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Here's What We Know About the Probe Into Mayor Bill de Blasio's Fundraising

By DNAinfo Staff on April 28, 2016 4:53pm  | Updated on March 16, 2017 11:10am

Bookmark this page as we'll be updating it with ongoing developments.

UPDATE: No Charges for De Blasio in Fundraising Probe, Prosecutors Say

WHAT'S THE LATEST? Mayor Bill de Blasio will not face any criminal charges, nor will anyone on his team, in connection to the fundraising probe, prosecutors from the U.S. Attorney's office and Manhattan District Attorney Cyrus Vance announced in concluding their investigations on March 16.

WHAT WAS THE INVESTIGATION ABOUT?
The FBI, the U.S. Attorney's office and the Manhattan District Attorney were looking into whether NYPD brass received gifts and expensive trips in exchange for favors from wealthy businessmen with ties to the mayor.

They were also investigating whether there were quid-pro-quos from City Hall in exchange for donations, or if campaign finance and election laws were broken during de Blasio's failed 2014 bid to help Democrats take control of the state Senate and through the mayor's Campaign for One New York, a nonprofit he used to advance his political agenda.

WHAT DOES THE MAYOR SAY?
The mayor has repeatedly denied that his campaign staffers have committed any wrongdoing, and reiterated that after the probe was concluded with no charges.

"We did everything within the law. We sought guidance and clarity from the Conflict of Interest Board along the way," de Blasio said on WNYC's Brian Lehrer show on March 16.

He insisted that they "not only conformed to the law but went in many cases beyond.”

"Everything we’ve done from the beginning is legal and appropriate," the mayor told reporters during an impromptu press conference over the summer.

HOW DID THE INVESTIGATION START?
The case began in 2014 when the FBI got a vague corruption tip involving former NYPD Chief of Department Philip Banks III that led agents to unearth a strange pattern of money going in and out of Banks' accounts and often through a Bronx bodega’s ATM, sources said.

“There were monies coming in at the same time every month, and moving around and we were wondering what was going on,” a well-placed source said.

The FBI eventually figured out that the transactions didn't stem from illegal activity and considered shutting down the eight-month probe. But when federal investigators held a summit to decide their next course of action, the decision was made to press forward with the investigation.

Eventually the FBI got on to two Brooklyn businessmen: Jona Rechnitz and Jeremy Reichberg.

The pair allegedly wooed more than a dozen NYPD officers with free food, cash and lavish international trips.

Banks, for example, received between $250,000 to $500,000 from Rechnitz's Manhattan-based real estate firm, JSR Capital, according to the ex-officer's financial disclosure forms. The money was reported as "income" from "investments," but additional details were not provided.

Banks also took overseas trips to Israel and the Dominican Republic that were partly paid for by the businessmen. On one trip he traveled with Hamlet Peralta, a Harlem restaurateur who ran the Hudson River Cafe, a spot popular with uptown politicians and police.

Benjamin Brafman, Banks' attorney, has denied that his client has done anything wrong.

So far roughly a dozen current and former mostly high-ranking police officials have been named in the probe, and several of them have been placed on modified duty or stripped of their guns and badges.

Several of them have since retired from the force.

NYPD Inspector Michael Ameri, who was the head of the department's highways unit, was questioned by investigators in March, but was not a target of the probe, according to Police Commissioner Bill Bratton. Ameri took his own life in May, with a self-inflicted gunshot wound to the head.

HOW DID THIS INVOLVE DE BLASIO?

The sprawling federal probe evolved from an investigation into favor-trading between public officials and fundraisers and campaign contributors for the mayor.

Rechnitz and Reichberg both also have ties to the mayor.

Reichberg raised $35,000 for the Campaign for One New York, which was shut down in March shortly after a good government group accused the mayor of using it as a "shadow government" to conceal who had influence in his administration.

Rechnitz also contributed $4,950 to the mayor’s inaugural campaign in 2013, and gave $102,000 to de Blasio's effort to unseat Senate Republicans.

In addition to the search for police corruption, federal investigators are also combing through de Blasio's political fundraising activities for violations of election law.

