Pension fund manager busted in drug
A crooked New York pension official hired by state Comptroller Thomas DiNapoli despite a shady past steered billions of dollars worth of fixed income securities trades to two brokers in exchange for bribes of sex, drugs and rock 'n' roll, the feds charged Wednesday.
Navnoor Kang allegedly was treated to hookers, piles of cocaine and VIP tickets to a Paul McCartney concert as part of a pay for play scheme involving the retirement accounts of government workers, including cops and firefighters.
Other payoffs cited by the feds include visits to strip clubs, $25,000 worth of bottle service at lounges, luxury vacations in New Orleans and Park City, Utah, a $17,400 Panerai watch and a $4,200 Herms bracelet for his girlfriend.
Kang, 37, was put in charge of a $50 billion fixed income investment portfolio in January 2014, despite having been fired from his previous job for nearly identical ethical breaches, court papers say.
The failed tennis player turned financial exec allegedly accepted at least 55 improper gifts including an $8,000 Rolex watch and $1,200 worth of Rolling Stones concert tickets while employed as a vice president at the prestigious Guggenheim Partners investment firm.
Court papers say Kang, during his job interview with the New York State Common Retirement Fund, "lied about the reason he was terminated" from his previous position.
DiNapoli's office wouldn't say what if anything it did to verify Kang's claims at the time. "We are currently doing a thorough review of his hiring process. A criminal background check was undertaken, including fingerprinting,
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Kang, who was fired by the state in February, was busted Wednesday in his new hometown of Portland, Ore., on charges that include conspiracy, securities fraud and obstruction of justice.
At his arraignment, Kang was ordered held after the feds revealed he was heard on a wiretap talking about fleeing the country,
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The five count indictment filed against him in Manhattan federal court also targeted stockbroker Deborah Kelley, 58, who surrendered to the feds in San Francisco.
Another broker, Gregg Schonhorn, 45, of Short Hills, NJ, secretly pleaded guilty last Thursday as part of a cooperation deal in which he pulled off a sting against Kang involving the Panerai watch,
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Kang knew both Schonhorn and Kelley before the state hired him. He accepted the Rolex from Schonhorn and the Rolling Stones tickets from a Schonhorn colleague who introduced them in Las Vegas in 2010, court papers say.
Kelley, meanwhile, provided a reference for Kang that helped him land his $166,464 a year job with the state pension system, where he supervised seven investment officers.
Once hired,
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In exchange, he allegedly got both their employers added to the list of brokers used by the pension system, "under the guise of facilitating additional liquidity and obtaining best execution."
As of March 31, Schonhorn's firm FTN Financial had "executed approximately $2.38 billion in fixed income securities trades," the papers state.
Schonhorn pocketed "sizable commissions often hundreds of thousands of dollars per month," the papers say.
Kelley's firm Sterne Agee Leach, which was bought out last year by Stifel, Nicolaus Co. executed nearly $1 billion in trades before firing her last year for falsifying expense reports to pay for Kang's bribes, according to the feds.
If not for the allegations, Kang might be viewed as a hero by the state, as the pension system's fixed income portfolio significantly outperformed the Vanguard Total Market Bond Index Fund during his tenure.
The Wall