Tuesday, December 20, 2016

Core Construction Services Southeast, Inc. v. Crum & Forster Specialty Insurance Co.: Insurer Had No Duty To Defend Additional Insured’s Faulty Work, Judge Holds

Insurer Had No Duty To Defend Additional Insured’s Faulty Work, Judge Holds

(December 9, 2015, 10:38 AM EST) -- ORLANDO, Fla. — Allegations of an additional insured’s faulty work to a roof do not constitute an “occurrence,” a Florida federal judge ruled Dec. 7, finding that a commercial general liability insurer had no duty to defend or indemnify (Core Construction Services Southeast, Inc. v. Crum & Forster Specialty Insurance Co., No. 14-1790, M.D. Fla.; 2015 U.S. Dist. LEXIS 163695).
(Order available. Document #69-160108-002R.)

Core Construction Services Southeast Inc. served as general contractor for the Lakeview at Carlton Lakes, a condominium project. In 1996, Core Construction entered into a subcontract with Patnode Roofing Inc. to install roofs at the Lakeview. From Aug. 1, 2003, to Aug. 1, 2008, Patnode was insured under a series of one-year commercial general liability policies issued by Crum & Forster Specialty Insurance Co. Patnode completed its work on the Lakeview in 1998.

In 2005, Hurricane Wilma hit the Lakeview, and a number of its roofs were damaged.

Empire Indemnity Insurance Co. paid a portion of the losses sustained by the Lakeview at Carlton Lakes Condominium Association Inc., then entered into an assignment allowing it to pursue the association’s claims resulting from the roof damage. Empire, as both assignee and subrogee of the association, sued Core Construction, Patnode and others in 2007, seeking to recover damages allegedly caused by construction defects in the condominium project.

Duty To Defend

Core Construction tendered its defense to Crum & Forster, but the insurer refused to defend or indemnify Core Construction. On Nov. 3, 2014, Core Construction sued Crum & Forster in the U.S. District Court for the Middle District of Florida, alleging that the insurer breached one or more of the CGL policies by refusing to defend or indemnify Core Construction as an additional insured. On Aug. 10, 2015 Core Construction settled the underlying action. Core Construction and Crum & Forster filed motions for summary judgment.

Judge Gregory A. Presnell granted summary judgment to Crum & Forster, finding that the insurer had no duty to defend or indemnify Core Construction. Citing United States Fire Insurance Co. v. J.S.U.B., Inc. (979 So.2d 871, 891 [Fla. 2007]), the judge held that Florida law provides that faulty work can constitute an “occurrence” when the work causes “property damage” to the completed project. However, the judge noted that the faulty workmanship must result in damage to some other element to cause property damage.

The judge then cited Auto-Owners Insurance Co. v. Pozzi Window Co. (984 So. 2d 1241, 1248 [Fla. 2008]) to explain that the “mere inclusion of a defective component, such as a defective window, or the defective installation of a window, does not constitute property damage unless that defective component results in physical injury to some other tangible property.”

No ‘Occurrence’

Judge Presnell agreed with Crum & Forster that there were no allegations that Patnode’s allegedly faulty work resulted in “property damage” because it asserted only that the roofs had been damaged, rather than asserting that the faulty roofs had caused damage to other elements of the Lakeview. The judge found that Empire asserted that as a result of various breaches of duty on the part of Core Construction and the other defendants, the plaintiffs have been damaged and have been required to repair and replace the roofs of the condominiums.

“The only items explicitly referenced in the Fourth Amended Complaint as requiring repair or replacement are the roofs. Similarly, the document assigning the Association’s claims to Empire — which was attached to the Fourth Amended Complaint — recites that the Association ‘believes that the damages and defects sustained by the roofs of the 24 buildings at [the Lakeview] caused by negligent and faulty construction exceed $2,684,358.16’ and limits the claims assigned to ‘the damages to the roofs of the 24 buildings at [the Lakeview],’” the judge said.

