With a jury deadlocked, a federal judge declared a mistrial Friday in the case of a city councilman accused of misdirecting hundreds of thousands of dollars in taxpayer money meant for community projects to benefit his friends and family.

U.S. District Judge Robert Patterson ended deliberations after jurors sent him the latest of several notes saying they couldn't unanimously decide on the guilt or innocence of Larry Seabrook, a 60-year-old Bronx Democrat. They had been deliberating since Dec. 1 in federal court in Manhattan.

"We the jury have continued to deliberate," the note said. "However, we remain deadlocked on all counts and it appears we will remain deadlocked."

U.S. Attorney Preet Bharara immediately announced his office would retry the case

Despite the hung jury, prosecutors still expect to "prove beyond a reasonable doubt that the Councilman criminally exploited his official position in order to enrich his friends, his family, and himself," Bharara said in a statement. "Public corruption erodes the public's confidence in its elected officials, and it degrades our democracy."

Seabrook was smiling as he left the courthouse, telling reporters, "I'll continue to keep the faith."

The councilman, who previously served as both a state assemblyman and senator, had vigorously denied the charges. His lawyers touted his track record of helping needy constituents in his Bronx district, and they accused prosecutors of building their case on flimsy evidence.

The case stemmed from an investigation into a possible misuse of discretionary funds that the City Council sets aside for its members to use on community projects of their choice. Federal authorities said that from 2002 through 2009, Seabrook created a slush fund by directing more than $2 million of the funds to nonprofit organizations that he controlled but that weren't doing legitimate work.

The councilman paid more than more than $500,000 in salary and consulting fees over the seven-year span to his girlfriend, his brother, two sisters and his nephews, among others, prosecutors said. The girlfriend took a salary even though she was unqualified to run a nonprofit, they said.

The government said that the girlfriend, Gloria Jones-Grant, and family members gave Seabrook thousands of dollars in kickbacks. The councilman also was charged with soliciting $40,000 more in gratuities from a Bronx businessman as a reward for helping him win a contract to install boilers at the new Yankee Stadium.

Testifying under subpoena, Jones-Grant described her relationship with Seabrook as "intimate" and acknowledged giving money to him. But she also claimed that she couldn't remember how much she gave him and that, whatever the amount, it was repayment for a loan.

The businessman's testimony also was murky: He said he believed that he was donating to a political club that supported Seabrook and that it wasn't part of a "quid pro quo" arrangement.

"There's no evidence to connect the dots," defense attorney Edward Wilford said during closing arguments. "There's only speculation to support the government's theory."

Prosecutors presented records they said showed Seabrook used the political club to launder the money for personal use. The government's evidence include a receipt the councilman submitted for reimbursement that had been doctored to inflate the cost of a bagel sandwich and a Snapple to $177.

"He took all that dirty money and tried to make it look clean," Assistant U.S. Attorney Brent Wible said in his closing.

Wible also labeled Jones-Grant the defendant's "willing partner in crime."

Jurors informed the judge in previous notes sent Thursday and Friday morning that they were deadlocked, but he urged them to keep trying.