Charges relating to a pay-to-play scheme involving state pension plans were announced by U.S. Attorney General for the Southern District of New York Preet Bharara at noon Wednesday.
Press conference @ noon today to announce charges relating to pay-to-play scheme at NY State Common Retirement Fund https://t.co/4Mj9ePwt70
— US Attorney Bharara (@PreetBharara) December 21, 2016
The charges are against former portfolio manager at the New York State Common Retirement Fund, Navnoor Kang, and two brokers — Deborah Kelley and Gregg Schonhorn.
The legal claims are that Kang, Kelley, and Schonhorn “participated in a scheme to defraud the NYSCRF and its members and beneficiaries,” according to court documents released Wednesday. The case alleges the three had an agreement wherein outside entities would, “pay Kang bribes, in the form of entertainment, travel, lavish meals, prostitutes, nightclub bottle service, narcotics, luxury gifts, and cash payments, among other things, in exchange for fixed income business.”
The suit also claims that Kang used his position of power to “promote the interest of Kelley and Schonhorn, and their respective firms.” Kang allegedly steered “more than $2 billion in fixed-income business,” to Kelley and Schonhorn’s respective companies.
Kang currently works as the Chief Strategy Office for Fair Observer, a San Francisco-based nonprofit media organization. He began his career as an analyst for Goldman Sachs.
Accompanying the attorney general at the noon press conference were Special Agent-in-Charge of the New York Field Office of the Federal Bureau of Investigation, William F. Sweeney, and Director for the Division of Enforcement for the Securities and Exchange Commission, Andrew Ceresney.
The conference is available live via Facebook as of 12 p.m. Eastern time Wednesday.
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