United States v. Seabrook

1

UNITED STATES OF AMERICA, v. NORMAN SEABROOK, Defendant.

No. 16 Cr. 467 (AKH), 21 Civ. 8767 (AKH)

United States District Court, S.D. New York

August 10, 2022

ORDER DENYING PETITION UNDER 28 U.S.C. 2255 BUT SUGGESTING PROCEEDINGS FOR COMPASSIONATE SENTENCING REDUCTION

ALVIN K. HELLERSTEIN, DISTRICT JUDGE

In a second try after a split jury, Petitioner Norman Seabrook was convicted of one count of honest services wire fraud (18 U.S.C. § 1349) and one count of conspiracy to commit such crime (18 U.S.C. §§ 1343, 1346). I sentenced Seabrook to 58 months custody and $19 million restitution payable at 10% of his net income. The Second Circuit affirmed. See United States v. Seabrook_t 814 Fed.Appx. 661, 662 (2d Cir, 2020). Petitioner then petitioned to vacate his convictions. I denied the petition except for one ground about which, after further briefing, I now write. Order Denying Habeas Petition in Part, ECF No 436. For the reasons that follow, the balance of Seabrook's habeas petition is denied.

BACKGROUND^[1]

Seabrook the former President of the Correction Officers Benevolent Association (“COBA”), was found by a jury to have accepted a bribe in 2014 to cause COBA to invest $20 million of pension funds, substantially the entirety of the pension fund, in a hedge fund, Platinum Partners LP. The bribe promised him compensation, estimated to be $100,000 the year of the investment and equivalent sums to follow, based on income the fund expected to receive from the investment. Murray Huberfeld, a principal of Platinum Partners, promised to pay the bribe. Jona Rechnitz, a friend of politicians and of both Huberfeld and Seabrook, arranged the bribe. The bribe, however, was not paid in full. Claiming disappointing 2014 results, Huberfeld paid $60,000 through a cash advance facilitated by Rechnitz. Huberfeld then had Platinum Partners repay Rechnitz, disguised on Platinum's books as a repayment for the procurement of court-side tickets for the New York Knicks. COBA ultimately lost $ 19 million of its $20 million investment.

Seabrook and Huberfeld were tried together, but the jury could not agree on a verdict. After re-assignment to me and before re-trial, the government extended a favorable plea deal to Huberfeld, allowing him to plead guilty, not to defrauding COBA of $19 million, but of defrauding his own company, Platinum Partners, of $60,000-the amount listed on Platinum's books as a payment for Knicks tickets. I accepted the plea after an extended allocation, during which Huberfeld admitted that the purpose of the fraud was to bribe Seabrook to gain a $20 million investment from COBA. ECF No. 203, Huberfeld Plea Tr., at 27:21-28:7. I commented that COBA, not Platinum Partners, was the real intended victim, and advised Huberfeld, before accepting his plea, that his sentence might reflect the reality and consequence of his bribe. See id. at 9:15-10:22.

This left Seabrook as the only defendant in the second trial. Jona Rechnitz, the government's main witness, testified again pursuant to a cooperation agreement, and this time, without Huberfeld, the jury accepted his testimony. I sentenced Seabrook on February 8, 2019 to a Guidelines sentence of 58 months' imprisonment,^[2] three years supervised release, and restitution to COBA of $19 million, at a rate of 10% of net income.^[3] See ECF Nos. 298, 302. Seabrook has been in custody since March 30, 2021. I explained my sentence as reflecting an approximate equivalence between the bribe giver, Huberfeld, and the bribe taker, Seabrook, before Guidelines adjustment of five levels - three for Huberfeld's acceptance of responsibility by a timely plea, and two because of Seabrook's violation of his fiduciary duty to COBA. On February 12, 2019,1 sentenced Huberfeld to 30 months to reflect that five-level differential, changing the Guidelines range, from 51-63 months to 30-37 months. See Huberfeld Sentencing Tr., ECF No. 300, at 42:15 43:23; 59:10-21.^[4]

Huberfeld's successful appeal changed the calculus. The Second Circuit held that Huberfeld's plea determined who was the victim and the amount of the loss, not COBA and a $19 million loss, but Platinum Partners and a $60,000 loss. See United States v. Seabrook, 968 F.3d 224 (2d Cir. 2020). In the re-sentencing ordered by the Court of Appeals, Huberfeld was sentenced to 13 months custody and $60,000 restitution to Platinum Partners.^[5] See ECF Nos. 402, 420.