A January 2016 letter from Risa Sugarman, the state Board of Elections' chief enforcement counsel, which was leaked to the Daily News in April, accused de Blasio and his team, including top aide Emma Wolfe, of purposely violating election law by routing donations to three upstate senate candidates by using county committees to avoid donation limits.

Sugarman said the violations were "willful and flagrant" and warranted "criminal prosecution."

De Blasio campaign lawyer Laurence Laufer sent a seven-page letter to Sugarman and Manhattan District Attorney Cyrus Vance Jr., who is investigating the issues raised in the letter, calling the leak a "highly prejudicial and perhaps politically-motivated act," according to a copy obtained by DNAinfo New York.

Laufer was not specific about who might have leaked the memo. Even so, DNAinfo exclusively reported that the FBI was already investigating de Blasio's fundraising before Sugarman notified the DA.

Several of Mayor Bill de Blasio's closest aides have been subpoenaed in the ongoing federal investigation of his campaign fundraising.

They include Emma Wolfe, the mayor's director of intergovernmental affairs, Ross Offinger, his top fundraiser, and officials at BerlinRosen, a consulting firm credited with helping secure de Blasio's mayoral victory.

Sources told DNAinfo that the federal probe has found the mayor's fundraising “has so many tentacles” that investigators are eyeing possible criminal conspiracy charges for those involved in any wrongdoing.

The feds “are not looking for one deadly sin,” a source familiar with the investigation said. “[They are looking] at this as a potential corrupt organization, that the fundraising mechanism is corrupt.”

Real estate developer Don Peebles exclusively told DNAinfo that de Blasio personally asked him to contribute $20,000 to the Campaign for One New York, a nonprofit set up to advance the mayor's interests. The money was intended to be used to promote universal pre-K, which Peebles supported, but he still felt wary about contributing.

"It's hard for a business person who has business interests in New York City to tell the mayor no, especially real estate developers," Peebles said.

Also, DNAinfo reported exclusively that federal investigators are scrutinizing the mayor's 2013 campaign for possible straw donors. The donors are either reimbursed for their contributions or given cash to pass along to the campaign in order to skirt the city’s donation limits.

A spokesman for de Blasio's campaign said it would return more than $32,000 in contributions, after DNAinfo reported exclusively on several unusual donations.

In late April, the de Blasio administration hired two law firms to represent it amid the ongoing federal probe.

In early May, a lawyer for the Campaign for One New York said the nonprofit would not comply with a subpoena from the New York State Joint Commission on Public Ethics, saying it was "blatantly political." The state plans to go to court to compel the campaign to comply.

On Friday, March 24, the federal investigators interviewed the mayor regarding his relationship with Moishe Indig, a Williamsburg community board member and leader of the Aroni Satmar Hasidic sect, according to The New York Times.

Indig hosted a fund-raiser for the mayor in October 2013 between the primary and the general election, the paper reported. Attention has also been focused on how a vacate order was lifted on a violation-riddled yeshiva run by Indig on Chrismas Eve 2014, the same day the building was cited.

WHO ELSE WAS INVOLVED?
Peralta, who also has ties to Rechnitz and Reichberg, is accused of running a $12 million Ponzi scheme where he solicited investors for a fake wholesale liquor business and then used the money to compensate himself and other investors.

One of the people allegedly bilked by Peralta's scheme was Gerald Liebman, a prominent Uptown landlord who also contributed to de Blasio's campaign. Liebman lost $1.9 million in the scam, documents show.

Peralta's restaurant, the Hudson River Cafe, was a popular hangout for Uptown politicians and NYPD brass. When news of the probe surfaced, several elected officials scrambled to return money donated to them by Rechnitz, Reichberg and Peralta.

Peralta was arrested in Georgia on April 7 on one count of wire fraud. He was extradited and arraigned in New York on April 26, and later pleaded not guilty.

DNAinfo also uncovered several unusual donations made to the Campaign for One New York from workers at Primary One LLC, a Queens beauty supply company owned by Sm-Ali Amanollahi.

Several of those donations were made at a fundraiser hosted by Rud Morales, a fixture of the uptown nightlife scene who dates Amanollahi.

