Partners,” he said.

The new indictment to which Huberfeld pleaded guilty said the payment was to “reimburse Rechnitz for having paid Norman Seabrook . . . for Seabrook’s efforts to get COBA to invest millions of dollars in Platinum.”

Paul Shechtman, Seabrook’s lawyer, viewed the absence of a bribery charge as a positive sign. “I respect Mr. Huberfeld for admitting to what he did do, and just as importantly for not admitting to what he didn’t do,” the lawyer said.

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