DISCUSSION

There are two issues. The first, raised in Seabrook's briefs is whether the disproportionate sentencing differential between Seabrook and Huberfeld constitutes error warranting section 2255 relief. The second, which the parties have not briefed, is whether the differential is basis for Compassionate Reliefunder 18 U.S.C. § 3582(c)(1)(a).

I. The Difference in Sentences Does Not Entitle Seabrook to Habeas Relief |

In order to obtain collateral relief under Section 2255, a defendant must j demonstrate “a constitutional error, a lack of jurisdiction in the sentencing court, or an error of law or fact that constitutes a fundamental defect which inherently results in a complete miscarriage of justice.” Cuoco v. United States, 208 F.3d 27, 30 (2d Cir. 2000). This is a “significantly higher hurdle than would exist on direct appeal.” United States v. Frady, 456 U.S.152,166 (1982). For a sentencing error to be cognizable on collateral review, it must be “of the fundamental character that renders the entire proceeding irregular and invalid.” United States v. Hoskins, 905 F.3d 97, 103 (2d Cir. 2018) (quoting United States v. Addonizio, 442 U.S. 178, 186 (1979)). “A ‘later development' that ‘did not affect the lawfulness of the judgment itself-then or now,' is not enough to vacate the sentence imposed.” Id. (quoting Addonizio, 442 U.S. at 186-88.

Petitioner argues that he received a sentence disproportionately harsher than the sentences his co-conspirators received and suggests that he suffered a penalty for exercising his right to a trial. The Government argues that this cannot be because Seabrook was sentenced before Huberfeld and Rechnitz. However, I sentenced Seabrook with Huberfeld's potential sentence in mind, and because of the Second Circuit's reversal and remand, followed by Huberfeld's re-sentence, Seabrook's sentence is disproportionate.

Of more importance, disproportionality in sentencing in the Second Circuit is measured nationwide, and not in relation to sentences of co-defendants. United States v. Frias, 521 F.3d 229, 236 (2d Cir, 2008) (“section 3553(a)(6) requires a district court to consider nationwide sentence disparities, but does not require a district court to consider disparities between co-defendants.”); United States v. Stevenson, 834 F.3d 80 (2d Cir. 2016) (rejecting argument based on disproportionate sentences between co-defendants guilty of receiving and giving bribes constituting honest services fraud). Thus, “a defendant has no constitutional or otherwise fundamental interest in whether a sentence reflects his or her relative culpability with respect to his or her codefendants.” United States v. Bokun, 73 F.3d 8, 12 (2d Cir. 1995). And Seabrook cannot complain that his higher sentence after trial was a punishment for not pleading guilty. See Stevenson, 834 F.3d at 84. Seabrook's petition for section 2255 relief is denied.

II. Compassionate Release

The sentences of Huberfeld and Seabrook, as they stand now, are unjustly disproportionate. However, traditionally, a district court cannot modify a sentence once announced. See United States v. Brooker, 976 F,3d 228, 237-38 (2d Cir. 2020); United States v. Gotti, 433 F.Supp.3d 613, 614 (S.D.N.Y. 2020). The First Step Act, providing for compassionate release from custody, or reductions of sentences, is an exception. It provides that the court, upon motion of the Director of the Bureau of Prisons, or upon motion of the defendant after the defendant has fully exhausted all administrative rights to appeal a failure of the Bureau of Prisons to bring a motion on the defendant's behalf or the lapse of 30 days from the receipt of such a request by the warden of the defendant's facility, whichever is earlier, may reduce the term of imprisonment (and may impose a term of probation or supervised release with or without conditions that does not exceed the unserved portion of the original term of imprisonment), after considering the factors set forth in section 3553(a) to the extent that they are applicable, if it finds that-

[1] extraordinary and compelling...