WHAT WAS THE FALLOUT?
Four NYPD officials and Reichberg were arrested June 20.

Deputy Inspector James Grant, the former commanding officer of the 19th and 66th precincts; Deputy Chief Michael Harrington, the former second-in-command in the housing bureau; Sgt. David Villanueva, who worked in the department's licensing division were arrested by federal agents.

So was Officer Richard Ochetal, who also worked in the NYPD gun licensing division. He was charged with accepting $3,371 from a Brooklyn businessman, Alex Lichtenstein, to approve a gun permit for one of his clients, according to the criminal complaint. In November, Lichtenstein pleaded guilty to bribing NYPD officials to obtain gun licenses and was expected be sentenced to 57-71 months in prison.

Earlier in June, Norman Seabrook, president of the Correction Officers' Benevolent Association, was arrested along with a hedge fund manager who allegedly bribed him.

Then-NYPD Commissioner Bill Bratton said in May he expected arrests within the NYPD to result from the probe.

Since then, five high-ranking police officials have tried to retire to protect their pensions, including one, Deputy Inspector James Grant, who was just one month shy of 20 years on the job. That would have earned him a higher and more protected pension.

It was not immediately clear if and when those arrests would occur.

In May, however, some officers were hit with disciplinary action.

Inspector Peter DeBlasio was the operations coordinator for the Brooklyn South patrol borough until he was placed on modified duty. He was questioned by the FBI but it wasn't immediately clear how he was connected to the probe.

Meanwhile, Det. Michael Milici, who pleaded the Fifth and refused to answer FBI questions before trying to retire from the force, was fired.

WHERE CAN I READ MORE ABOUT THIS?
Here is a reverse chronology of stories DNAinfo New York has published about the probe since it began:

Bill de Blasio to Be Grilled by Federal Prosecutors Amid Fundraising Probe (2/24/17)

De Blasio Questioned by Manhattan District Attorney Amid Fundraising Probe (1/25/17)

Shady de Blasio Fundraiser Asked City Hall for Hotel Rezoning Help: Sources (1/24/17)

City Council Passes Legislation to End Political Nonprofit 'Loophole' (12/16/16)

► De Blasio Fined $48K for Using Campaign Cash to Pay for Family's Makeup (12/16/16)

2 Grand Juries Probe Mayor's Fundraising, Report Says (12/16/16)

Public Wants 'Answers' After Months of Fundraising Probes, Says De Blasio (12/13/16)

I Don't Have a 'Shadow Government,' De Blasio Says (11/29/16)

Sixth 'Agent of the City' Revealed as Part of Mayor's 'Shadow Government' (11/28/16)

Read the Emails City Hall Released Related to the Mayor's Fundraising Probe (11/24/16)

Emails Show De Blasio's 'Agent of the City' Was Deeply Involved in Policy (11/24/16)

De Blasio Probes Could Cost Taxpayers $10M to Cover 2 Years of Legal Fees (11/23/16)

Brooklyn Businessman Pleads Guilty to Bribing Police for Gun Licenses (11/10/16)

City Investigating de Blasio Bundler Who Sits on Mayor's Fund Board (10/17/16)

De Blasio's Nonprofit Will Comply With Ethics Panel Subpoena (10/06/16)

NYPD Officer Who Shot Himself Was Wanted as 'Witness' in Corruption Probe (10/01/16)

Feds Probe De Blasio Fundraiser Whose Engineering Firm Won Big Contracts (9/21/16)

De Blasio's Nonprofit Ordered By Judge to Comply With State Subpoena (9/12/16)

Transparency With NYPD Records and My Emails Are Not the Same, Mayor Says (9/9/16)

Top City Lobbyist Found Many Ways to Give — Including Gracie Mansion Fixes (9/6/16)

De Blasio Defends Soliciting $20K Donation From Potential LICH Developer (8/1/16)

NYPD Bosses, Businessman and Union Leader Indicted By the Feds (7/8/16)

