NY Attorney General Andrew Cuomo alleges that illegal dealings related to investment funds extended all the way to New Mexico
A founder of Aldus Equity who was charged with a felony in New York on Thursday faces allegations that, in exchange for increased business in that state, he helped the son of the New York state comptroller win a lucrative contract in New Mexico for a firm he was representing.
The new allegation further ties New Mexico to the massive scandal that is rocking New York and spreading across the nation, and comes on the heels of Gov. Bill Richardson ordering the State Investment Council (SIC) and Educational Retirement Board (ERB) to fire Aldus.
In filing a fraud-related felony charge against Aldus founder Saul Meyer on Thursday, Andrew M. Cuomo, New York’s attorney general, said on a conference call with reporters that he is “disclosing a national network of actors who often acted in concert and did this all across the country,” The New York Times is reporting.
“This is sort of like when you pull a thread on the sweater and that one thread starts to unravel the entire fabric,” the Times quoted him as saying. “We’re pulling threads and it turns out the other end of the thread is in New Mexico or Connecticut or Illinois or in California.”
According to the criminal complaint Cuomo’s office filed against Meyer, in 2006 Meyer sought and received control over an additional $200 million from a New York pension fund from then-N.Y. Comptroller Alan G. Hevesi.
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.”
Meyer, who also faces charges of violating securities law, has pleaded not guilty.
No government officials in New Mexico are implicated in any wrongdoing in the criminal complaint, which simply indicates that New Mexico served as the staging area for half of the alleged criminal deal for which Meyer is charged.
Investigations ‘lead back to one another’
In New Mexico, officials with the SIC and ERB have been questioned by the FBI about Aldus. Both agencies suspended contracts with Aldus earlier this month and began internal probes. Then on Wednesday, Richardson ordered the SIC to terminate its deal with Aldus, and on Thursday, he instructed the ERB to do the same.
The Times article points out that the action by Richardson came “in the wake” of the charges in New York as “many Aldus clients were scrambling to sever their ties with the firm.” According to the Times, Cuomo believes he has “uncovered what amounts to a conspiracy involving politicians, professional investors and consultants to defraud public pension funds in New York and other states by paying millions of dollars in kickbacks in exchange for access to the funds.”
There are several other connections between the scandal in New York, the New Mexico investment agencies and Richardson that I’ve previously written about. Noting the connections, the Times writes, “The tentacles of the various investigations appear to lead back to one another.”
Cuomo was quoted as saying that his office is “purposefully and aggressively looking to cooperate with other enforcement agencies across the country” in the probe.