Finally, the judge rejected Core Construction’s argument that Empire’s complaint establishes two categories of damages — one consisting of damages resulting from the Defendants’ breaches, and one consisting of the repair and replacement of the roofs. However, the judge held that it does not suggest that Empire alleged that the roofs had to be replaced and their failure caused damage to other parts of the buildings, as needed to assert a claim for property damage. Therefore, the judge ruled that Crum & Forster had no duty to defend or indemnify.

Subcontractor construction worker for SGL Constructors killed on Interstate 4 after he was hit by a piece of steel Monday afternoon in Altamonte Spring

I-4 Ultimate worker killed by piece of steel, officials say 

Stephanie Allen Orlando Sentinel

Officials: I-4 Ultimate worker killed by piece of steel in Altamonte Springs

A 63-year-old construction worker on Interstate 4 was fatally struck by a piece of steel Monday afternoon in Altamonte Springs, officials say.

The worker was a subcontract employee for SGL Constructors, the lead contractor on the interstate's multibillion-dollar I-4 Ultimate makeover.

SGL spokesman Russ Handler said the worker was killed about 2:30 p.m. while at a site just off I-4 east near Cranes Roost, at State Road 436.

The worker's identity hasn't been released.

Handler said work on the project was stopped after the incident, but crews were expected to report this morning.

"We are deeply saddened by this loss," Handler said in an emailed statement. "Our focus now is to ensure that we support individuals and families affected by this tragic event."

No other details about the incident have been released.

Altamonte Springs police spokeswoman Evelyn Estevez said the incident appears to be accidental.

SGL officials were investigating with authorities, Handler said.

USPS box truck driver killed after he struck an abandoned Ford minivan on the right shoulder of the highway, causing the truck to overturn and hit a large metal pole on I-680 in Danville, CA

Sacramento man dies in truck crash; USPS package spill
Alex Savidge reports.

Posted:Dec 19 2016 05:37AM PST

Updated:Dec 19 2016 02:59PM PST
DANVILLE (BCN) - The driver of a box truck that overturned on Interstate Highway 680 in Danville early this morning has died, according to the California Highway Patrol.

The crash was reported at 3:24 a.m. on the southbound side of the highway at West El Pintado Road.

The driver of the two-axel box truck, a 26-year-old man from Sacramento, apparently struck an abandoned Ford minivan on the right shoulder of the highway, causing the truck to overturn and hit a large metal pole, the CHP said.

Emergency crews arrived to find the man trapped inside the truck. They were able to extract him from the wreckage and take him to the hospital, where he died, according to the CHP.

Sacramento man dies in truck crash; USPS package spill

The cause of the collision is under investigation, but the CHP said it doesn't appear that drugs or alcohol were a factor.

The truck was carrying hundreds of packages for the U.S. Postal Service, many of which spilled across the highway, closing three of the four lanes and snarling the morning commute for hours.

At a little after 9 a.m., the CHP reported that all lanes except the far right lane were reopened.

Drivers were being advised to use alternative routes and avoid the area.

Anyone with information about the crash is asked to call the Contra Costa CHP at (925) 646-4980.

West Haven, Conn. paid $125K in fines and agreed to make changes to reduce illegal discharges from sanitary sewer overflows and Improve Stormwater System

West Haven, Conn. will Improve Stormwater System under Amended Settlement
Contact Information:
EPA Public Affairs

BOSTON, MASS. - The City of West Haven, Conn. will make changes to its stormwater system to ensure that local waterways are adequately protected and that the City is complying with its state permit for stormwater discharges. The stormwater system upgrades are included in a proposed agreement to amend a 2014 Clean Water Act Consent Decree between the City, the US Environmental Protection Agency and the State of Connecticut.

Under the 2014 Consent Decree, West Haven agreed to make changes to reduce illegal discharges from sanitary sewer overflows. After the Consent Decree was entered, EPA became aware there were also several problems related to the way the city was implementing its municipal separate storm sewer system (MS4) program. Amending the 2014 Consent Decree will help the City consolidate its system upgrades, maximizing the efficiency of their efforts to improve water quality and comply with the Clean Water Act.

