Bribery Case Casts a Shadow Over Eric Adams’s Public Safety Chief

His voice was recorded on federal wiretaps. His luxury overseas trips were scrutinized. His massages, golf outings and steak dinners were carefully cataloged.

In the end, U.S. prosecutors documented a range of questionable behavior by Philip Banks III: As a top New York City police official, he accepted paid vacations to the Dominican Republic and Los Angeles, sushi platters, cigars — even a ring worn by Muhammad Ali — from two businessmen who sought power through connections to New York City leaders.

The conduct, detailed by federal investigators, revealed a willingness by Mr. Banks to embrace favor seekers while occupying a powerful government position. It also led prosecutors to label him an unindicted co-conspirator in an expansive corruption scheme that reached Mayor Bill de Blasio and led to prison time for Mr. Banks’s close friend Norman Seabrook, the leader of the city’s correction officers’ union, among others.

Now, seven years later, Mr. Banks has become the top criminal justice official at City Hall, appointed this month by Mayor Eric Adams to oversee Mr. Adams’s highest priority, public safety.

A review of the two-year investigation that ensnared Mr. Banks, drawing on internal F.B.I. reports obtained by The New York Times, court records and interviews, provides a close look at the former senior police leader, a Black officer from Queens who worked hard to reach the summit of a vast bureaucracy run by white men, but who skirted ethics rules and tax laws over the years while pursuing perks and extra income.

Mr. Banks also did not always follow a city law intended to prevent conflicts of interest, The Times has found. During his tenure as the Police Department’s highest ranking uniformed official, records show, he claimed falsely that he had not accepted valuable gifts and he failed to disclose his investment property and rental income — facts that have not been previously reported.

Despite that record of receiving gifts, federal prosecutors did not charge Mr. Banks because they did not have enough evidence to prove that he took official action in return, according to two people involved with the investigation.

He has since had the unstinting support of Mr. Adams, a former police captain who campaigned on reducing crime. Under pressure after a string of incidents that included the fatal shooting of two police officers and an 11-month-old girl being hit in the face by gunfire, Mr. Adams on Monday announced a plan to stem gun violence, an initiative in which he said Mr. Banks would have a central role.

The urgency of the crime issue only raises the stakes for the new deputy mayor, who now must shepherd a plan that relies on cooperation with more than a dozen federal and state law enforcement agencies, including several that investigated him — and might have qualms about working with him. Among the agencies that scrutinized Mr. Banks’s dealings was the Manhattan district attorney’s office, something that has not previously been reported.

Mr. Banks has already tried to assuage concerns about his past. In a New York Daily News column this month, he wrote that he had neither betrayed the public’s trust nor broken the law. However, he did not address his accepting expensive gifts from the two businessmen, Jona Rechnitz and Jeremy Reichberg, who hoped to gain clout by currying favor with officials around the city, and who were convicted in the federal inquiry.

Mr. Banks also did not address the determination by prosecutors that he was an unindicted co-conspirator in the same criminal scheme as Mr. Rechnitz and others, or that he had said in 2018 that he would assert his Fifth Amendment right against self-incrimination if called to testify at a trial stemming from the inquiry.

He apologized only for associating with Mr. Rechnitz and Mr. Reichberg. “I realize now that even the appearance of our friendship was damaging to my profession,” he wrote.

Some government watchdogs say Mr. Banks’s past behavior raises questions about how he will conduct himself now that he has attained a position even more powerful than the one he held previously. Richard Aborn, who leads the Citizens Crime Commission of New York City, a nonprofit that studies crime reduction strategies, praised Mr. Banks’s experience but said the federal inquiry could cast a shadow.

“It’s something I think he is going to have to constantly confront,” Mr. Aborn said.

Mr. Banks and Mr. Adams declined to be interviewed. A City Hall spokesman, Maxwell Young, said in a statement that the accusations raised in the investigation “have been litigated and re-litigated with no findings of wrongdoing.”

Mr. Young acknowledged that Mr. Banks had reported incorrectly on city financial disclosure forms that he did not receive the vacations, meals and other gifts or own investment property, and that he had failed to disclose rental income. But Mr. Young described the false claims and omissions as honest mistakes, saying Mr. Banks had misunderstood questions on the form. An intentional violation of the city’s annual disclosure law is a misdemeanor punishable by up to a year in jail, a $1,000 fine or both, and a $10,000 civil penalty.

“In no way and at no point did he intend to answer any of the questions incorrectly,” Mr. Young said.

Raised in Cambria Heights, Queens, Mr. Banks joined the Police Department in 1986, following his father, Philip Banks Jr., who later retired as a lieutenant. The younger Mr. Banks began in the 81st Precinct in Brooklyn and rose to deputy chief in 2010. He also belonged to the Grand Council of Guardians, a fraternal group of Black officers that Mr. Adams once led.

In 1999, Mr. Banks and three high-ranking colleagues started a business that charged junior officers for help preparing for Police Department promotional exams. Mr. Banks disclosed earning more than $250,000 from that business in 2011, which was reported earlier by WNYC.

Mr. Banks caught the F.B.I.’s attention during an investigation that began with a Harlem restaurateur who was suspected of running an illegal liquor distribution business.

