Henry “Hank” Morris, who was called the mastermind behind the pay-to-play pension fund scandal, is going to prison.
Today, New York Attorney General Eric T. Schneiderman sentenced Morris to the maximum term of 1 1/3 to 4 years in state prison. Morris is the former adviser to ex-New York Comptroller Alan Hevesi. In November, he pleaded guilty to a single felony in the state’s long running corruption investigation.
As part of a plea agreement, Morris has been permanently banned from the securities industry in New York state and also forfeited $19 million.
“Today, justice was served on Hank Morris, who will be appropriately punished for his role in one of the largest pay-to-play schemes in New York State history,” Schneiderman said in a statement. “Today’s sentencing decision by the Court sends a strong message to New Yorkers that those who abuse positions of power to line their own pockets will be held accountable by this office.”
The New York AG’s office, under Andrew Cuomo (who is now governor), investigated the “pay to play” practices at the New York Common Retirement Fund for the past three years. Hevesi was sole trustee of the fund, which is valued at $124.8 billion. Cuomo has charged that the fund became “a piggy bank” for Morris, who reaped millions of dollars in fees from individuals and firms seeking to invest the state’s money, Reuters has said.
Moriss’ jail term is the latest but it isn’t the most interesting. In late December, Cuomo opted to settle his long-running public fight with Steve Rattner, the former Quadrangle co-founder. Cuomo claimed Rattner paid kickbacks to win investment business from the New York state pension fund. The former NYAG filed two separate lawsuits against the financier, sought to recover at least $26 million and ban Rattner for life from the New York securities industry. Rattner ended up agreeing to pay $10 million. He also cannot seek business from public pension funds for five years.
But there will be more news for Hevesi, Morris’ former boss. The disgraced ex-Comptroller pleaded guilty to a single charge of felony corruption in October. Hevesi will be sentenced on March 10, a spokeswoman for NYAG Schneiderman says. He faces up to four years in prison.Get your FREE trial or subscribe now to Buyouts to find new deal opportunities, super-charge your fundraising efforts and track top managers.