http://www.nypost.com/seven/03202009/ne ... 160473.htm
DEM DUO IN $30M PENSION 'SCAM'
123 'PAY TO PLAY' RAPS
By BRENDAN SCOTT in Albany and LAURA ITALIANO in NY




FUND 'FRAUD': Hank Morris (left), under arrest yesterday, and a Hevesi ex-aide allegedly used the pension fund as a "piggy bank."


March 20, 2009

Democratic political consultant Hank Morris and a top lieutenant to disgraced former state Comptroller Alan Hevesi were indicted yesterday in a scheme to trade lucrative investments in the state pension fund for more than $30 million in kickbacks, gifts and campaign contributions.

The 123-count indictment against Morris and former state pension-fund manager David Loglisci stems from a two-year pay-to-play probe by state Attorney General Andrew Cuomo.

"Morris used the fund as his own piggy bank," Cuomo said in announcing the bombshell indictment. "The indictment charges crimes that go beyond the grossest manifestations of pay-to-play."

The indictment charges that Morris used his access to the Comptroller's Office to direct more than $4 billion from the pension fund to private equity firms, venture-capital funds and businesses in exchange for bogus "placement fees" and other payoffs.

The practice began shortly after Hevesi took office in 2003 and continued until he resigned in late 2006, according to court papers.

In exchange for signing off on the dirty deals, the indictment charges Loglisci received hundreds of thousands of dollars in payoffs, including some $290,000 to help his brother film and distribute a poorly received comedy, "Chooch," about two Italian-Americans.

"You couldn't make this up," Cuomo said.

The state pension fund now valued at $122 billion serves more than a million retirees, beneficiaries and contributors.

Morris and Loglisci turned themselves in at 8:30 a.m. and were whisked into a Manhattan courtroom two hours later.

Both men wore open collars and sports jackets with overcoats draped over their handcuffs. They said only, "Not guilty."

If convicted on all counts, Morris faces a maximum of 340 years in prison.

The charges against Loglisci carry a total possible sentence of 193 years.

"The New York state pension fund made hundreds of millions if not billions of dollars on investments that Hank Morris lawfully introduced to it," said Morris' lawyer, William Schwartz. "And the fund did not pay him one penny. Hank Morris is innocent and we will defeat the charges."

Loglisci's attorney, Irving Seidman, said the case "has its origin not in truth but in politics" and argued his client had led the pension fund to dramatic growth.

Cuomo said the investigation continues and promised "several cases and developments" in the weeks to come.

Hevesi, who resigned after pleading guilty to felony theft for using state workers to chauffeur his wife, was not named in this latest indictment.

Hevesi has repeatedly denied through an attorney any knowledge of the kickback scheme.

The indictment mentioned two anonymous co-conspirators, including one high-ranking Hevesi official who allegedly took hundreds of thousands of dollars in bribes, including cash and rent payments for his girlfriend.

A source familiar with the investigation identified that person as Hevesi's former chief of staff, Jack Chartier, who was dating one-time "Mod Squad" star Peggy Lipton.

Cuomo is investigating whether financial firms continue to use politically connected consultants to gain access to the pension fund.

brendan.scott@nypost.com




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