Feds: Pension exec moved $2B for coke, hookers, other bribes
ASSOCIATED PRESS
United States District Attorney Preet Bharara announced charges, Wednesday, in New York, against Navnoor Kang, a former portfolio manager at the New York State Common Retirement Fund, and two broker-dealers, Deborah Kelley and Gregg Schonhorn, for participating in a “pay-for-play” scheme.
NEW YORK >> A former top official at the country’s third-largest pension fund and two broker-dealers were charged Wednesday in what a federal prosecutor described as a classic bribery scheme that steered $2 billion in trades in exchange for drugs, prostitutes, vacations and U.S. Open tennis tickets.
“The hard-earned pension savings of New Yorkers should never serve as a vehicle for corrupt, personal enrichment,” Manhattan U.S. Attorney Preet Bharara said in a statement, calling the alleged pay-for-play arrangement a “classic, quid-pro-quo bribery scheme.”
Navnoor Kang, the ex-head of the $184 billion New York State Common Retirement Fund’s fixed income trades, received more than $100,000 worth of bribes in the form of trips, gifts, luxury hotel stays and other payoffs from broker-dealers Deborah Kelley and Gregg Schonhorn, prosecutors said.
Kang, 38, was arrested in Portland, Oregon, on securities fraud, honest service wire fraud, conspiracy and obstruction of justice charges.
His attorney, Lauren DeSantis-Then, said her client denies all the charges.
“Mr. Kang is not guilty and we look forward to our day in court,” she said.
Kelley, 58, of Piedmont, California, was expected to surrender, authorities said. Her attorney didn’t immediately return a request for comment.
Schonhorn, 45, of Short Hills, New Jersey, has pleaded guilty and is cooperating with federal authorities, court papers show. His lawyer didn’t immediately return a request for comment.
Regulators found that Kang steered about $2 billion in fixed-income trades to firms represented by Kelley and Schonhorn beginning in early 2014, resulting in millions of dollars in commissions, of which the two earned between 35 and 40 percent, according to an indictment.
In that time, securities investigators found that the firms’ fixed-income business surged, with one of them increasing its domestic bond transactions from zero at the end of fiscal year 2013 to $2.378 billion at the end of fiscal year 2016, making it one of the top broker dealers doing state pension fund business, according to the complaint.
Prosecutors said that in exchange, Kang received a $10,000 all-expenses-paid trip to Montreal, Canada; a ski trip to Park City, Utah; tickets to a Paul McCartney concert in New Orleans; a $17,420 Panerai wristwatch; dinners at upscale restaurants; nights out at strip clubs; prostitutes; and cocaine.
The state’s pension fund has been the source of scandal before.
In 2010, a state comptroller pleaded guilty to charges he steered pension funds to a campaign contributor. Further investigations revealed investors’ widespread use of so-called placement agents to access pension funds, an arrangement some regulators have likened to pay-to-play.
Kang had been fired in 2012 by a private investment firm for accepting gifts from Schonhorn in exchange for steering fixed-income business, but he lied about his termination when he was hired by the state fund, according to the complaint.
A spokeswoman for the comptroller’s office said officials are conducting a “thorough review” of Kang’s hiring process.
AP reporter Kiley Armstrong contributed to this report.
22 responses to “Feds: Pension exec moved $2B for coke, hookers, other bribes”
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WOW! Wonder how State pension fund is doing?
yikes…it is probably common though. Waihee’s administration was infamous for airport contracts done this way i am told
Now this is the way a US Attorney is expected to perform his or her duties. Are you listening local Inouye crony US Attorneys?
Who can you trust? Can Bitcoin technology in the future prevent many of these thefts?
No it would be a major fiasco.
This kind of payoff stuff goes on all the time, every day
Pay for play on the rail?
Check those safety deposit boxes at the bank where Krook Caldwell consults part time at. Wouldn’t be the slightest bit surprised to find tons of brown Aloha envelopes in them!
Throw the perps in with the regular prison population. They need an eye opener amongst other things.
An astronomical form of Greed!
Trustees on the State’s ERS board, most who know virtually nothing about investments, get treated regularly to trips to NYC, dinners at top restaurants, tickets to athletics events and shows, etc. by the brokers who oversee the investments. Those brokers who get a piece of the ERS investment pool earn big dollars.
Yes, and the ERS had a negative return despite the stock market ending positive for the year! hahahahahahaha
At least I’m happy to know that my tax dollars are going to productive Wall St. bankers, hookers, hard working strippers and cocaine dealers instead of the greedy blood sucking inept union workers that do nothing all day but keep the chairs warm.
yikes!
The strippers and hookers are ok…the cocaine probably not a good thing. I hope the cocaine was for the strippers and not for him. LOL
Hey Krook Caldwell, you should ask for cocaine instead of brown Aloha envelopes with cash from Kiewit Construction, maybe it’ll give you wings like Red-Bull to get that rail finally built “on-time and on-schedule” old chap! LOL
Take you AM meds.
Wash it down with some trumpf “Goo Aid”.
NanakuliBoss, before opening your drunkf mouthf, you should look up what “trumpf” is, you big DUMMY! https://en.wikipedia.org/wiki/Trumpf
It continues in the history of mankind. Money and power takes the center stage of how the human race on this planet will continue to live the way it does. Its the same as millions of years ago when men first set foot on this planet. (Conclusion from reading the history of the world) It only looks different.
True the human race needs order and leadership but will that day come when those in power will do what is best for the human race or continue to do things only for their enrichment and satisfaction.
This is how it will be, as long as mankind is moved primarily by material craving, egoism, and ignorance.
They should beat the coke charge, in house sample.
“King”, eh? Sounds like a definite flight risk. Confiscate his passport.
What’s Ap is not secure?