What to Know
- Prosecutors allege Navnoor Kang accepted more than $100,000 in bribes to steer state pension business
- Kang allegedly accepted cash, drugs, prostitutes and luxury watches to give billions in business to two brokers
- It was the second time in less than 10 years a major "pay for play" scandal erupted with the state pension fund
A senior official of New York's public employee pension fund accepted bribes - including drugs and prostitutes - to steer business from the fund to certain brokers, according to a federal indictment unsealed Wednesday.
Navnoor Kang was director of fixed income and head of portfolio strategy for the New York State Common Retirement Fund, the third-largest U.S. pension fund with $184 billion in assets.
In that role, he directed billions of dollars in investments, with broker-dealers executing trades on the fund's behalf and earning commissions as a result.
According to prosecutors, from 2014 to 2016 Kang received bribes 'in the form of entertainment, travel, lavish meals, prostitutes, nightclub bottle service, narcotics, luxury gifts, and cash payments, among other things" to steer business to co-defendent Deborah Kelley and another broker.
The complaint alleges Kang accepted more than $100,000 in bribes, in total, in exchange for steering billions of dollars in business to Kelley's unnamed firm and to the other broker's firm as well. (The second broker, Gregg Schonhorn, is named extensively in the complaint but was not indicted with Kang and Kelley. The government unsealed a separate complaint against him on Wednesday.)
The indictment also alleges that Kang sought bribes even after specifically agreeing to abide by rules put in place after a similar "pay for play" scandal in 2007 in the state comptroller's office.
The current comptroller, Thomas DiNapoli, said in a statement his office was "outraged by Mr. Kang's shocking betrayal of his responsibilities" and that Kang was terminated last February.
Kang and Kelley face both securities fraud and wire fraud charges. It was not immediately clear if either had attorneys representing them.