By Matthew Russell Lee, Patreon Thread Letter
SDNY COURTHOUSE, Oct 17 – When government cooperator Jona Rechnitz came up for sentencing for defrauding among others the NYC Correction Officers' annuity fund on December 19, 2019 before U.S. District Court for the Southern District of New York Judge Alvin K. Hellerstein, Assistant US Attorney Martin Bell urged leniency.
Bell said that so that Rechnitz can continue to pay restitution, he should remain free in order to keep selling jewelry to the Kardashians.
In February 2020 Rechnitz was sued in California for fraud. Inner City Press published the complaint on Scribd here, and for download on Patreon here.
On July 26, 2023, after appeal the Second Circuit ruled that the case should be reassigned, as "the judge's relationship with [Andrew] Kaplan was sufficiently close... that a reasonable person would have questioned the district court's impartiality."
Thereupon, Rechnitz' counsel wrote it suggesting his case be reassigned to Judge Carter, or Judge Wood or Liman. It was reassigned to Judge Katherine Polk Failla.
On August 30, the US Attorney's Office and COBA said the $12 million should be ordered. Rechnitz through counsel said restitution should only be "$891,00 ($1,206,00 minus $315,000 that Mr. Rechnitz has already paid the victim."
On September 16, COBA's Reply memo chided Rechnitz for claiming ignorance and even impoverishment; "having skin in a rigged game does not imply good faith."
On October 9, Inner City Press live tweeted the oral arguments, here.
And on October 16, from the thread of the decision, this
Judge Failla: The losses to COBA are devastating. Mr. Rechnitz was a but-for cause of those losses- but the law requires more than that, that he be the proximate cause. I conclude the US has not so proven; Mr. Rechnitz will not be changed with the larger figure
Judge Failla: I want to be clear, I am not finding that the US investigation of Platinum or disclosure of Rechnitz' plea led to the losses.
Judge Failla: Mr. Rechnitz was not told about the fraud at Platinum during the relevant time period, and he had no reason to know about it. Mr. Rechnitz' view were more conservative that those of Mr. [Norman] Seabrook.
Summary: The Court finds that the Government has not proven by a preponderance of the evidence that Defendant is the proximate cause of the approximately $11.7M in remaining losses for which COBA seeks restitution, or that the risk of loss from separate frauds was reasonably foreseeable to Defendant. The Court orders restitution in the amount of $891,000.00.
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