N.M. Educational Retirement Board has received two federal subpoenas
By Trip Jennings 5/29/09 5:35 PM
The New Mexico Educational Retirement Board has received two grand jury
subpoenas, the agency acknowledged Friday.
The acknowledgment came in a letter in which the agency denied a request by
the Independent to get a copy of any subpoena sent to the agency by the
U.S. Attorney's office.
"As of the date of this letter, the ERB has received two grand jury
subpoenas issued by the United States Attorney, District of New Mexico,"
reads the letter from agency counsel Christopher Schatzman.
The agency cited the New Mexico Supreme Court to deny the Independent's
request for the records, saying that the court had offered guidance that
there may be "circumstances under which information in a public record can
be justifiably withheld".
It was unclear Friday whether the two subpoenas the agency has received are
related to same investigation. Schatzman confirmed two weeks ago that the
agency had received a subpoena, but would not discuss the contents of
subject matter.
It was unclear Friday when the second subpoena had been sent to the agency.
Federal prosecutors also have subpoenaed documents from the State
Investment Council related to investments.
Both the Educational Retirement Board and State Investment Council have
found themselves pulled into a widening scandal that began in New York with
a criminal probe. So far two people involved in New Mexico investments over
the years have pleaded guilty or been indicted on corruption charges in the
New York probe.
Julio Ramirez, a California man who shared in placement fees related to New
Mexico investments as a third-party marketer, has pleaded guilty to
securities fraud in the New York criminal probe.
Meanwhile, the founder of New Mexico's former financial adviser, Aldus
Equity, also has been indicted in the probe.
Among the allegations against Aldus Equity's founder, Saul Meyer, is that
he helped the son of the New York state comptroller, Alan Hevesi, win a
lucrative contract in New Mexico for a firm he was representing in return
for Aldus' increased business in New York, according to a criminal
complaint.
At the time, the comptroller's son, Dan Hevesi, was acting as a third-party
marketer in New Mexico.
State lawmakers also are questioning the more than $15 million that Marc
Correra, the son of a friend of Gov. Bill Richardson's, has shared in as a
third-party marketer in dozens of state investment deals in recent years.
Third-party marketers, until recently, were obscure figures in the
investment world who acted as matchmakers between private equity and hedge
funds and states looking for a good return on their money.
Correra has not been accused of wrongdoing.
As part of the more than $15 million he shared in, a five-page document
released by the Educational Retirement Board also suggests Correra earned
$2 million on a controversial deal that cost the state $90 million in
losses.
The deal in question involved $90 million in state investments by the
Educational Retirement Board and the State Investment Council with
Vanderbilt Financial Trust. Ultimately the state lost all the money it had
invested with Vanderbilt, and those losses are at the center of a
whistleblower suit filed last year by the ERB's former investment officer.
Frank Foy has claimed a pay-to-play culture pervaded some of the state's
investment agencies, an allegation that the ERB and the State Investment
Council and its officials have vigorously denied.
Recent lists made public by the State Investment Council and Educational
Retirement Board shows that Correra earned fees for both Highland Park,
Ill-based Ajax Investments and Santa Fe-based Cabrera Capital Markets.
http://newmexicoindependent.com/28428/nm-educational-retirement-board-has-received-two-federal-subpoenas
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