Thursday, 26 May 2016
Last updated 12 hours ago
Mar 11 2010 | 3:26pm ET
The former chief investment officer of a New York public pension fund has pleaded guilty to his role in a pay-to-play scandal that involved a number of prominent hedge funds and private equity firm.
David Loglisci pleaded guilty yesterday to violating New York’s general business law. He is cooperating with the continuing investigation.
The specific count that Loglisci pleaded to involved the Carlyle Group and Riverstone Holdings. According to New York Attorney General Andrew Cuomo, Loglisci’s New York State Common Retirement Fund invested $150 million in the Carlyle/Riverstone Global Energy and Power Fund in 2003 in exchange for Riverstone founder David Leuschen’s $100,000 investment in a movie produced by Loglisci’s brother. Carlyle, Riverstone and Leuschen have all reached settlements with Cuomo.
Loglisci said Henry Morris, the top political advisor to former New York Comptroller Alan Hevesi, controlled which alternative investment firms would receive allocations, and which would not. Morris, who has pleaded not guilty in the case, favored firms that donated to Hevesi’s campaigns, and often extracted kickbacks in the form of sham placement fees.
Hevesi has not been charged in the kickback scheme, although Cuomo’s investigation is ongoing.
The attorney general said that Loglisci did not receive any of the kickback money. But he admitted that he knew Morris was receiving them and splitting them with others, several of whom have already pleaded guilty in the case.
Loglisci faces up to four years in prison at sentencing; without the deal, he could have been looking at 25 years.