Police-Corruption Trial Focuses on Lifestyles of the Rich and Reckless (Free Article)

Susan Necheles, the lead attorney for Jeremy Reichberg in the police-corruption trial in which former NYPD Deputy Inspector James Grant is his co-defendant, was about two hours into her cross-examination of Jona Rechnitz, her client’s former business partner, when she asked about his paying for a post-wedding dinner for 120 guests of Mr. Reichberg following his daughter’s marriage.

It took place on Jan. 16, 2016, part of a seven-day celebration practiced by some Orthodox Jews, and Mr. Rechnitz—who is cooperating with Federal prosecutors in the hope of avoiding any prison time after pleading guilty to crimes that could put him behind bars for 20 years—said the cost to him was “about $40,000.”

Wasn’t About Being Nice

Ms. Necheles, who had spent the entire morning establishing Mr. Rechnitz’s penchant for throwing around money to convince both friends and business associates he was wealthier than he was, said, “You did this because you wanted to do something nice” for Mr. Reichberg, who he previously testified had given him entrée to the upper levels of the Police Department.

“That’s false,” responded Mr. Rechnitz, mindful that a recommendation for leniency by the U.S. Attorney’s Office in Manhattan was contingent upon him providing meaningful information and testifying truthfully even if it made him look bad. “I had a different motive.”

He told the jurors and a gallery packed with Orthodox Jewish supporters of Mr. Reichberg and a smaller number of men friendly with Mr. Grant that he had heard rumors that his longtime business partner had been in Israel and that he was cooperating with Federal investigators who had been questioning him as well about their dealings with top police commanders.

Using language borrowed from “The Godfather,” Mr. Rechnitz continued, “I wanted to keep him close. I didn’t want him to feel we were at odds at this point…that we were good, and there was no friction between us.”

Buying Time for Sell-Out

When he finished that response, U.S. District Judge Gregory Woods declared a recess and sent the jurors to lunch. Ms. Necheles agreed to the break, still early in what was expected to be up to three days of cross-examination by her and Mr. Grant’s lead attorney, John Meringolo, because she had already established a key point in that dramatic exchange: that Mr. Rechnitz, who less than five months later would become a cooperating witness against his business partner, was capable of using even a seeming act of generosity to advance a betrayal.

Mr. Rechnitz, who is 36, is the son of a prominent Los Angeles real-estate developer with political connections that include close ties to Israeli Prime Minister Benjamin Netanyahu. He stayed in New York after graduating from Yeshiva University, explaining during an earlier corruption trial, involving former Correction Officers Benevolent Association President Norman Seabrook last fall, that he wanted to make his mark here, independent of his father, although he continued to accept financial support from the elder Rechnitz.

That initial Seabrook case ended with a hung jury, and some jurors stated afterward that they deadlocked because it was even harder to believe Mr. Rechnitz than it was to like him. It wasn’t just the variety of schemes he admitted to as part of Federal prosecutors’ attempts to get his crimes out in the open before defense lawyers could put them in the worst possible light; defense lawyers drove home on cross-examination that he could be casually bigoted and capable of swindling persons he addressed as close friends, as well as his father-in-law. He had grown up comfortably in Beverly Hills yet came off as shockingly ignorant: though he told Ms. Necheles under cross-examination that Yeshiva University was one of the top 40 colleges in the nation, during his testimony against Mr. Seabrook he said he had read “only one or two books” in his life.

Offered Negative Value

Prosecutors in the first Seabrook case quickly grasped the extent to which he had undermined not only his own testimony but that of more-credible witnesses—board members at COBA who described Mr. Seabrook’s evasiveness about his plans to invest $20 million of union monies in a hedge fund that subsequently filed for bankruptcy, allegedly in return for a $60,000 bribe that Mr. Rechnitz said he had personally delivered. He was more low-key during the second Seabrook trial, which ended in a conviction in August, less-eager to contest minor points with defense attorneys who were a lot smarter than he proved to be.

But in testifying for the prosecution against Mr. Reichberg and Mr. Grant, he wasn’t necessarily going to inoculate himself against jurors’ scorn by admitting he had been arrogant after he was observed on a self-made video joking, as he and his business partner entered a Police Headquarters garage where they would park their car in a spot reserved for then-Chief of Department Philip Banks III, that the cops they were passing should treat them well if they wanted to keep their jobs.

