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State Comptroller Sues Over Alleged Pension Fraud

Thursday, May 07, 2009

State Comptroller Thomas DiNapoli is suing a private equity fund that manages about $250 million of public pension money. The Comptroller says there was fraud, and that he wants to end the relationship. WNYC's Ilya Marritz explains.

REPORTER: The criminal complaint alleges that in 2004, principals at Dallas-based Aldus Equity Partners arranged for kickbacks to be paid to Hank Morris, a close advisor to then-Comptroller Alan Hevesi. It says in exchange, Morris secured hundreds of millions of dollars of pension money for Aldus to manage.

Aldus is also facing charges from the New York Attorney General and the Securities and Exchange Commission.

It's unclear whether the pension fund's overall performance was affected by these allegedly corrupt investment decisions. The Comptroller's complaint notes, however, that a due diligence report in 2004 raised concerns that Aldus Equity had only been in existence for about a year. For WNYC, I'm Ilya Marritz.

REPORTER: Aldus did not immediately return calls for comment

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