The fund manager arranged to make payments to Seabrook using the witness as an intermediary, Bharara said. Seabrook was to be paid a portion of the profits from the union’s investment, which Huberfeld estimated would be between $100,000 and $150,000 a year, the government said.
The pension invested a total of $20 million in 2014, the largest investment in Platinum Partners’s Value Arbitrage Fund during that period, Bharara said. Seabrook’s union money came at a time when other Platinum investors were withdrawing funds, as much as $44 million by December 2014, according to to the U.S.
By the time the government subpoenaed Platinum and the union in May 2015, there were no more investments, prosecutors said.
Seabrook and Huberfeld, who were released on bond Wednesday by a federal magistrate in Manhattan, face as long as 20 years in prison if convicted of conspiracy or a second count of honest-services fraud, prosecutors said.
Huberfeld’s role at Platinum Partners wasn’t publicly disclosed in part because of his background, Bharara said Wednesday.
In 1992, the fund manager and his former business partner pleaded guilty to misdemeanors for sending others to take brokerage-licensing tests for them, according to court records. In 1998, they were in trouble again for illegally selling restricted stock and were ordered to pay $4.7 million by the U.S. Securities and Exchange Commission, according to the SEC.
The case is U.S. v. Seabrook, 16-mag-3626, U.S. District Court, Southern District of New York (Manhattan).