In an April 2015 inspection of the system, EPA documented numerous places where the City failed to follow the requirements of its storm sewer permit. In particular, it had failed to: update its stormwater management plan and submit an annual report since 2009; properly monitor its outfalls in 2011, 2012 and 2013; put in place a public education program related to stormwater; adequately map its MS4 system; put in place a way to eliminate illicit discharges; and to review its stormwater management plan to determine whether stormwater from the city's five outfalls that discharge into New Haven Harbor met permitted limits.

"Protecting our waterways means not only stopping direct discharges of sewage overflows from sanitary systems, but also protecting our rivers, ponds, lakes and streams from contaminated runoff by adequately managing stormwater," said Curt Spalding, regional administrator of EPA's New England office. "We appreciate that the City of West Haven is going to focus its efforts on addressing both these important programs."

"West Haven's additional measures to ensure compliance with the Clean Water Act benefit all of us," said U.S. Attorney Deirdre M. Daly. "We are thankful for each opportunity to partner with the EPA and the State of Connecticut in an effort to ensure and maintain the chemical, physical, and biological integrity of the waters of this State."

The City has hired a consulting firm to help it comply with the requirements of the 2014 Consent Decree regarding sanitary sewer overflows. The new amendments will make it more likely the City will be able to address all of its stormwater and wastewater management obligations in a coordinated and efficient fashion. The proposed changes to the 2014 Consent Decree are subject to a public comment period and approval by the court. The alterations are expected to cost hundreds of thousands of dollars.

As part of the original settlement the City paid a total penalty of $125,000. The amendments to the Consent Decree would require West Haven to comply with specific provisions of the MS4 Permit by specific dates. The City of West Haven owns and operates a treatment system with about 145 miles of sewers and 13 pumping stations, as well as a wastewater treatment facility that discharges to New Haven Harbor. The City estimates it has about 50 municipal separate storm sewer system outfalls.

More information:

During EPA’s 2016 fiscal year, enforcement actions secured $13.7 billion in investments by companies for projects to control pollution.

EPA Announces 2016 Annual Environmental Enforcement Results

WASHINGTON, DC – The U.S. Environmental Protection Agency (EPA) today announced its 2016 annual enforcement and compliance results, highlighted by a series of high-impact cases that are delivering environmental and public health benefits to communities across the country. During EPA’s 2016 fiscal year—which spanned October 1, 2015 to September 30, 2016—EPA enforcement actions secured $13.7 billion in investments by companies for projects to control pollution. EPA also secured enforceable commitments that ensure the proper treatment, storage and disposal of an estimated 62 billion pounds of hazardous waste, the majority coming through a settlement with Mosaic Fertilizer for their eight facilities across Florida and Louisiana.

Two recent landmark settlements—one with BP and one with Volkswagen—are among the most comprehensive and impactful environmental cases in U.S. history. On April 4, 2016, the court entered an agreement with BP for a $20.8 billion settlement to resolve Clean Water Act violations stemming from the Deepwater Horizon blowout and resulting oil spill, with more than $20 billion going to restore impacted communities and the environment. In a case that was lodged in fiscal year 2015 but not entered by the court until October 25, 2016, Volkswagen agreed to spend up to $14.7 billion on projects to reduce air pollution, remedy environmental damage and buy back 2.0 liter diesel vehicles to settle allegations of using illegal software to cheat emissions tests and deceive customers.

“EPA’s enforcement work continues to hold violators accountable and deliver investments to reduce pollution in our communities,” said Cynthia Giles, Assistant Administrator for EPA’s Office of Enforcement and Compliance Assurance. “The American public depends on EPA to enforce the law, protect our communities from pollution and help ensure a level playing field for responsible companies.”

