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Hevesi adviser pleads guilty to fraud: AG

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The chief political adviser to former state Comptroller Alan Hevesi, Hank Morris, pleaded guilty this week in State Supreme Court in Manhattan to being involved in a pay-to-play kickback scheme that landed him about $19 million in fees for allocating investments in the state pension fund to friends and political associates, state Attorney General Andrew Cuomo said.

Morris, 57, pleaded guilty to a single felony violation of the Martin Act, a state securities law, and faces up to four years in prison when he is sentenced Feb. 1, said Cuomo, the governor-elect. Hevesi, a Forest Hills resident, pleaded guilty in October to receiving $1 million in gifts in exchange for state pension business and will be sentenced Dec. 16 when he faces up to four years in prison plus fines for securities fraud, according to Cuomo.

Morris’ plea comes as part of a three-year investigation into corruption in the state comptroller’s office conducted by Cuomo.

“Hank Morris used his influence at the New York state comptroller’s office to stockpile millions in fees for himself from state pension fund investments,” Cuomo said in a statement. “Through his scheme, Morris personified pay-to-play corruption. With this plea, funds will be rightly restored to the state of New York and justice will be served.”

According to the attorney general, Morris will return the $19 million he received while working for Hevesi to the state pension fund and will be permanently banned from the securities industry in New York. He will also be prohibited from soliciting or receiving investments from the state or any governmental entity within New York and will be barred from holding any public position or entering into any contractual relationship with the state.

As part of Cuomo’s three-year probe into the comptroller’s office, the attorney general has alleged there was a complex criminal scheme involving numerous individuals operating at the highest political and governmental levels under Hevesi. Through this scheme, Hevesi, Morris and “certain of their political allies and friends” reaped tens of millions of dollars in kickbacks, bribes and sham consulting and finder fees connected to pension fund investments, according to Cuomo.

From January 2003 through December 2006, Cuomo said Morris used the state pension fund’s multibillion-dollar alternative investment portfolio to “enrich himself” and hand out favors and paybacks to political friends and allies.

During his plea in State Supreme Court in Manhattan, Morris admitted to helping arrange for Raymond Harding, the former head of the state Liberal Party, to receive fees on two pension fund investments. He also acknowledged during his plea that as Hevesi’s chief political consultant, he sought and received contributions for Hevesi’s re-election campaign from individuals who wanted to do business with the state pension fund, Cuomo said.

Cuomo’s investigation into corruption at the pension fund has led to eight guilty pleas to date, including Harding, former Chief Investment Officer at the Office of the State Comptroller David Loglisci, investment adviser Saul Meyer, hedge fund manager Barrett Wissman, unlicensed placement agent Julio Ramirez and venture fund manager Elliott Broidy.

Reach reporter Anna Gustafson by e-mail at agustafson@cnglocal.com or by phone at 718-260-4574.

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