3 High-Ranking NYPD Officials Arrested in Corruption Probe, Sources Say (6/20/16)

'I Wish I Never Met' Donor at Center of Corruption Probe, De Blasio Says (6/8/16)

Correction Union Head Arrested on Fraud Charges in Federal Corruption Probe (6/8/16)

Bronx Restaurateur in NYPD Scandal Pleads Not Guilty to Wire Fraud (6/3/16)

De Blasio Says Public Not Concerned With Ongoing Investigations (6/2/16)

Two More Top NYPD Officials Retire Amid Cloud of Federal Probe: Sources (6/1/16)

De Blasio Campaign to Return $32,200 After DNAinfo Finds Shady Donations (5/30/16)

Third High-Ranking NYPD Official Files for Retirement Amid Corruption Probe (5/27/16)

De Blasio Does Favors For Developers Who Donate to Him, Voters Say (5/25/16)

Yet Another NYPD Official Retires Amid Federal Probe (5/25/16)

Top NYPD Official Embroiled in Federal Probe Files for Retirement (5/24/16)

De Blasio Poll Numbers Drop to Lowest Ever Amid Scandal (5/24/16)

De Blasio: Emails With 'Agents of the City' Should Be Hidden From Public (5/20/16)

Another High-Ranking NYPD Official Stripped of Gun and Badge Amid Fed Probe (5/18/16)

De Blasio Fundraiser Tied to Businessman Whose Staff Made Unusual Donations (5/16/16)

► Suicide of NYPD Inspector is 'Loss for the City,' Say Those Who Knew Him (5/16/16)

NYPD Inspector Commits Suicide Amid Corruption Probe (5/13/16)

De Blasio Advisers Easily Moved From City Hall to Mayor's Probed Nonprofit (5/12/16)

FBI Probed Mayor's Fundraising Before DA Got State's 'Criminal Referral' (5/9/16)

We Won't Comply With 'Blatantly Political' Subpoena, Mayor's Lawyer Says (5/7/16)

City Hall Official Got OK to Work Part Time for De Blasio Pal Under Probe (5/6/16)

► Federal Probe Eyes Possible Straw Donors to De Blasio Campaign, Sources Say (5/5/16)

De Blasio Asked Me for $20K And it Was Hard to Say No, Developer Says (5/4/16)

De Blasio Staff Subpoenaed in Ongoing Fundraising Probe (4/28/16)

► Harlem Restaurant at Center of Corruption Probe Was Popular With City Pols  (4/28/16)

De Blasio Gave Plum Administration Jobs to Nearly Two Dozen Fundraisers (4/27/16)

NYPD Detective Caught Up in Corruption Scandal Is Suspended, Officials Say (4/26/16)

Leaked Memo Calling My Fundraising Criminal Is Political Ploy: De Blasio (4/25/16)

NYPD Brass Get Ethics Refresher in Wake of Corruption Scandal (4/22/16)

De Blasio Denies Wrongdoing as Federal Fundraising Probes Widen (4/22/16)

Brooklyn Businessman Bribed NYPD Officials for Gun Permits, Feds Say (4/18/16)

DOI Commissioner Recuses Himself From FBI Probe of Mayor's Donors (4/15/16)

NYPD Deputy Chief Reassigned Amid Federal Corruption Probe (4/13/16)

Uptown Politicians Scramble to Return Donations in Midst of Federal Probe (4/13/16)

De Blasio Donor Lost $1.9M in Ponzi Scheme Linked to Corruption Probe (4/13/16)

NYPD Chief Received Up To $500K From Developer Eyed in Corruption Probe (4/11/16)

De Blasio Distances Himself From Businessmen in Federal Probe (4/10/16)

Bronx Restaurateur's Ponzi Scheme Linked to NYPD Corruption Probe: Source (4/8/16)

Top-Ranking NYPD Officers Stripped of Guns and Badges in Corruption Probe (4/7/16)

Mayor Says He'll Return Donations From Pal Who's Under Investigation (3/28/16)

► Mayor's Pal Investigated for Alleged Misuse of Money From City Contracts (3/28/16)

De Blasio's 'Dark Money' Nonprofit to Close, Officials Say (3/17/16)