To view an interactive map showing the location of EPA’s 2016 enforcement actions, click here

EPA’s 2016 enforcement efforts also secured:
  • More than $1 billion in commitments from responsible parties to clean up Superfund sites, and return $55 million to the Superfund trust.
  • Commitments from companies to reduce, treat or eliminate releases of pollution by an estimated 324 million pounds per year.
  • Clean up of an estimated 174 million cubic yards of contaminated water or aquifers and 17 million cubic yards of contaminated soil.
  • A combined $6 billion in federal administrative, civil judicial penalties and criminal penalties.
  • $207 million in criminal fines and restitution, and a combined 93 years of incarceration for criminal violations of federal environmental laws.
  • EPA continued to pursue high impact cases to drive compliance and tackle the biggest pollution problems across industries:
  • Tesoro Corp., one of the largest fuel refiners in the U.S., and Par Hawaii Refining will improve public health protections by spending $403 million on advanced pollution control equipment to reduce air pollution at six refineries and $12 million on projects to improve public health in local communities previously impacted by pollution.
  • Enbridge, which owns and operates one of the world’s largest oil pipeline systems, will spend at least $110 million on implementing a series of state-of-the-art leak detection and monitoring measures to prevent spills, improve operations and protect communities across nearly 2,000 miles of its pipeline system in the Great Lakes region, following oil spills in Michigan and Illinois in 2010. Enbridge is also paying $62 million in penalties.
  • In a settlement with Marathon Petroleum Company, the company will spend $319 million to install state-of-the-art air pollution controls at refineries in five different states, protecting the health of low-income and other vulnerable communities across the Southeast and Midwest.
  • Sears will implement a comprehensive, corporate-wide program to ensure its contractors minimize lead dust from home renovation activities to protect the health of children and other vulnerable communities from exposure to lead-based paint.
  • A settlement with Southern Coal Corporation and its affiliates requires the companies to comprehensively upgrade their coal mining and processing operations, at an estimated cost of $5 million, to prevent polluted wastewater from threatening rivers and streams and overburdened communities across Appalachia.
  • A settlement with national grocery store chain Trader Joe’s Company will reduce potent greenhouse gas emissions from refrigeration equipment at 453 stores nationwide and sets a high standard for the grocery industry for detecting and fixing coolant leaks.
  • EPA is working closely with local governments and utilities in communities such as Salt Lake County, Utah, Greenville, Miss. and the city of Rockford, Ill. to cut discharges of raw sewage and contaminated stormwater through integrated planning, green infrastructure and other innovative approaches.

More information about EPA’s fiscal year 2016 enforcement results:https://www.epa.gov/enforcement/enforcement-annual-results-fiscal-year-2016


Sleep Deprivation Affects Cognitive Function Similarly in Women and Men Working Shifts

Sleep Deprivation Affects Cognitive Function Similarly in Women and Men Working Shifts

Sleep deprivation associated with working during regular sleeping hours, or working shifts, can be detrimental to awareness and alertness. In turn, working around heavy equipment or behind the wheel can be dangerous if you’re not sufficiently alert. Less clear is whether or how other factors such as work stress and sleep quality interact with shift work to affect cognitive function. In addition, given gender differences in the processes involving sleep, health, and stress, it is also unclear if these factors may affect cognition differently in women and men.

To find out, investigators at the National Institute for Occupational Safety and Health (NIOSH) and their Canadian partners examined the relative effects of different variables on cognitive function, including work stress, shift work, and sleep quality. In a paper published in the peer-reviewed journal Occupational and Environmental Medicine, they reported that women generally had fewer hours of sleep, poorer sleep quality, and greater work-related stress compared to men. However, they found no difference between women and men in the effect of shift work on self-assessed cognitive function. Health and age also played an important role on cognition directly and through sleep. According to the investigators, these findings underscore the need for occupational health and safety programs that address cognitive function among all shift workers by focusing on stress, health, and sleep hygiene.

The study used data from 4,255 respondents to Canada’s National Population Health Survey in 2010. Participants’ average age was 43, and slightly more than half were women. All participants held jobs, with 75% working regular daytime hours and the remainder working either shift hours, rotating day and night hours, or on-call hours.
More information is available:

NIOSH: Work-related Lead Exposure Unrelated to Thyroid Function in Men

Work-related Lead Exposure Unrelated to Thyroid Function in Men

Memory loss, weakness, irritability, and fatigue are just some of the obvious health effects of exposure to lead, but what about hidden risks? Of concern are the possible consequences of lead exposure on the thyroid gland and the hormones it produces, which are critical to cell function. Although studies have looked at this issue, a quantitative review, or meta-analysis, of the results of these studies was unavailable until now.

