The Real Deal New York

Rechnitz hit with subpoenas for personal, biz records in federal corruption trial

Attorneys for JSR Capital chief say defendants are trying to discredit him as witness
By Rich Bockmann | October 16, 2017 02:43PM

Jona Rechnitz

Jona Rechnitz, the federal government’s star witness in its prosecution of the former Correction Officer’s Benevolent Association union boss, was hit with subpoenas for personal and business records that his attorneys say are meant to discredit him when he takes the stand next week.

Attorneys for former hedge funder Murray Huberfeld, charged with paying a $60,000 kickback to union boss Norman Seabrook, served subpoenas last week on Rechnitz and his firm, JSR Capital, as well as his accountant and the law firm that handles his business deals, court records show.

The subpoenas seek, among other things, Rechnitz’s personal federal tax returns and those for his company from 2012 through 2016, contracts and loan agreements tied to questionable business deals and communications with the government regarding his cooperation with prosecutors.

Rechnitz’s attorneys, however, are trying to quash the requests, arguing they’re nothing but a fishing expedition seeking inadmissible hearsay.

“[T]heir only purpose is to fish for material to possibly impeach Mr. Rechnitz’s credibility,” wrote attorney Alan Levine at the law firm Cooley, which is representing the real estate investor as a cooperating witness. Levine declined to comment further.

Huberfeld’s attorney, Henry Mazurek said he thinks the requested materials are an essential part of his client’s defense.

“We filed them on a good-faith basis and believe it’s important to be able to cross examine Jona Rechnitz,” he said. “We believe they contain relevant and material evidence that will undermine his credibility.”

Huberfeld is rumored to have met Seabrook through Rechnitz, a major political donor to Mayor Bill de Blasio’s 2013 election who agreed to cooperate with federal prosecutors after pleading guilty last year to bribing unnamed public officials.

De Blasio had once been under investigation for questionable campaign contributions, but federal prosecutors ultimately dropped the case.

Huberfeld’s attorneys have spent some time highlighting Rechnitz’s business dealings, pushing for more information on his connection to alleged Ponzi schemer Jason Nissen.

Rechnitz, a small-time investor who wielded outsized influence with people in power, skipped town earlier this summer for his native California as intensity from the trial ramped up.

In July, his partners on a mixed-use Borough Park property that fell into foreclosure under his watch booted him as the general partner, as The Real Deal reported at the time.

Opening statements in the trial are expected to being on Oct. 24.