Another Big-Money Rothstein Player With a Dubious Past
He was a Ponzi schemer who went to school in the Bronx, promoted bogus deals for investors, and used the illicit proceeds to buy political influence before he was finally busted and put in prison.
|Asbury Park Press|
You might remember Dwek as the lead player in the FBI sweep last year in New Jersey that netted five local and state politicians, five rabbis, and 34 others on public corruption and money laundering charges. The Dwek case, which involved a $400 million Ponzi, has captured media attention in New Jersey much the same way the Rothstein case has in Florida.
And there is at least one man who comes up in the sagas of both Rothstein and Dwek: hedge fund man Murray Huberfeld of New York.
Huberfeld was subpoeanaed for a deposition and records regarding his dealings with Dwek in a civil case, and Huberfeld's New York hedge fund, Centurion Credit, reportedly loaned Rothstein's top money source and close associate George Levin at least $20 million that was put into the scheme, according to Hedge Fund Alert. I have a call into Levin's P.R. camp for answers on how he came to tap Huberfeld's seemingly endless money pump.
It's not known what involvement Huberfeld had with Dwek, but he's definitely a guy with a knack for finding shady deals. Huberfeld has been the subject of numerous SEC complaints, and in 1993, he and partner David Bodner pleaded guilty in federal court to
possessing false I.D.s while taking government exams. Back in 1996, Huberfeld was hit by the Securities and Exchange Commission in a case involving fraud and unregistered stock. In that case, which involved Huberfeld's firm Broad Capital, Huberfeld was ordered to cease and desist from violating trading rules again (don't you love how white-collar crooks are often punished by the government with the equivalent of "well, don't do it again"?) and forced to disgorge more than $400,000 in profits and interest made from the deals. In 1998, the SEC hit Huberfeld and Broad with more of the same. More recently, he ran into a snag with the FDIC.
A quick aside: That this guy is still operating at a high level -- Centurion alone is said to manage $400 million -- is in my view a great testament to the weak regulation of deviant financial activities in the United States.
I left a call with Huberfeld at Centurion and will update with his information when he returns the call. But what is truly astonishing about the man isn't that he survived in business but that he's done so without scrutiny from the New York press and at the same time is touted as a major Jewish leader. The only coverage on Huberfeld has come from muckraking blogger Shmarya Rosenberg, of FailedMessiah.com. Here's a post to get you started there. Perhaps the lack of public scrutiny is one reason that former President George W. Bush had no qualms naming Huberfeld a member of his honorary delegation to Israel. In 2005, Huberfeld held court with the pope as a member of a delegation from the Simon Wiesenthal Center. He's also, not surprisingly, a regular in the New York charity circuit.
Huberfeld's stock in trade, according to Rosenberg and other small publications, has been drawing Jewish religious charities' money into his deals. Interestingly, Dwek was also involved with Jewish charities' cash and took it a step further by laundering money given him by phony donors. The following is from a summarizing Star-Ledger report on the Dwek case:
In the months after his arrest, Dwek began serving as an FBI informant while free on bail, according to sources close to the investigation.
He began meeting with rabbis and other figures in an international money ring that allegedly laundered tens of millions of dollars through Jewish charities and non-profit organizations in New York and New Jersey. Over two years, he was allegedly able to launder more than $3 million by posing as a businessman trying to conceal criminal proceeds.
Interesting parallels. You can bet that the FBI is digging into not only Levin but also those who, like Huberfeld, loaned him money that went into the Ponzi. There is a pattern developing here: A whole lot of the Rothstein Ponzi money came from people with spotty pasts who probably should have been drummed out of the world of high finance a long time ago.