By Michael Phillips | NYBayNews
A quietly unfolding legal battle in Brooklyn Supreme Court is fast becoming a troubling test of public confidence in New York’s justice system. At the center of the controversy: a former Democratic power broker, missing escrow funds totaling $2 million, and an unusual string of judicial recusals that has stalled accountability and fueled concerns about insider influence.
According to court filings and reporting by the New York Post and independent outlet Hellgate NYC, international investors claim that $2 million they wired into a Brooklyn attorney’s escrow account has vanished. As the case drags on, at least four judges have stepped aside, forcing repeated reassignments and delaying key rulings—an extraordinary development in a case with no jury trial and relatively straightforward discovery disputes.
Missing Escrow Funds, Mounting Questions
The dispute stems from a failed real estate-related venture involving Swiss investor Angelos Metaxas and New Zealand-based Pertshire Investments LP. In 2024, the investors wired $2 million into an escrow account held by Brooklyn attorney Mark David Graubard. The funds were meant to demonstrate financial capacity for a proposed partnership with Brooklyn businessman Sam Sprei, who has documented ties to longtime Democratic Party fixture Frank Seddio.
When the deal collapsed, the investors sought return of their money. They allege Graubard repeatedly stalled, failed to provide proof the funds remained intact, and ignored court orders to produce bank records. Despite mounting pressure from the bench, those records have still not been produced.
Graubard now faces potential contempt sanctions—or even an arrest warrant—if noncompliance continues.
The Seddio Factor
Frank Seddio, the former Brooklyn Democratic Party chairman who held the post from 2012 to 2020, is not accused of personally holding the escrow funds. However, his involvement has intensified scrutiny. Seddio filed a lawsuit on behalf of a third party seeking a temporary restraining order that, for a time, blocked investors from recovering their money or reporting the matter to authorities.
Seddio has denied deep involvement, telling the Post, “I have nothing to do with this case.” Still, investors and their attorneys argue that his presence—and his long history of influence in Brooklyn’s judicial selection process—has complicated proceedings in ways that would not apply to ordinary litigants.
An Unusual Wave of Judicial Recusals
Perhaps the most alarming aspect of the case is the judicial churn.
At least four Brooklyn judges have recused themselves. Two stepped aside in mid-December alone. Judge Richard Montelione withdrew after Seddio hired an attorney who was simultaneously representing Montelione in an unrelated lawsuit challenging New York’s judicial retirement age law. Judge Richard Velasquez recused himself without publicly stating a reason.
The case is now before a fifth judge, Francois Rivera.
While recusals are sometimes necessary to preserve impartiality, repeated withdrawals in a single civil matter raise legitimate concerns—particularly when prior judges appeared close to ordering sanctions or compelling production of key financial records.
A Broader Pattern of One-Party Risk
Critics argue the case illustrates a structural weakness in one-party political environments. For decades, Brooklyn’s Democratic machine has wielded outsized influence over judicial nominations. Seddio himself has previously boasted of playing a role in selecting dozens of judges.
Reform groups such as New Kings Democrats have long warned that such systems—opaque, insular, and resistant to scrutiny—can create the appearance, if not the reality, of favoritism. Even without proof of wrongdoing, the perception alone undermines trust in the courts.
From a center-right perspective, the issue transcends partisan labels. It is about whether the rule of law applies equally to insiders and outsiders alike.
Due Process Matters—So Does Transparency
It bears emphasizing that no criminal charges have been filed. All parties deny wrongdoing. Due process must be respected, and allegations should not substitute for evidence.
But due process cuts both ways. Court orders must be followed. Escrow accounts must be transparent. And justice delayed—especially through procedural maneuvering—can quickly become justice denied.
The parallel federal lawsuit filed by the investors, alleging fraud and obstruction, adds another layer of seriousness. Yet it, too, has received little mainstream attention.
Why This Case Deserves Sunlight
So far, coverage has been limited largely to the New York Post and Hellgate NYC. Major outlets have stayed silent. That absence is striking, given what is at stake: judicial credibility, investor confidence, and public faith in a court system meant to operate above politics.
New York does not need to presume guilt to demand accountability. It does need transparency, timely rulings, and a judiciary clearly insulated from political entanglements—past or present.
As the case proceeds under a new judge, the public should watch closely. The outcome will say much about whether Brooklyn’s courts are governed by law—or still shadowed by the legacy of political power.
New York Bay News 
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