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By Matthew Russell Lee, Patreon Thread Letter
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SDNY COURTHOUSE, August 2 – When government cooperator Jona Rechnitz came up for sentencing for defrauding among others the NYC Correction Officers' annuity fund on December 19, 2019 before U.S. District Court for the Southern District of New York Judge Alvin K. Hellerstein, Assistant US Attorney Martin Bell urged leniency.  

Bell said that so that Rechnitz can continue to pay restitution, he should remain free in order to keep selling jewelry to the Kardashians.  

  In February 2020 Rechnitz was sued in California for fraud. Inner City Press published the complaint on Scribd here, and for download on Patreon here.

 Now on August 3, 2021 Judge Hellerstein held another proceeding on Rechnitz, expressed his concern at having been "conned" about Rechnitz' resources, with a letter about diamonds and a Bugatti cited but not public, having been submitted under seal - by the prosecutors. Inner City Press may have more on that - for now, the August 3 thread is here: (and podcast here)

Briber/cooperator Jonah Rechnitz had been ordered to pay restitution to COBA of $500,000 a year. But then he whipped out $7 million in diamond. So today,  @SDNYLIVE  Judge is moving toward ordering him to pay $7 million, then $250,000 a quarter.

Judge Hellerstein: Mr. Rechnitz pays $17,000 a month in rent... How does he have a Bugatti? It's very dis-spiriting. He told me he would be a different person. But it seems he's the same. He conned me.

Judge Hellerstein: I've had to rethink these criteria, and come up with a solution that gives a chunk of money to COBA presently, has an adequate installment period beyond that, and perhaps gives discovery rights to COBA. [Lawyer tries to cut in]

 Defense lawyer Noam Biale: The US made a sealed filing about the diamonds & the Bugatti, refer back to that.

[Inner City Press: Why sealed? By the US?]

Judge Hellerstein: If I give it to you, I'll have to give to [COBA].

Defense: Let me take that up with AUSA.

 Defense: Let me take that up with AUSA Pomerantz. Mr. Rechnitz cannot afford the payment schedule your Honor previously imposed. We'll write to your honor.

 [So now has Inner City Press - see DocumentCloud here.]

  Back on August 7, 2020 the Correction Officers' Benevolent Association COBA submitted a motion for $14.01 million of restitution from the Crime Victims Rights Act.

 On January 4, 2021 COBO has written to Judge Hellerstein citing information from a California bankruptcy proceeding, quoting the Trustee that Jadelle Jewerly's Wells Fargo account between 2018 and October 2020 "sent wire transfers of $2,329,500 to accounts held a Signature Bank in the names of Jona Rechnitz and JSR Capital LLC." COBO is asking for subpoena power, or the $14.01 million. Watch this site.

The California complaint recites: "On or about January 24, 2019, the Jadelle Entities, which are owned by Jona and Rachel, borrowed money from Plaintiff pursuant to a written agreement. The terms of the written agreement were memorialized in a Debt Acknowledgment, Promissory Note and Security Agreement (“Debt Agreement”) dated March 2019. A true and correct copy of the Debt Agreement is attached hereto and incorporated herein as Exhibit “A”. 15. The original principal amount in the Debt Agreement is $2,850,000 at 9% interest per month, however, the total debt owed by Defendants later increased to $5,800,000. The maturity dates are reflected in the Debt Agreement. 16. Pursuant to the Debt Agreement, the loans were secured by jewelry delivered to Franco and a 2012 Bugatti. Jona delivered the Bugati and the jewelry to Franco as security/collateral for the loan.

17. After a series of further advance transactions, the debt on the loan grew to $5,800,000. 18. The Bugati was liquidated and the funds were credited against principal for a total credit of $400,000. 19. As background on Jona Rechnitz, a sealed information was filed against him in the Southern District of New York on June 6, 2016 for wire fraud. A copy of the information is attached hereto as Exhibit “B”. 20. Jona entered a guilty plea on June 6, 2016. 21. On March 15, 2017, the information against Jona was unsealed. On March 15, 2017, Jona was released on bond pursuant to release conditions imposed by Judge Alvin K. Hellerstein. 22. On December 6, 2019, Jona was sentenced to 10 months of custody. He was granted release pending appeal. 23. The government in its sentencing memorandum indicated that “Rechnitz was in a position to cooperate regarding a broad range of subject matters in part because, for several years beginning when he was 26 years old in 2008, Rechnitz rode a wave of unbridled ambition and a seemingly limitless sense of entitlement through a series of misdeeds. Rechnitz had been a brazen criminal, and the seriousness of his crimes of conviction cannot, and should not, be minimized.” 24. Yet, apparently misunderstanding his role as a “one of the single most important and prolific white collar cooperating witnesses in the recent history of the Southern District of New York” according to the government, Jona mistakenly believes that this provides him immunity from committing fraud in California. 25. No sooner than within weeks of being sentenced in the Southern District of New York, Jona swindled Franco in a large scale fraud totaling $5,800,000. On information and belief, Jona and Rachel have defrauded other diamond dealers in Southern California and as those victims authorize the release of their names, the complaint will be amended to recover their stolen goods as well. 

