Former state comptroller Alan Hevesi’s chief investment officer pleaded guilty last week to charges stemming from state Attorney General Andrew Cuomo’s investigation into corruption of the state pension fund during Hevesi’s tenure.
David Loglisci was the chief investment officer of the pension fund under Hevesi, a Forest Hills resident and former state assemblyman, from January 2003 to May 2007, which gave him the authority to recommend where the fund should invest its money, Cuomo said.
When he pleaded guilty to violating the Martin Act last week, Loglisci admitted that he abdicated his authority to Hevesi political adviser Hank Morris, who is accused of helping to steer hundreds of millions of dollars worth of investment deals to himself and to politically favored firms, Cuomo said.
The Martin Act is a state law that gives the attorney general authority to go after securities fraud.
Loglisci acknowledged he made pension investment decisions based on how the decisions would politically benefit Hevesi rather than the best interests of pension holders, the attorney general said.
“Not only were pension recipients defrauded, but so were taxpayers across New York who are ultimately responsible for sustaining the fraud,” Cuomo said in a statement. “A culture of corruption permeated the fund and shows how vulnerable it can be to graft and exploitation without dramatic reform.”
Loglisci, who faces up to 1 1/3 years to four years in prison when he is sentenced, admitted he had been instructed by senior comptroller’s office officials to get Morris’ approval prior to recommending or declining investment proposals and ceded his authority to the fund’s alternative investment portfolio over to Morris, Cuomo said.
The attorney general began investigating corruption in the comptroller’s office under Hevesi more than two years ago and contended there was a “complex criminal scheme involving numerous individuals operating at the highest political and governmental levels under [Hevesi], in which the state pension fund was used as a piggy bank for the comptroller’s chief political aide and a favor bank for political allies and other friends.”
While a number of comptroller office officials have been ensnared in the investigation, charges have not yet been filed against Hevesi, who was comptroller from 2003-07 and resigned in February 2007 after it was revealed he used a state driver to act as a chauffeur for his ailing wife, claiming there were threats to her security.
But the State Police found there were no threats against Hevesi’s wife that warranted using the state driver.
The pension fund investigation has led to six guilty pleas, including one by former Liberal Party Chairman Ray Harding, whom Cuomo alleged to have secured a six-figure job at a health insurance company for then-assemblyman Michael Cohen in 2005, which paved the way for one of Hevesi’s sons, Andrew Hevesi, to attain Cohen’s Assembly seat.
In exchange for his help, Harding was rewarded with illegal placement fees from the comptroller’s office, Cuomo said.
Cuomo said Andrew Hevesi was not made aware of the maneuvers made on his behalf.
Defense motions in Morris’ case were due this Thursday, a spokesman for Cuomo said. His next court date was scheduled for June 24.
Reach reporter Howard Koplowitz by e-mail at hkoplowitz
©2010 Community News Group
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