COBA Insisted Jona Rechnitz Owes It $12M For Feb 24 It Urges Fraudster Imprisonment

COBA Insisted Jona Rechnitz Owes It $12M For Feb 24 It Urges Fraudster Imprisonment By Matthew Russell Lee, Patreon Thread Letter SDNY COURTHOUSE, Feb 20 – 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. On January 24, 2025 Rechnitz's lawyer wrote in seeking to push the February 12 sentencing all the way to June, citing COBA's challenge on restitution in the Second Circuit - but COBA opposes sentencing delay. The US Attorney's Office, Rechnitz says, consents to this delay. And so on January 27 it was granted: "Due to the scheduling conflicts, and moreover, the pending petition for a writ of mandamus, the Court GRANTS Defendant's request for an adjournment of his upcoming sentencing. The Court hereby ADJOURNS Defendant's sentencing, currently scheduled for February 12, 2025, to June 11, 2025, at 3:00 p.m. The deadline for the parties to submit supplemental sentencing submissions is correspondingly ADJOURNED to May 28, 2025; any responsive submissions shall be filed on or before June 4, 2025." But it was delayed again: after sealed documents placed in vault on February 10 and then May 9, on May 19 Judge Failla pushed sentencing back to August 12." Then on July 22, again: " ADJOURNED to November 12, 2025." Then on October 20, "ORDER as to Jona Rechnitz: The sentencing ADJOURNED to January 21, 2026." On January 6, more delay: "NOTICE ADJOURNING SENTENCING as to Jona Rechnitz: The sentencing in this matter is ADJOURNED from January 21, 2026, to February 24, 2026, at 3:00 p.m. Defendant shall file his sentencing submission on or before January 14, 2026, and the Government shall file its response on or before January 21, 2026." On January 14 Rechnitz's counsel asked for time served, based on an offense level of 28. On January 26 counsel corrected it to level 29 - but still asked for time served. On January 22 the US Attorney's Office wrote in that it intends to move on February 24 under Section 5K1.1, based on cooperation. On February 20 COBA wrote in urging imprisonment, to "warm future fraudsters." The case is USA v. Rechnitz, 1:16-cr-389 (Failla) Watch this site. *** Your support means a lot. As little as $5 a month helps keep us going and grants you access to exclusive bonus material on our Patreon page. Click here to become a patron. Feedback: Editorial [at] innercitypress.com SDNY Press Room 500 Pearl Street, NY NY 10007 USA Mail: Box 130222, NY NY 10013 Reporter's mobile (and weekends): 718-716-3540 Other, earlier Inner City Press are listed here, and some are available in the ProQuest service, and now on Lexis-Nexis.  Copyright 2006-2026 Inner City Press, Inc. To request reprint or other permission, e-contact Editorial [at] innercitypress.com