To address this research gap, an investigator at the National Institute for Occupational Safety and Health (NIOSH) reviewed 16 studies of lead-exposed workers. Each study measured the blood concentrations of the two major thyroid hormones, thyroxine and triiodothyronine, as well as a thyroid-stimulating hormone, which is produced by the pituitary gland and acts on the thyroid gland. The analysis, published in the American Journal of Industrial Medicine, showed that the average level of thyroid hormones in the blood was similar between workers exposed to lead on the job and those who were not exposed. In addition, the analysis did not find a link between duration of work-related exposure to lead and blood concentration of thyroid hormones. Since the studies in the analysis included few women, the effects of work-related lead exposure on thyroid hormone levels in this group remain unclear, and future research should include adequate numbers of women.

Fortunately, work-related exposure to lead is less common today than in past years, since many consumer products no longer contain the toxic metal. Certain industries, however, such as construction, mining, and manufacturing, still use lead-containing materials, posing a risk of exposure to workers. To prevent exposure, NIOSH recommends wearing proper personal protective equipment, such as goggles, gloves, boots, and protective clothing. Other recommendations on the NIOSH website include showering and changing clothes and shoes after working around lead and lead dust.
More information is available:

Police cruiser collides with pickup truck and a car at an intersection in Philadelphia, PA

Monday, December 19, 2016 08:54PM
OLNEY (WPVI) -- Authorities are investigating a crash involving a Philadelphia police cruiser in Olney.

It happened around 7 p.m. Monday at 5th Street and Fisher Avenue.

The impact of the crash sent a car onto a sidewalk crashing into a storefront.

A Philadelphia police cruiser was also involved.

There were no injuries to officers or civilians.

The crash remains under investigation.

Mark Nordlicht, a founder and the chief investment officer of Platinum Partners, and six others arrested on charges related to a $1 billion fraud

Platinum Hedge Fund Executives Charged With $1 Billion Fraud


DEC. 19, 2016

Robert Capers, the United States attorney in Brooklyn, arriving at federal court on Monday to announce the indictment of Mark Nordlicht, the founder and chief investment officer of Platinum Partners, and six other individuals on securities fraud, investment adviser fraud and conspiracy. Credit Andrew Kelly/Reuters

For years, the little-known New York hedge fund Platinum Partners stood out for double-digit investment returns that rivaled some of the biggest names in the industry.

It turned out that those returns were too good to be true, according to federal prosecutors.

Federal agents on Monday arrested Mark Nordlicht, a founder and the chief investment officer of Platinum, and six others on charges related to a $1 billion fraud that led the firm to be operated “like a Ponzi scheme,” prosecutors said. It is one of the largest such fraud cases since Bernard L. Madoff’s investment firm unraveled in 2008.

David Levy, the firm’s co-chief investment officer, was also among those arrested in the morning by agents in Texas, Manhattan and New Rochelle, a suburb of New York City. The men were charged with securities fraud and investment adviser fraud, according to an unsealed indictment filed in Federal District Court in Brooklyn. The Securities and Exchange Commission filed a parallel civil case.

Platinum tapped prominent families and foundations within the Orthodox Jewish community in New York to fuel high-stake bets on payday lenders, oil companies and even the terminally ill. But prosecutors said these investments and the firm’s performance were misrepresented by its executives. Ultimately, Platinum took in new money in order to pay longtime investors who wanted their money back, something the firm’s executives called among themselves “Hail Mary time.”

“As investors sought redemptions, the defendants engaged in numerous improper measures in an attempt to meet redemption requests, including taking out high-interest rate loans, commingling monies among funds and raising money from new investors through fraudulent misrepresentations,” said Andrew J. Ceresney, the director of the S.E.C.’s enforcement division.