The inquiry expanded to encompass the mayor, the correction union leader, police officials and officers in the Police Department’s pistol-licensing unit. At its center were Mr. Rechnitz, the scion of a wealthy California family, and Mr. Reichberg, an Orthodox Jewish community activist in Brooklyn’s Borough Park neighborhood. The two lavished campaign donations and gifts on officials, including Mr. Banks.

Those who pleaded guilty or were convicted at trial included his deputy, Michael Harrington, Mr. Rechnitz, Mr. Reichberg, Mr. Seabrook and the restaurateur, Hamlet Peralta. (Prosecutors did not charge Mr. de Blasio, but they issued a rare statement saying he had solicited campaign donations from a number of people seeking favors and had then made inquiries to city agencies on their behalf.)

Mr. Banks, 59, now has broad authority over the city’s criminal justice agencies. Among his first acts was firing a deputy commissioner in the Police Department’s Internal Affairs Bureau who helped oversee the officers working with the F.B.I. on the investigation involving him.

Some of those who were convicted as a result of that inquiry said they continue to think highly of Mr. Banks.

“If the guy is trying to do the right thing, let him do the right thing,” said Mr. Peralta, who pleaded guilty to running a Ponzi scheme and was released from prison in 2020. “People get over things. People make mistakes.”

Fast Friends

Mr. Banks was chief of community affairs when he met Mr. Rechnitz, at the time a 30-year-old investor and developer who was prone to exaggerating his success, and Mr. Reichberg, 38, who dabbled in real estate, diamonds and other ventures and sought to be a community power broker.

The men, who were introduced to the chief by Mr. Harrington, had befriended other police officials while seeking favors, like police escorts, to impress associates.

This account of their relationship with Mr. Banks is based on summaries of F.B.I. interviews of Mr. Rechnitz and others, trial testimony, court records and interviews with people who are familiar with the events. Mr. Rechnitz, who declined to discuss the investigation, cooperated with the authorities in exchange for leniency. Mr. de Blasio and others have called him a liar.

After Mr. Banks was promoted in March 2013 to chief of department, Mr. Rechnitz testified, he and Mr. Reichberg “were all over him.”

“I wanted to become close to him, and I wanted him to rely on me,” Mr. Rechnitz said. “And the more it got well known in the department, the more power Jeremy and I would have within the Police Department when we would ask other cops for favors.”

They brought Mr. Banks sushi and other meals in frequent visits to his office, getting access to a secure garage, parking in the chief’s space and taking a private elevator reserved for senior officials.

Mr. Banks and Mr. Rechnitz spoke by phone several times a week, played backgammon and socialized with Mr. Harrington and other police officials. They sipped wine and ate $500 meals on Mr. Rechnitz’s tab at high-end kosher steakhouses, Mr. Rechnitz said. He gave Mr. Banks thousands of dollars in tickets to sports events and the ring owned by Muhammad Ali, whom Mr. Rechnitz knew the chief admired, according to his and others’ testimony. Mr. Banks accepted them despite department rules against doing so.

He introduced Mr. Rechnitz to Mr. Seabrook, the flamboyant leader of the Correction Officers’ Benevolent Association. Mr. Rechnitz gave Mr. Seabrook Ferragamo shoes and fancy cigars and helped arrange a deal that led to Mr. Seabrook’s bribery conviction: Mr. Rechnitz handed the union leader $60,000 in cash in exchange for investing $20 million of union money in a hedge fund.

Mr. Rechnitz told the F.B.I. that he eventually came to view Mr. Seabrook as a “moocher.” But Mr. Seabrook was part of Mr. Banks’s tight-knit circle, and he came along when they got together. The chief could be sensitive about his associations. When his secretary once asked about Mr. Reichberg and Mr. Rechnitz, Mr. Banks cursed at her, she testified.

“He is the chief of the department, and I’m not to question him,” the secretary, Detective Marilyn Ozuna, recalled Mr. Banks saying. “And that literally just brought me to tears, because all I asked was, ‘Who were they?’”

Travel companions

Learning from Mr. Seabrook that Mr. Banks was feeling burned out in late 2013, Mr. Rechnitz invited the chief for a getaway in November to Punta Cana in the Dominican Republic. Mr. Seabrook and Mr. Reichberg joined them.

They went back in December, with Mr. Rechnitz chartering a plane and bringing Mr. Peralta, the restaurateur. Mr. Rechnitz had been investing clients’ money with Mr. Peralta, whom he had met through a police contact, in transactions that would ultimately point the F.B.I. toward city officials.

The two Punta Cana trips blur in Mr. Rechnitz’s accounts, but he said he paid for the flights, rounds of golf, a resort villa and prostitutes for Mr. Banks and the others. Mr. Rechnitz told the F.B.I. that he and Mr. Banks had joked during the trip, nicknaming the prostitute Mr. Seabrook had been with “Stinky.” The City Hall spokesman said Mr. Banks denies involvement with prostitutes “in the strongest possible terms” and says he never saw Mr. Seabrook or anyone else with one.

Punta Cana was just the beginning of their travels.

