Lisa Chow is the economics reporter at WNYC. She tries to explore in her stories surprising aspects of New York’s many economies—in plain view or hidden, in neighborhoods or sectors.
Hevesi Advisor Sentenced to Prison
Thursday, February 17, 2011
A longtime advisor to ex-New York state comptroller Alan Hevesi was sentenced to a maximum of four years in prison for his role in a kickback scheme involving the state's multibillion dollar pension fund.
Hank Morris, long-time advisor to New York's former state comptroller Alan Hevesi, was sentenced to a maximum of four years in prison for his central role in a kickback scheme involving the state's multibillion dollar pension fund.
Political consultant Hank Morris, who read from a prepared statement, saying "words cannot express the depth of my remorse," was given the maximum penalty allowed under the law and was denied time to put his affairs in order before going to prison.
Last fall, Morris pleaded guilty to a felony securities fraud charge and admitted using his connection to Hevesi, the sole trustee of the state's pension fund, and other state officials to extract kickbacks from investment firms seeking to do business with the fund. As part of Morris's guilty plea, he forfeited $19 million he made in fees.
The sentencing Thursday "marks the beginning of the end of criminal proceedings arising out of a massive fraud against the New York State pension system," State Supreme Court Justice Lewis Bart Stone said.
The New York Attorney General's investigation into corruption at the state's pension fund began more than three years ago. In March 2009, then-Attorney General Andrew Cuomo charged Morris and David Loglisci, the pension fund's former chief investment officer, for directing hundreds of millions of dollars of pension fund money to Wall Street money managers, in exchange for contributions to Hevesi's political campaign, overseas trips, fees to Morris' placement agent firm and investments in a movie called "Chooch," produced by Loglisci's brother.
In a statement responding to Morris's sentencing, Governor Cuomo said: "Morris claimed that his actions were business as usual in Albany. Let that serve as a warning."
And New York State Comptroller Thomas DiNapoli called Morris's sentence "fitting."
"Jail time should help serve as a deterrent for anyone looking to rip off the state pension fund," DiNapoli said.
Loglisci pleaded guilty to securities fraud last March. Hevei pleaded guilty last October, admitting to taking campaign contributions and luxury vacations from one money manager who landed hundreds of millions of dollars worth of business from the state’s pension fund. Loglisci and Hevesi await sentencing next month.
The investigation has also resulted in guilty pleas from Elliott Broidy, chairman of Markstone Capital; Ray Harding, the former chair of the Liberal Party; Saul Meyer, a founding partner of Aldus Equity; Julio Ramirez, an unlicensed placement agent; and Barrett Wissman, hedge fund manager.