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Investment executive charged in NY pension probe

NEW YORK – A pay-to-play scandal that began in New York, but is now expanding rapidly into other states, broadened again Thursday as authorities brought criminal charges against an executive at a Dallas firm that advises some of the country’s biggest public pension funds.

Saul Meyer, the 38-year-old managing partner of Aldus Equity Partners, was arraigned in Manhattan on charges that he violated state business law.

Prosecutors said he paid $300,000 in kickbacks to an aide to the state’s former comptroller in exchange for a state retirement fund investment deal worth $175 million.

Court papers said that while seeking an additional $200 million from the fund, Meyer also curried favor with pension officials by arranging for the comptroller’s son to get $250,000 in fees on an unrelated investment deal with a government fund in New Mexico.

Meyer is the fifth person charged in a probe led by N.Y. state Attorney General Andrew Cuomo that has raised questions about the conduct of investment companies that paid politically connected “placement agents” to help obtain pension fund business.

Cuomo’s probe has so far focused on deals struck during the tenure of former state Comptroller Alan Hevesi, but he signaled Thursday that the investigation had raised suspicions of wrongdoing in other states.

“I believe we are disclosing a national network,” Cuomo said. “This is all across the nation, and it continues today.”

He said more people and companies could face charges soon, and added that his investigators were passing information to other law enforcement agencies.

Meyer flew from Texas to New York for his arraignment, was released on $200,000 bail and flew home. His lawyer, Paul Shechtman, said his client is innocent.

“The time and the evidence will show that Saul Meyer did nothing wrong,” he said.

It is not illegal for companies to pay politically connected placement agents for help obtaining business from a government pension fund, but many states require those arrangements to be disclosed. The payments cannot be made as a cover for outright bribes.

A spokesman for Aldus had no immediate comment.

The Securities and Exchange Commission also filed court papers Thursday charging Meyer and Aldus with regulatory violations, saying the payments they made to Hevesi political aide Hank Morris amounted to “sham fees.”

That aide, Hank Morris, was previously charged in March along with the retirement fund’s chief investment officer, David Loglisci. Another Dallas businessman, Barrett Wissman, was later charged along with the former chairman of New York’s now-defunct Liberal Party.

Neither Hevesi nor his son, Daniel, who briefly worked as a placement agent while his father was in office, have been charged.

New Mexico’s State Investment Council fired Aldus as its financial adviser Wednesday.

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