NEW YORK (Reuters) - The union leader for New York City’s prison guards and a hedge fund financier were charged on Wednesday with orchestrating a bribery scheme involving union retirement and operating funds in a case stemming from a wide-ranging federal corruption probe.

Norman Seabrook, the union leader for New York City's prison guards, exits the Manhattan federal court house in New York, U.S., June 8, 2016. REUTERS/Brendan McDermid

The Federal Bureau of Investigation arrested Norman Seabrook, the president of the Correction Officers’ Benevolent Association, and Murray Huberfeld early on Wednesday.

According to a criminal complaint, Seabrook invested $20 million of union money in 2014 in New York-based Platinum Partners in exchange for kickbacks from Huberfeld, who worked at the firm. The men were charged with honest services fraud and conspiracy to commit fraud.

The case is the first major prosecution to emerge from several overlapping state and federal corruption probes examining New York City Mayor Bill de Blasio’s fundraising practices, among other avenues of inquiry.

It is also the latest high-profile public corruption case brought by the office of Preet Bharara, the U.S. attorney in Manhattan.

The investigations have proven to be a distraction for de Blasio, who will be up for re-election in 2017. He has repeatedly said that he and his administration have acted legally.

On Wednesday at a public appearance, de Blasio reiterated that he was “absolutely comfortable that we have done things properly. What Norman Seabrook did with his pension fund has nothing to do with how we run our government day to day.”

In April, Reuters reported that Seabrook had invested union funds in Platinum, a mid-sized firm with a history of buying into controversial businesses.

Representatives for Platinum Partners did not respond to a request for comment.

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Seabrook was released on a $250,000 bond package after an appearance in federal court in Manhattan. Huberfeld was released on a $1 million bond package.

“The charges are not strong,” Seabrook’s defense lawyer Paul Shechtman said during a court hearing.

The criminal complaint referred to a “cooperating witness” who has pleaded guilty and is helping the government. According to prosecutors, the witness initially referred Seabrook to Huberfeld and Platinum and helped arrange the bribery scheme.

A person familiar with the matter previously told Reuters that Jona Rechnitz, a New York real estate investor, introduced Seabrook to Platinum.

Rechnitz’s lawyer, Alan Levine, declined to comment on Wednesday.

Rechnitz, who has contributed more than $150,000 to efforts supported by the mayor, is at the heart of an ongoing probe into de Blasio’s fundraising activities and also police corruption.

Investigators have focused on Rechnitz and another businessman, Jeremy Reichberg, and whether they gave police officers gifts and trips in exchange for official favors. Several high-ranking officers have been reassigned or disciplined as a result of the probe.

Rechnitz and Reichberg had ties to de Blasio when he ran for mayor in 2013, serving on his inaugural committee.

MORE TO COME?

The complaint indicated that the cooperating witness was still giving information to government investigators.

The witness met Seabrook through a police officer in 2013, according to the complaint. He also knew Huberfeld, who had an office at Platinum, the complaint said.

According to the witness, Huberfeld was secretly running Platinum, but his role was not publicly acknowledged because of “a prior lawsuit or investigation relating to a fund Huberfeld previously ran,” the complaint said.

Platinum founder Mark Nordlicht could not be reached for comment on Wednesday.

According to the complaint, the witness, Seabrook, a police officer and others took two trips in 2013 to the Dominican Republic. Seabrook complained to the witness that he worked hard to invest the union’s money but made none for himself, the complaint said.

He told the witness it was time “Norman Seabrook got paid,” according to the complaint.

Authorities said the witness helped orchestrate a fraud scheme in which Huberfeld promised to return half of Platinum’s 20 percent commission to Seabrook as a kickback.

According to the complaint, on Dec. 11, 2014, the witness bought an $820 Salvatore Ferragamo bag, filled it with $60,000 in cash and handed it to Seabrook as the first of what was intended to be several kickbacks.