Pay-to-Play Indictments Echo Scandal at State Pension Fund from a Decade Ago

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U.S. Attorney Preet Bharara pauses at a news conference in Manhattan to announce that Federal prosecutors have reached an agreement with General Motors.

A portfolio manager at the New York State public employee retirement fund allegedly steered investments worth billions of dollars to favored financial firms in exchange for lavish bribes that included cocaine, prostitutes, and ski trips, according to US Attorney Preet Bharara, who unsealed charges Wednesday against three people in connection with the alleged crimes.

Navnoor Kang was director of fixed income & portfolio strategy at the New York State Common Retirement Fund from 2016 to 2014. He allegedly took bribes totaling $100,000 from Deborah Kelley, who was a managing director at Sterne Agee (her unit is now a part of Stifel Nicolaus), and Gregg Schonhorn, a former vice president at FTN Financial.

Perhaps the most stunning thing about the alleged scheme is how strongly it echoes a scandal involving the state pension fund exactly a decade ago, which ended up sending then state Comptroller Alan Hevesi to jail. 

"This was an age old and classic tale of quid pro quo corruption," Bharara said. "What was the alleged quid? More than a hundred thousand dollars in bribes for Kang."