In March 2014, Mr. Banks visited Israel with Mr. Rechnitz, Mr. Reichberg and Mr. Seabrook.

He bought his own plane ticket, Mr. Rechnitz testified. But Mr. Rechnitz upgraded Mr. Banks to first class, falsely telling him he had used points to do so.

Mr. Rechnitz spent nearly $27,000 on the rest of their five-day trip. He covered the group’s hotel stay, helicopter rides, a Mediterranean yacht cruise, and a trip to Masada, an ancient desert fortress. He bought Mr. Banks a backgammon set at Jerusalem’s Arab market. (In thanks for the trip, Mr. Banks and Mr. Seabrook later purchased Mr. Rechnitz his own backgammon set, Mr. Rechnitz testified.)

That summer Mr. Rechnitz paid for Mr. Banks and Mr. Seabrook to fly to Los Angeles and stay at the Montage hotel in Beverly Hills. He rented them a Porsche, hired them a golf instructor and paid for them to get foot massages. He said he also flew them to Las Vegas for a night of gambling and back.

For 2013 and 2014, the years when Mr. Banks ate, drank and traveled on Mr. Rechnitz’s tab, Mr. Banks reported to the city’s Conflict of Interest Board that he had not accepted gifts totaling more than $1,000 a year from a single source, his disclosures show.

Passed over

In fall 2013, Mr. Banks was at the top of the department and wanted to climb higher. Then he learned that Commissioner Raymond W. Kelly was departing.

Mr. Rechnitz, who had given political donations to Mr. de Blasio, crafted emails to the mayor with Mr. Banks’s help. “If Chief Banks were offered the position of Police Commissioner, he would accept it,” Mr. Rechnitz wrote to Mr. de Blasio that November. “As you know we believe he is the right fit for the job.”

Mr. de Blasio instead chose William J. Bratton as commissioner. “Will be good for the city, and for banks. You’ll see,” the mayor wrote in an email to Mr. Rechnitz.

With the top police job off the table, Mr. Banks turned to Mr. Rechnitz in hopes of making some money. They discussed investments in World Cup soccer tickets, Super Bowl box seats, jewelry and real estate, according to F.B.I. interview notes from Mr. Rechnitz and Mr. Harrington. Mr. Rechnitz has said he also opened a sports betting account for Mr. Banks, placed wagers for him with bookies and delivered the winnings in cash.

Records show that the chief sent Mr. Rechnitz $250,000 to manage in 2014. Mr. Rechnitz would later return Mr. Banks’s money plus $25,000 — half in cash — even though he had never invested it, he testified. It is unclear whether he explained the source of the additional money to Mr. Banks, who has said he thought Mr. Rechnitz was a legitimate businessman.

The chief had wired money to Mr. Rechnitz’s corporate entity, JSR Capital LLC — the same one the businessman used to pay Mr. Peralta.

Federal investigators believed — incorrectly — that Mr. Banks was involved in a money-laundering conspiracy. Agents had seen his payments to Mr. Rechnitz and had reviewed surveillance images of Mr. Banks depositing and withdrawing small increments of cash into and from his accounts. The unexplained transactions totaled $300,000 over seven years, according to an F.B.I. agent’s affidavit seeking a wiretap.

Federal prosecutors alerted the Internal Revenue Service, which began investigating the cash transactions and $245,000 in rental income from two Queens properties that had not been declared on tax returns, according to an F.B.I. affidavit.

In fall 2014, Mr. Bratton offered Mr. Banks a promotion to first deputy commissioner. But on Oct. 31, Mr. Banks retired. The day before, a judge had approved an F.B.I. wiretap application that named him as a target. Mr. Banks has said he left because he and Mr. Bratton did not agree on the new job’s parameters.

Mr. Rechnitz and Mr. Reichberg felt betrayed. They believed they had invested a lot in the chief with little in return — but not nothing. Mr. Banks had let Mr. Rechnitz store diamonds in his office safe, and had given him a police union “gold card” and a plaque. “At least you got a plaque out of it,” Mr. Reichberg later complained to Mr. Rechnitz, according to an F.B.I. wiretap report. “I didn’t even get a plaque.”

The closest Mr. Banks took to an official action on the men’s behalf, the two people involved with the investigation said, was promoting James Grant, another officer whom Mr. Rechnitz and Mr. Reichberg had befriended and who was later acquitted of bribery charges, to deputy inspector. “I took care of your boy,” Mr. Banks said, according to Mr. Rechnitz. The people involved with the investigation spoke on condition of anonymity because they were not authorized to discuss it.

Years later, Mr. Banks would deny that he had traded favors for compensation. He would explain that the rental income he did not declare — and for which the I.R.S. took no action against him — had been offset by expenses, and he would say he had never made unexplained cash deposits.

But immediately after leaving the Police Department, Mr. Banks was worried. The I.R.S. had subpoenaed his tax preparer, and, in a February 2015 call recorded by the F.B.I., Mr. Banks told Mr. Reichberg he was afraid the investigation would make things difficult going forward.

“If it doesn’t embarrass me,” Mr. Banks said, “it could stop me from getting another job for a while.”

Susan C. Beachy contributed research.