Navnoor Kang, 38, the former director of fixed income and head of portfolio strategy at the New York State Common Retirement Fund (NYSCRF) and Deborah Kelley, 58, a managing director of institutional fixed income sales at a New York-based broker-dealer, have been charged with participating in a "pay-for-play" bribery scam involving the NYSCRF.
Kang was arrested yesterday in Portland and will be presented later before a US Magistrate Judge.
Bharara also announced unsealing of charges against Gregg Schonhorn, a vice president of fixed income sales at a New York-based broker-dealer who pled guilty and admitted to his participation in the scheme.
Bharara said Kang allegedly steered billions of dollars of business to broker-dealers who bribed him with luxury vacations, high-priced watches, drugs and cash.
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"The hard-earned pension savings of New Yorkers should never serve as a vehicle for corrupt, personal enrichment. The intersection of public corruption and securities fraud appears to be a busy one, but it's one that we are committed to policing," he said.
From January 2014 through February 2016, Kang served as Director of Fixed Income and Head of Portfolio Strategy for the NYSCRF.
In that capacity, he was responsible for investing more than USD 53 billion in fixed-income securities and was entrusted with discretion to manage those investments on behalf of the NYSCRF.
Such bribes - which totaled more than USD 100,000 - were strictly forbidden by the NYSCRF, and were paid secretly and without any disclosure to the NYSCRF and its members and beneficiaries concerning the conflicts of interests inherent therein.
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