Located a few blocks from Central Park, Platinum, founded in 2003, made a splash early on with some of its investments. In one bet, the firm sought to profit from the death of terminally ill patients by investing in variable insurance payouts. As part of the scheme, a rabbi in Los Angeles sought out hospice patients to get their personal details that could be used to buy insurance payouts in their names.

A company that Platinum set up to make the investments was fined by the S.E.C. in January 2015. “We definitely were exploiting a loophole, but it was fully vetted by legal counsel,” Mr. Nordlicht said in an interview with Bloomberg later that year.

In other bets, Platinum misled both investors and auditors — sometimes brazenly. In December 2012, for example, executives misrepresented to auditors the value of Black Elk Energy, an oil and gas company controlled by Platinum, valuing it at $283 million, prosecutors said. In fact, there had been an explosion on a Black Elk platform in the Gulf of Mexico the month before that had caused the deaths of three workers, injuries to other employees and an oil spill. Black Elk no longer exists.

Jeffrey Shulse, who worked at Black Elk and is named in the government’s indictment, denied the charges. “Mr. Shulse’s indictment is a clear case of overreaching,” said F. Andino Reynal, Mr. Shulse’s lawyer, adding that his client was “confident that once a jury has had a chance to hear all the facts, it will exonerate him of any wrongdoing.”

Lawyers for the defendants Mr. Nordlicht, Daniel Small, Uri Landesman, Joseph Mann and Joseph San Filippo did not respond to a request for comment. Michael Sommer, a lawyer for Mr. Levy, said he looked forward to “clearing David Levy’s good name.” Photo

Murray Huberfeld, right, a former executive of the hedge fund Platinum Partners, leaving Manhattan Federal District Court after his arraignment on federal corruption charges in June. Credit Bryan R. Smith for The New York Times

As recently as March, Platinum had $1.7 billion of investor money, as of a March regulatory filing. For years it reported a strong performance — with annual average returns of 17 percent.

As recent as last year, Platinum said it made gains of 8 percent, a strong performance in a year when the average hedge fund lost 0.85 percent, according to the Hedge Fund Research Composite Index, a gauge of industry performance.

Platinum began to have trouble extracting investor money when some of its obscure investments started to sour, according to prosecutors. From 2013 to 2016, the firm could not stanch the losses in certain funds and the investor requests to withdraw money, so it began to move money between funds in what Mr. Nordlicht called a “big stew,” the indictment said.

Things seemed to reach a crisis point in June 2014, prosecutors said. “It can’t go on like this or practically we will need to wind down....this is code red,” Mr. Nordlicht wrote to Mr. Landesman, a managing director at Platinum, at the time.

Yet investors remained in the dark about the firm’s precarious liquidity position. A month later, when an investor emailed to ask about the reliability of Platinum’s reported performance figures, Mr. Landesman replied, “The numbers are all kosher, they have had verbal input every month.”

Investors grew restless. By March 2015, the total amount they requested to withdraw from the firm exceeded $83 million. Eventually, executives decided to pay some ahead of others, prosecutors said.

“Platinum Partners purported to be a standard-bearer in the hedge fund industry,” said Robert L. Capers, the United States attorney for the Eastern District of New York. “In reality, their returns were the result of the overvaluation of their largest assets.” This inflation led to Mr. Nordlicht and others “operating Platinum like a Ponzi scheme, where they used loans and new investor funds to pay off existing investors,” Mr. Capers added.

The arrests on Monday were part of an investigation among several government agencies, including the Federal Bureau of Investigation and the United States Postal Inspection Service. In June, Murray Huberfeld, a former Platinum executive, was arrested. He has pleaded not guilty to conspiracy and wire fraud.

Soon after Mr. Huberfeld’s arrest, agents from the F.B.I. and the Postal Inspection Service raided Platinum’s New York offices. Faced with mounting pressure from federal investigators, as well as an investigation by the S.E.C., Platinum liquidated its main hedge fund.