 26. At the time of the fraud, Jona Rechnitz was and still is a convicted felon from the Southern District of New York. He is presently out on bond for a wire fraud conviction where he was granted bail pending appeal. He is married to Rachel Rechnitz and they have six children together. 27. They both now reside in a rental home in the Beverlywood area in the City of Los Angeles. 28. Jona and Rachel operate a jewelry business through two similarly named entities, defendants Jadelle Inc. and Jadelle Jewelry and Diamonds, LLC, herein the Jadelle Entities, whose marque client is the Kardashian family. Each of their clients will be added to this action as the facts unfold showing the stolen collateral was sold to retail customers of Jona and Rachel. 29. The Debt Agreement between the parties was simple. Jona tendered over $7,000,000 worth of diamonds to Plaintiff to be held as a collateral against a loan which totaled $5,800,000. 30. In late December of 2019, AFTER, Jona was sentenced, Jona indicated to Franco that he was going to get a credit line and asked for the release of the diamond collateral in exchange for payment in full. This representation by Jona was false when made. Jona knew the representation was false when made. Jona made this representation with the intention of causing Franco to rely on it. Franco relied on this representation to his detriment. 31. Jona persuaded Franco and Franco’s brother to deliver the collateral to Jona and Rachel’s office at 9454 Wilshire Blvd. in Beverly Hills. Jona exchanged two checks payable to Franco in exchange for the diamond collateral dated January 14, 2020 and January 16, 2020 in the amounts of $2,500,000 and $1,300,000, respectively. True and correct copies of said checks are attached hereto as Exhibit “C.” At the time Jona issued the checks to Franco he had no intention of honoring the checks. Franco relied on Jona issuing and intending to honor the checks by releasing the diamond collateral. 32. Plaintiff and Plaintiff’s brother complied by exchanging the diamond collateral and Jona tendered two checks attached hereto as Exhibit “C”. The checks, however, were NSF at the time of tender. Jona has repeatedly lied, lulled, and attempted to fabricate one excuse after another to delay paying Plaintiff. 

  33. Based upon information and belief, Prado, acting in concert with Jona and Rachel, and to further their scheme, had his girlfriend or another representative at Wells Fargo Bank issue a stop payment on the checks, attached hereto as Exhibit “C”, that Franco was going to deposit. 34. Jona falsely enlisted attorneys to pretend payment on the loan was coming from family members to buy himself more time. A number of these family members had written letters to the Court for Jona’s sentencing. 35. In reality, Jona liquidated Plaintiff’s diamond collateral and spent Plaintiff’s money, but refuses to tell Plaintiff how he liquidated the collateral or how he spent the loan proceeds. 36. It is apparent that Jona is continuing his criminal conduct in California after being convicted in New York. 37. Upon realizing he had been swindled and defrauded, Franco immediately filed a police report with the Beverly Hills Police. 38. Repeated demands have been made to Jona to return the diamond collateral. Jona, who wants to conceal his criminal conduct from the sentencing judge in New York and the federal prosecutors who vouched for him, as well as U.S. Probation, took numerous steps to lull the victim, Franco, to buy more time. 39. On January 16, 2020, with the assistance of a local Beverly Hills attorney, Jona drafted more documents and an additional check, attached hereto as Exhibit “D” and Exhibit “E”, to further stop Franco from disclosing and revealing that Jona’s fraudulent conduct has only grown in scope and size and that he has learned nothing from his life of crime which spanned from 2011 to 2015, which then halted while he was cooperating from 2016 to 2018. 40. The fact that Jona only received 10 months custody time with 5 months house arrest has only emboldened him to commit more fraud, grand theft, and to issue worthless instruments." We'll have more on this.

  Back in December 2019, Rechnitz mentioned that he had raised major funds for the Mayor of New York City, but it went to his head.  

  Rechnitz' lawyer Alan Levine questioned why older men like Norman Seabrook and Murray Huberfeld would have used the younger Rechnitz as a "bag man." Background from Inner City Press previous stories on Seabrook here, and Huberfeld here.   

  Judge Hellerstein took a ten minute break. When he returned, as live tweeted by Inner City Press, he said "The concept of the just punishment is impossible to achieve. Nonetheless. I have to punish. I gave Mr. Seabrook 58 months. I gave Mr. Huberfeld 30 months. I think the just punishment here is ten months."  

  But that was not the end, rather a form of new beginning. Rechnitz' lawyer Levine first said his client would only have to spend five months incarcerated - then tried to put the number at one month. He asked for Lompoc or Taft by Los Angeles, if it it still open, he said.

  More on Patreon here.

    While AUSA Bell cited the time service sentence for UN briber Francis Lorenzo, also subject to an over-the-top 5K1 letter from the US Attorney, no one mentioned for example cooperated Daniel Hernandez a/k/a Tekashi 6ix9ine, given 24 months by Judge Engelmayer just the day before. Nor the much harsher sentence given out to other defendants in the SDNY. We'll have more on this case. This case is US v. Rechnitz, 16-cr-389 (Hellerstein)  

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