It wasn’t clear whether the way he carried himself prompted Mr. Grant’s lawyer to start cross-examination early, outside the courtroom, on the morning of Nov. 27, when Mr. Rechnitz crossed his path. Mr. Meringolo, who was sitting with his father and several supporters of his client, allegedly snarled at the witness, “You’re a disgrace!”

Angry Words and a Shove

When prosecutors were informed of the alleged remark, which they perceived as an attempt to intimidate the key witness in the case, Assistant U.S. Attorney Martin Bell came out of the courtroom and angrily confronted Mr. Meringolo, who allegedly escalated the hostilities by shoving him.

Back in the courtroom, Mr. Bell told Judge Woods that both Mr. Rechnitz’s lawyer, Alan Levine, and an FBI agent escorting the witness to and from the courtroom had heard Mr. Meringolo’s remark, although supporters of Mr. Grant claimed no threat had been made, according to the New York Post.

Mr. Woods, a soft-spoken jurist who earlier in the trial upbraided the defense lawyer for what he called “ejaculations of outrage,” sent the jurors home for the day without telling them what had occurred. He then spent hours discussing the incident, opting to go forward the next day after prosecutors said they did not intend to bring charges against Mr. Meringolo, the defense lawyers said they would not cross-examine Mr. Rechnitz about any threats that might have been made against him, and Mr. Grant told the Judge he felt comfortable continuing to be represented by his lawyer.

U.S. Attorney Geoffrey S. Berman briefly dropped in to observe the discussion from a bench at the back of the 26th-floor courtroom.

When testimony resumed the following day, Mr. Rechnitz continued reciting the scams in which he had been involved, including two Ponzi schemes in which he had just a peripheral role. Complications from those schemes, involving a wholesale liquor business and the resale of sports tickets at steeply marked-up prices, prevented him from filing tax returns for 2015 through 2017, and by the time they were sorted out, “I’m going to have to pay a lot of extra money and penalties,” Mr. Rechnitz said.

Aide Took Exam for Him

He also acknowledged that, despite a background that would have seemed to leave him prepared to ace the test, he hadn’t taken the exam needed to obtain his real-estate license, having his assistant do it for him. He offered a more-straightforward account than he had in the first Seabrook trial of how he misplaced a $60,000 watch in his home, filed a claim with his insurance company and received a $15,000 payment, then found the watch but didn’t notify the insurer.

Given how both he and Federal prosecutors had been embarrassed by the meal that Mr. Seabrook’s attorney, Paul Shechtman, had made of that escapade last November, it was shocking when Mr. Bell asked Mr. Rechnitz when he finally reimbursed the insurer for the $15,000 payout and the witness replied, “In the last few weeks.”

Audience members laughed at the remark, since that payment would have come more than two years after he signed a cooperation agreement with the government that could have been voided by further dishonest conduct. Later, when the jury was out of the courtroom, Judge Woods instructed audience members to maintain decorum, saying a similar outburst could lead to their being ejected. But given the history of that incident in the Seabrook trial, even more-objective observers than Mr. Reichberg’s supporters found it amusing that Mr. Rechnitz had waited so long to settle the account.

Prosecutors played an audiotape of a phone conversation Mr. Rechnitz had with Mr. Reichberg in March 2015 after being questioned by NYPD Internal Affairs Bureau investigators.

“We were sharing information,” Mr. Rechnitz testified. “We were trying to figure out what was going on.”

‘Had a Lot to Hide’

By that time, it was established during the first Seabrook trial, Federal prosecutors were secretly wiretapping Mr. Rechnitz’s phone. His concern about possible investigations into their activities was evident last week when Mr. Bell played an audiotape of a subsequent call in which Mr. Rechnitz cautioned Mr. Reichberg about a pending interview he had with NYPD investigators.

He was heard saying, “Be modest. Don’t start shvitzing who you know and all that.”

Mr. Bell asked why Mr. Rechnitz was concerned at that time.

The witness replied, “Because we had a lot to hide. We were bribing cops.”

Following a break, Ms. Necheles began her cross-examination, establishing that Mr. Rechnitz over the previous two months had met with prosecutors roughly 15 times in preparation for his testimony.

He said he had opted to consider cooperating after learning that prosecutors “intended to make a deal with one of us,” referring to himself and Mr. Reichberg.

Pointless Quibbling

Reverting to his past tendency to quarrel with defense lawyers over minor points, he responded to Ms. Necheles saying he met with prosecutors in the spring of 2016 four or five times before entering into his cooperation agreement by saying he recalled it being three; she then cited four specific dates in May when they conferred.