For some at Platinum, there was already a sense late last year that government investigators were closing in on the firm. In an email exchange, Mr. Nordlicht, Mr. Landesman and an unnamed principal partner in Platinum discussed fleeing to Israel, according to prosecutors.

“Don’t forget the books,” the unnamed partner wrote. “Assume we are not coming back to ny.”


Fraud Charges Against Jail Officers’ Union Chief With a Taste for Luxury


JUNE 8, 2016

Norman Seabrook, the president of the New York City correction officers’ union, leaving Manhattan’s Federal District Court after an appearance on Wednesday. Credit Bryan R. Smith for The New York Times

As federal agents tell it, the kickback scheme that led to the arrest on Wednesday of Norman Seabrook, the powerful leader of the New York City correction officers’ union, was hatched one night in late 2013 in a hotel room in the Dominican Republic.

The union president had been drinking and was delivering an earful to a well-connected New York real estate developer, according to the agents. For too long, Mr. Seabrook complained, he had been working hard to invest the union’s money and had not received anything in return.

It was time, he said, that “Norman Seabrook got paid.”

Within months Mr. Seabrook made an investment deal that made even union lawyers uneasy, putting $20 million of union funds in a high-risk hedge fund, according to a criminal complaint filed by the office of Preet Bharara, the United States attorney for the Southern District of New York. In exchange, prosecutors said, he was given $60,000, delivered in a Salvatore Ferragamo bag — one of his favorite luxury brands.

Over the course of two decades as union president, Mr. Seabrook has gone from a jail guard patrolling the cellblocks of Rikers Island to an influential power broker, forming alliances across the political spectrum including with Gov. Andrew M. Cuomo, a Democrat; former Mayor Michael R. Bloomberg, an independent; and former Gov. George E. Pataki, a Republican.

Just looking at him, it is clear Mr. Seabrook enjoys life’s finer things. He is driven around town in luxury S.U.V.s, dines at upscale restaurants, smokes fine cigars and wears expensive tailored suits, often with a pocket square.

Indeed, after Mr. Seabrook was arrested, agents from the Federal Bureau of Investigation recovered a Ferragamo bag that matched the description of the one stuffed with cash, along with 10 pairs of Ferragamo shoes.

At least some of Mr. Seabrook’s luxuries were paid for by people seeking favors from him and the union, according to investigators. Plane trips to Las Vegas, California, Israel and at least two to the Dominican Republic were underwritten by Jona Rechnitz, the developer at the hotel that night in 2013. After that meeting, Mr. Rechnitz introduced Mr. Seabrook to a hedge fund financier named Murray Huberfeld, and helped arrange for the kickback, according to federal investigators.

Mr. Rechnitz, who has pleaded guilty and is cooperating in the Seabrook case, is also a central target in one of the investigations that are focused on the campaign fund-raising of Mayor Bill de Blasio, a Democrat. He is not named in the complaint and is referred to instead as Cooperating Witness 1 or CW-1.

Both Mr. Seabrook and Mr. Huberfeld, an associate at the hedge fund, Platinum Partners, have been charged with one count of honest services fraud and one count of conspiracy to commit honest services wire fraud. Mr. Seabrook was released on $250,000 bond and Mr. Huberfeld on $1 million bond. Both have been ordered to remain in the New York City region.

After the meeting at the hotel, according to prosecutors, Mr. Rechnitz went to Platinum promising to arrange a deal with the union to become a major investor. The catch, he said, was that Mr. Seabrook would have to be compensated. Mr. Huberfeld agreed to the arrangement and was willing to pay Mr. Seabrook 10 percent of all profits that the hedge fund made on the union’s investment. Photo

Murray Huberfeld, right, leaving court. An associate at Platinum Partners, he and Mr. Seabrook were charged with honest services fraud and conspiracy to commit honest services wire fraud. Credit Bryan R. Smith for The New York Times

Mr. Seabrook, whose salary is $300,000 a year with his union stipend, had one overarching concern, according to the complaint: how big his cut would be.

Mr. Huberfeld told him it could be as much as $150,000 a year.

