MANHATTAN — Former NYPD Chief of Department Philip Banks received between $250,000 and $500,000 from a politically connected businessman at the center of a federal probe into a pay-for-favors scandal engulfing the NYPD and City Hall, DNAinfo New York has learned.
Jona Rechnitz — owner of the Manhattan-based real estate firm JSR Capital who also has ties to Mayor Bill de Blasio — made the "investments" payout to Banks in 2014 while Banks was serving as the highest-ranking uniformed officer in charge of the NYPD’s daily operations.
The money was reported by Banks on his “exit” financial disclosure form filed with the city’s Conflict of Interest Board on Nov. 30, 2014, a month after he abruptly quit the NYPD, turning down a promotion to First Deputy Commissioner.
Banks' attorney, Benjamin Brafman, declined comment for this story.
The examination of Banks’ financial disclosure forms revealed he was not only a well-paid high-level police official, but a savvy businessman with numerous investments.
On his COIB form, which requests “positions, income and reimbursements' received, Banks included his $200,000-a-year NYPD salary and disclosed the "income” from JSR Capital.
The “nature of the income,” he said, was from “investments.” No additional details were provided.
Sources said the payout covered a return on a one-year investment.
He also reported making an additional “$250,000 to $500,000” another year while working for a tutorial company that coached police officers taking advancement exams.
Brafman said last week that Banks "did not retire because he learned that he was the subject of a criminal investigation.”
And he insisted that any “funds in his bank accounts can be fully attributed to lawful income earned by Mr. Banks, his wife, or to small inheritance Mrs. Banks received after the death of her father.”
“Not one dollar in any of those accounts,” he added, “can be tied to any corrupt conduct whatsoever." He noted, however, if Banks did violate any rule, it was wholly “unintentional.”
Banks was the first choice of first lady Chirlane McCray to succeed Ray Kelly as Police Commissioner over Bill Bratton, who got the job, sources said.
When Banks resigned, he said the First Deputy Commissioner position didn't provide him with the operational and command responsibilities he wanted. But he was also already a focus of a federal inquiry.
Rechnitz, who owns several high-value Manhattan properties, and his business associate, Jeremy Reichberg, were already large de Blasio donors and were on the mayor’s “Inauguration Committee.”
Rechnitz had donated $50,000 to the mayor's now-shuttered nonprofit "Campaign for One New York,”and he and his wife gave the maximum $9,000 to de Blasio’s mayoral campaign, records show.
Banks, Rechnitz, Reichberg and Banks's longtime friend, Norman Seabrook — head of the correction officers union and an early de Blasio supporter — went on numerous trips together in 2014.
The sojourns — partly paid for by the two businessmen — included golf junkets to the Dominican Republic and a trip to Israel, where they were photographed in front of the Wailing Wall with Banks dressed in his NYPD uniform.
The vacations are a part of the now-sweeping FBI investigation into whether Banks and other police officials took gifts for favors and into fundraising activities of donors, business people and politically connected figures with interests before the city.
The case began in 2014 when the FBI got a vague corruption tip involving Banks that led them to unearth a strange pattern of money going in and out of Banks' accounts and often through a Bronx bodega’s ATM, sources told DNAinfo's "On the Inside."
“There were monies coming in at the same time every month, and moving around and we were wondering what was going on,” a well-place source said. “We wondered where it came from, and whether it was being structured" to avoid triggering $10,000 thresholds that would require disclosure.
"Could it all be innocent?” the source said of the transactions. “Could he be the victim of something? We just did not know."
The FBI eventually figured out that the mysterious transactions likely stemmed from rental properties Banks or his relatives owned.
None of what they initially found rose to the level of a federal crime, and sources say the probe was nearly shut down after eight months when the federal investigators had to make a decision whether to keep going.
They thought about handing off their information to local district attorneys and the NYPD to pursue.
They held a summit to review the case, but the decision was to “go all in” and keep investigating, a source said. And that's when they got on to to Rechnitz and Reichberg.
Like many officials, Banks was expected to mingle with well-heeled New Yorkers as part of his duties, including attending banquets and dinners as an NYPD representative.
His dealings with Rechnitz highlighted the murky lines government officials must walk to avoid tripping over conflicts-of-interest, or criminal laws.
The probe so far has led to four high-ranking officers being transferred from their posts last week, with two of them stripped of their guns and badges, for allegedly accepting gifts such as discounted jewelry or free lodgings in exchange for favors.
On Friday, a Manhattan businessman with ties to one of the disciplined police officials was arrested in an alleged Ponzi scheme that ripped off millions from a dozen investors, including Rechnitz and Reichberg, in a bogus nationwide wholesale liquor distribution scam, prosecutors said.
The FBI investigation, which includes hundreds of hours of wiretaps and several cooperating witnesses, has moved to broader political corruption issues involving mayoral fund raising, sources say.
On Sunday, the mayor tried to distance himself from the two businessmen and said he was unaware that federal investigators were looking at fund-raising involving his campaign.
As for Seabrook, federal officials are also probing an allegation that he invested $10 million of union funds in an undisclosed hedge fund without getting board approval.
Seabrook has denied any wrongdoing. He did not return calls for comment.