Two of former New York Comptroller Alan Hevesi’s top aides have been indicted on charges they took kickbacks and other payments to steer billions of dollars in state pension fund investments to favored companies, state officials said Thursday.
Hank Morris, who was Hevesi’s top political adviser, and David Loglisci, the former chief investment officer in the comptroller’s office, face a total of 123 charges, including enterprise corruption, securities fraud, grand larceny, bribery and money laundering, according to the indictment. Federal securities regulators also filed a civil fraud suit against the men, and authorities said they will move to seize as much as $35 million in assets.
Both pleaded not guilty at their arraignment Thursday in Manhattan. Morris and Loglisci are accused of arranging “placement fees” and other payments from companies seeking investments from the fund, now valued at about $122 billion. The charges came after a two-year investigation by the state attorney general’s office, which said the probe is continuing. Hevesi has not been charged. The Democrat was forced to resign early in 2007 after he was convicted of using state workers as drivers for his wife.
Prosecutors said Morris and Loglisci corrupted the fund’s investment operations to benefit themselves, family, friends and political associates from 2003 to 2006. They said Morris also got millions of dollars in campaign contributions for Hevesi from firms doing business with the comptroller’s office and arranged bogus placement fees for Hevesi’s political allies.
In one example, Morris is accused of taking more than $30 million in fees for himself and business partners on deals he was involved in approving.
“The New York State Pension Fund made hundreds of millions, if not billions, of dollars on investments Hank Morris lawfully introduced to it, and the fund did not pay him one penny,” said William Schwartz, Morris’ lawyer. “There was no fraud and no corruption.”
Irving Seidman, Loglisci’s lawyer, said Thursday the pension fund grew dramatically on his client’s watch and won awards for its performance and transparency.
He denied the charges and said the prosecution was political.