In return, Mr. Seabrook would direct money intended to cover correction officers’ pensions into a high-risk fund. Up to that point the union had maintained a traditional investment portfolio made up of conventional stocks and bond funds, government obligations and a real estate trust fund.

The union’s lawyers reviewed the proposal and pointed out that the union had never invested in a hedge fund before, nor had any other New York City retirement fund that they were aware of been involved in such a risky venture. Even so, they did not stand in the way of the deal.

“The annuity fund, however, is not averse to being a trendsetter,” the lawyers wrote to Platinum in February 2014.

There were other red flags particular to Platinum. Mr. Huberfeld had been convicted of fraud in 1993 for arranging for another person to take a brokerage licensing exam on his behalf. He was fined $5,000 and sentenced to two years of probation. In a separate case, in 1998, he and a partner paid $4.6 million to settle a civil action brought by the Securities and Exchange Commission that alleged bank fraud.

At a news conference on Wednesday, Mr. Bharara said that Mr. Seabrook made his investment decisions “based not what was good for his union members but based on what was good for Norman Seabrook.”

“For a Ferragamo bag filled with cash, Seabrook allegedly sold himself and his duty to safeguard the retirement funds of his fellow correction officers,” Mr. Bharara said.

In the end, it was Mr. Seabrook who made the final decision on where the union money went. Over the years, he had consolidated absolute control over the operations of the union, often bypassing his executive board on even the most significant financial decisions.

According to the authorities, he ultimately invested $15 million from the union’s annuity fund, which is financed almost completely through annual contributions from the city, as well as another $5 million from the union’s $12 million in assets at the time. “The investment decision was made by Seabrook alone,” the union’s treasurer, Michael Maiello, told investigators.

By the end of 2014, according to the complaint, Mr. Seabrook began demanding a payout for his services. The hedge fund, however, was performing worse than expected, and Mr. Huberfeld could not immediately get his hands on the money. Instead, Mr. Rechnitz fronted his own money to pay off Mr. Seabrook with a promise from Platinum that he would be reimbursed. For accounting purposes, Mr. Rechnitz disguised the kickback as a $60,000 payment for a block of New York Knicks tickets.

On Dec. 11, 2014, Mr. Rechnitz bought the bag from a Ferragamo store in Manhattan for $820. The handoff was made a few blocks away in Mr. Seabrook’s Chevrolet Suburban, which is registered to the union.

When Mr. Rechnitz “told Seabrook how much money was in the bag, Seabrook was angry that it was not as much money as he was initially promised,” the complaint said.

After the handoff, the men went out to dinner and attended a Torah dedication ceremony at a local synagogue.

As the months went on, Platinum representatives kept pressing Mr. Seabrook to invest more union funds. According to investigators, the hedge fund was having cash flow problems and needed $44 million for investors seeking to pull out their money.

On Jan. 27, 2015, Mr. Huberfeld, speaking on a phone that federal agents had wiretapped, told an associate to press Mr. Seabrook for more money during a lunch meeting.

“I’m under some pressure,” he said, according to the complaint.

On May 19, 2015, the marketing director of Platinum sent an email to other executives noting that the meeting with Seabrook went great and that he “said he will send us more money shortly.”

But before Mr. Seabrook could transfer more money, federal agents served subpoenas on the union and Platinum. “No further investments were made,” the complaint said.

The complaint does not make clear what happened to the $20 million the union invested.

In a filing for a lawsuit brought last year by a former union official over alleged financial improprieties, he boasted that the investment had returned $475,000 in a recent three-month period. A union financial statement listed a return of just $47,529 for the same time.

The union recently mailed out ballots for an election this summer listing Mr. Seabrook as running unopposed for president. But his future is unclear.

On Wednesday, he was suspended as a correction officer, relieved of his shield and gun. He sat in a packed courtroom looking relaxed. He was dressed more modestly than usual: jeans, a collared shirt and sandals.

When asked by a reporter at the courthouse how he felt, Mr. Seabrook replied, “I feel like a million dollars.”