New York Attorney General Andrew Cuomo, whose office brought the charges against Saul Meyer. (Courtesy photo)
Aldus Equity founder admits to recommending “investments that were pushed on him by politically-connected individuals in New Mexico”
Saul Meyer, the founder of the investment firm Aldus Equity, pleaded guilty today in New York to charges related to a kickback scheme that reaches all the way to New Mexico.
In doing so, Meyer admitted to recommending “investments that were pushed on him by politically-connected individuals in New Mexico” while Aldus was the investment adviser to New Mexico’s State Investment Council (SIC) and Educational Retirement Board (ERB).
That’s according to a news release from New York Attorney General Andrew Cuomo, who announced earlier today that Meyer and Raymond Harding, former chair of the Liberal Party in New York, pleaded guilty to “felony securities fraud charges” related to the scandal in New York.
The individuals in New Mexico that Meyer is referring to aren’t named, but it’s reasonable to wonder, with Meyer changing his plea, if he is turning over names to investigators.
Today’s news reignites a scandal that has been quiet in New Mexico in recent weeks. Cuomo’s investigation has sparked a national probe that extends into a number of states, the most prominent other than New York being New Mexico.
The guilty pleas, Cuomo said in the news release, “vividly depict the depth and breadth of corruption involving the New York State pension fund.” He has said in the past that he is “disclosing a national network of actors who often acted in concert and did this all across the country.”
Of Meyer, he said today, “we see a pension fund adviser — the outside ‘gatekeeper’ who is supposed to safeguard the integrity of the pension fund process — recommending deals based on pressure from pension officials and politically-connected people. We are bringing this ugly corruption to light and we must fix the system as well.”
Details of the case
Meyer was charged in May, and initially pleaded not guilty. The allegations against him included that he helped the son of the New York state comptroller win a lucrative contract in New Mexico for a firm he was representing.
According to the criminal complaint against Meyer, he sought and received control over an additional $200 million from a New York pension fund from then-N.Y. Comptroller Alan G. Hevesi in 2006.
At the time, Aldus was already doing business with the SIC in New Mexico, and, a week after Aldus won control over the additional $200 million in New York, the company recommended that the SIC invest as much as $30 million with a fund called Catterton VI. The SIC later invested $25 million with the fund.
The third-party marketer who helped Catterton win the New Mexico contract was Daniel Hevesi, son of the New York comptroller. He was paid $250,000 for his work on the deal.
The criminal complaint, quoting records obtained by the New York AG, states that, in May 2006, Daniel Hevesi thanked Meyer “for NM.”
An ongoing investigation
Both N.M. Attorney General Gary King and federal agents are investigating the investment scandal in New Mexico. To date, no government officials in New Mexico have been implicated in wrongdoing in the case. But the statement Cuomo released today raises questions about who in New Mexico will be implicated in any wrongdoing.
Here’s the full statement related to those “politically-connected individuals:”
“Meyer admitted that on numerous occasions, contrary to his fiduciary duty to SIC and ERB, he ensured that Aldus recommended proposed investments that were pushed on him by politically-connected individuals in New Mexico, knowing that these politically-connected individuals or their associates stood to benefit financially or politically from the investments and that the investments were not necessarily in the best economic interest of New Mexico.”