He took issue with her saying that he was informed that to get a cooperation agreement, prosecutors told him, “You have to be valuable to us,” saying, “I remember them just telling me, ‘You have to be truthful.’” A few seconds later, he added, “and give substantial assistance” to their cases against others with whom he did business. Then, looking to have the last word, he said, “I believe all of my testimony is valuable, as long as it’s truthful and accurate.”

Exploring the rarefied world into which he gained access because of his father, at one point five years ago speaking at a luncheon in which he thanked U.S. Senators for securing funding for the Iron Dome defense system in Israel, Ms. Necheles said to him, “You wanted to be a macher, right? You very conspicuously spent lots and lots of money.”

“That’s right,” Mr. Rechnitz replied.

Inclined to Exaggerate

After Judge Woods dismissed the jurors last Wednesday afternoon, Ms. Necheles told him that in her cross-examination she planned to present extensive evidence about the way that the witness exaggerated his own wealth to impress those whose connections he hoped to use.

“This guy was pretending to be a billionaire,” she said, noting that he had told Mr. Seabrook that he owned two major buildings in the Wall Street area, when in fact he was merely “working for the company that had owned these buildings” and subsequently sold them.

When testimony resumed the following morning, she elicited his admission that five years ago he rented a yacht on the condition that all personal effects be removed, including pictures, so he could gull Mr. Seabrook and Mr. Banks into believing that he was its owner.

“It was all for the purpose of making the inner circle think you were extremely wealthy,” Ms. Necheles said.

She pointed to his having planted stories in publications including TMZ about successful bets he made on the Super Bowl, including three different ones in which he won $50,000 by betting $1,000 that the first score of each game would be a safety. Yet, she noted, he told TMZ that he made just one bet each year, when in fact he wired hundreds of thousands of dollars to the MGM Grand casino/hotel in Las Vegas for use on his gambling junkets with friends and business associates.

‘Didn’t Want That Image’

His lying about the extent of his betting activity, Mr. Rechnitz responded, was not to exaggerate his successes but because in the larger community in which he lived, “Gambling is frowned upon. I didn’t want the image of a gambler.”

Ms. Necheles said he was trying to “create an aura of being an incredibly rich and successful person.” She noted that when he rented a private jet that seated eight passengers, it cost him nothing extra to bring along people he was trying to impress, whether it was Mr. Reichberg, or other business associates or friends who were not cops.

She cited a $6,000 restaurant tab in May 2015, at “a time when you were no longer hanging out with police officers, was that correct?” When Mr. Rechnitz said he did not remember who had been there, Ms. Necheles described them as “people you were trying to impress.”

He acknowledged, “Treating people was very important to me, to give the impression that I’m strong and powerful.”

She asked him about two courtside seats for a Brooklyn Nets game that he had delivered to Mr. Banks through an aide on Dec. 27, 2013 which had a face value of $3,000 each. “I believe I paid less,” Mr. Rechnitz said.

Buying Awesome

She pressed him about buying a suite for $21,500 for a concert given by Beyonce, and the photos he sent via Instagram from the event. “You wanted people to know you had this awesome suite for an awesome concert,” she said.

Regarding a picture of him at a fundraising dinner for Chabad, a prominent Hasidic group, along with Mr. Reichberg, Mr. Seabrook and Mr. Banks, Ms. Necheles implied it was another case of him trying to impress people who could help him get ahead, saying, “You weren’t trying to hide that you were hanging out with Mr. Banks and Mr. Seabrook, right? Never tried to make this a secret thing that you were taking them out to all these places?”

“I never did, no,” Mr. Rechnitz replied.

The Jurors were sent to lunch after Ms. Necheles got him to admit that he spent $40,000 on a dinner marking the wedding of Mr. Reichberg’s daughter to lull his business partner into thinking they were still close even as he moved toward providing evidence against him to avoid a potential prison sentence.

Assistant U.S. Attorney Jessica Lonergan asked that Judge Woods instruct the jury about many of the benefits Mr. Rechnitz conferred on his traveling companions being “comped” items for which he wasn’t charged.

‘Had Value to Recipient’

“That’s something that still has value to the recipient,” she said, anticipating a defense case in which the lawyers for both Mr. Reichberg and Mr. Grant would maintain that Mr. Rechnitz was too involved in puffing up his image for there have been intent to bribe cops in return for special treatment.

Ms. Necheles responded, “I’m not arguing that a rich person can’t give somebody a bribe.”

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