Feds: NY hedge founder indicted in USD 1 billion fraud case

A founding partner of a hedge fund at the center of a scandal involving the head of the nation's largest jail guard union was charged today in a USD 1 billion fraud case.
Mark Nordlicht, chief investment officer of Platinum Partners, was to appear in federal court in Brooklyn to face securities fraud conspiracy and other charges.
Six other people, including other hedge fund executives, were named in an indictment that alleges a scheme beginning in 2012.
Former Correction Officers' Benevolent Association President Norman Seabrook pleaded not guilty last year to charges he steered USD 20 million in union pension money to Platinum Partners in 2014 in exchange for a USD 60,000 bribe -- delivered in a black Ferragamo bag -- and luxury trips.

The case stemmed from overlapping federal probes that resulted in several police officers being charged or disciplined and scrutinized the fundraising of New York City Mayor Bill de Blasio.
Court papers in the Platinum Partners case accuse the defendants of lying to investors about the value of funds they were managing.

The evidence includes emails between Nordlicht and others that "illustrated their knowledge and awareness of the fraudulent scheme perpetrated on Platinum's investors and prospective investors," the papers say.
There was no immediate response to a message seeking comment from Nordlicht's attorney. Platinum representatives did not immediately respond to a comment request.

As the New York City-based hedge fund began to go under in December 2015, Nordlicht wrote that he was thinking about using USD 7.5 million from a second mortgage on his home to try to keep it afloat, the papers say. He also was considering fleeing the country, they say.
"Am on my way to JFK with the kids for their 6 p.M. Flight to Israel," he wrote in one email, according to the indictment.
"My wife is literally making me get on Israel flight if we don't connect and agree what we are doing."
One of his cohorts responded: "You should get on the flight if there is no bridge (loan), probably even if there is.