Former NY state pension manager charged with bribe-taking

Federal prosecutors charged a former portfolio manager for the nation’s third-largest pension fund with accepting a series of bribes in exchange for investment work.

In a series of changes announced Wednesday, the government charged Navnoor Kang with accepting bribes in the form of “entertainment, travel, lavish meals, prostitutes, nightclub bottle service, narcotics, luxury gifts and cash payments” from a pair of broker-dealers. Kang, who was charged with managing billions of dollars in pension funds for state employees, in turn agreed to steer investment business in their direction, as he managed billions of dollars in pension funds for New York State.

“Today, we allege a classic, quid-pro-quo bribery scheme at the New York State Common Retirement Fund, the third largest pension fund in the country. Navnoor Kang, a former portfolio manager at the fund, allegedly steered billions of dollars of business to broker-dealers who bribed him,” said U.S. Attorney Preet Bharara. “The hard-earned pension savings of New Yorkers should never serve as a vehicle for corrupt, personal enrichment.”

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Charges were announced Wednesday against Navnoor Kang, a former official charged with managing billions of dollars in pension funds for New York State, as well as two broker-dealers.

Kang was the head portfolio strategist for the New York State Common Retirement Fund from 2014 until February. During that time, investigators charge, Kang received a stream of perks from a pair of broker-dealers — Gregg Schonhorn and Deborah Kelley — in exchange for $2.5 billion in state business.

If convicted, Kang and Kelley each face up to 105 years in prison and $6.25 million in fines. Schonhorn already pled guilty to six charges.

Among the bribes Kang allegedly received include a $17,000 watch, a $4,200 bracelet for his girlfriend — which he requested — and over $100,000 spent on hotel rooms, restaurants and bars.

In turn, Schonhorn and Kelley allegedly saw their business with New York’s pension funds skyrocket, as Kang sent over $2 billion in business to the pair and their companies.

Charges against Kang and Kelley were filed in the U.S. District Court for the Southern District of New York.