‘A GOOD DEAL FOR COs’: Correction Officers’ Benevolent Association President Elias Husamudeen said he shared the belief of colleagues in the uniformed-union coalition that getting slightly better raises for their members over 36 months than the city’s largest civilian-employee unions obtained over 43 and 44 months was a strong selling point to his rank and file. ‘Thirty-six months with no zeroes as opposed to 43 months with seven months of zero is what I consider a good deal for my members,’ he explained.

Four current and former members of the Correction Officers Benevolent Association are again suing the union’s board of directors and its president, Elias Husamudeen, alleging that they failed to properly vet investment schemes by former COBA President Norman Seabrook that drained tens of millions of dollars from the union’s annuity and general funds.

The suit is further fallout from Mr. Seabrook’s attempt to secure an ill-gotten payday while union president by investing in a high-risk hedge fund that eventually went belly up. The 21-year union leader was indicted in June 2016 on fraud charges and sentenced to five years of prison in February for accepting a $60,000 payoff in return for the $20 million investment.


‘Frivolous Claims’

The board members “were aware, or should have been aware, that their lack of loyalty, good faith, due care, oversight, and candor posed a risk of serious injury to COBA and its members,” the complaint noted.

The COBA board failed in its fiduciary responsibility by not properly vetting the investments and was therefore liable for Mr. Seabrook’s “misconduct,” a lawyer for the plaintiffs, Philip Seelig, himself a former COBA president, said in an interview.

The union, though, is arguing that this filing is similar to one initiated by the plaintiffs in November 2016. That action, filed in U.S. District Court in Manhattan,  was dismissed about a year later. A U.S. Court of Appeals Judge upheld the dismissal in January.

In a statement, COBA’s president, Elias Husamudeen, said Mr. Seelig was using the lawsuit to revisit past political battles rather than advocating for union members.  

“One would think that after a Federal Appeals Court rejected the frivolous claims made in this identical suit, past COBA President Phil Seelig, who got his law degree while president, would have learned how to file a suit with merit if he wants to be COBA’s next attorney,” Mr. Husamudeen said.  

Largely Bypassed Board

Mr. Seelig, though, said the lawsuit, filed in Queens Supreme Court July 25, differs significantly from the previous claim in that it demands COBA investigate how Mr. Seabrook was able to funnel tens of millions of dollars, largely by bypassing the union’s board, into an investment vehicle now widely considered to have been a Ponzi scheme.

That demand was not included in the previous suit, he said, since that would have been akin to asking the COBA board to sue itself. “We thought it would be futile to do so,” he said.  

“They have to answer on the merits not on the procedural step that they won in the past,” Mr. Seelig said. This is far from over.”

COBA’s board, he contended, “violated their sacred trust.”

“The board turned a blind eye,” Mr. Seelig said. “Rather than do their due diligence...they ignored that because they were coopted by the various goodies the union was showering on them,” including, he said, expensive meals, tickets to sporting events, vacations and the like, paid for with union monies.

In addition to board members, the suit names Koehler & Isaacs, the law firm that represents the union, and Mr. Seabrook. It seeks unspecified damages, but Mr. Seelig noted that the $20 million Mr. Seabrook invested—much of which has not been recouped—could have netted roughly a 30 percent return by now, given the stock market’s bull run.

Past Battles

Mr. Seelig’s nearly 14-year tenure as head of the union lasted until 1992, when he segued into law.

He was succeeded by a union ally, Stanley Israel, whose single term as COBA president was marked by disputes with Mr. Seabrook, who claimed Mr. Israel was shutting down debate and rebuffing attempts to provide information about union activities. Mr. Seabrook was elected COBA president in 1995.

If acrimony between those two slates crested decades ago, the rancor still runs high.

“Phil Seelig and the truth have never been in the same room. Six months ago, we successfully clawed back $7 million from one of the individuals who defrauded this union and we continue to fight for the remaining money,” Mr. Husamudeen’s statement said. “While we’re fighting to get the members' money back, Phil Seelig, after 40 years, doesn't seem to be able to make the crossover to retirement, and is costing our active members thousands of dollars in outside legal fees fighting his frivolous lawsuit. Our members see right through this. We will not be distracted by this or any other attempt to hurt this union.”

Mr. Seelig deflected that criticism, saying “the thousands of dollars (in COBA legal fees) pale in comparison to the $19 million that the executive board lost because of their breach of fiduciary duties.”

Lack of Review

Mr. Seabrook was indicted on fraud charges, including under Federal racketeering statutes, for placing $20 million in union funds with the hedge fund, Platinum Partners, in exchange for the $60,000 bribe.

The “investments” were made in three instalments beginning in early 2014, according to the suit. The first, of $10 million from the union’s annuity fund, was approved by those defendants who belonged to the union’s Annuity Fund Sub-Group. The suit contends, though, that the group “did not review any due diligence on the PPVA investment prior to authorizing that investment.”

A subsequent $5 million outlay into the fund in June 2014 was made by Mr. Seabrook from the COBA operating fund without board approval. A third installment, of another $5 million, in August 2014 also was approved by the Annuity Fund Sub-Group.

In addition to his prison term, Mr. Seabrook was ordered to pay $19 million in restitution.

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