NY Pension Scammer Heads to Prison for Pay-to-Play Scandal

(February 17, 2011) — Henry “Hank” Morris, the former top political aide to disgraced former Comptroller Alan Hevesi, has been sentenced to up to four years in prison. He has also agreed to repay $19 million in ill-gotten gains while being permanently banned from the securities industry in New York State..

The prison sentence placed on Morris was the maximum term available to NY Supreme Court Justice Lewis Bart Stone..

“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,” said Attorney General Eric Schneiderman announced 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. I’d like to thank Governor Cuomo and his team in the Attorney General’s Office for their work on this matter.”.

Morris pleaded guilty to a felony violation of New York state’s Martin Act in November. Both the New York State Attorney General’s office and the Securities and Exchange Commission have been looking into allegations that Morris and members of Hevesi’s office sold access to New York’s $132.8 billion Common Retirement Fund..

New York Attorney General Andrew Cuomo accused Morris last year of corrupting the investment process at the pension to grant deals that would benefit himself, his colleagues and contributors to Hevesi’s campaign. In July, Supreme Court Justice Lewis Bart Stone in Manhattan dropped some of the charges against Hevesi, which include felonies and misdemeanors of bribery, grand larceny, money laundering and fraud. The grand jury heard “sufficient evidence” to maintain most of the charges regarding his corrupt operation, where decisions about which funds to invest in were based on whether the fund “agreed to pay placement fees or share management fees with Morris rather than solely on the prudent investor rule,” the judge said. Cuomo’s office argued that Morris’ conduct was fraudulent and shouldn’t be excused because of a perception that “everybody does it.” Morris has fought back, saying the case should be dismissed because the “long-standing” practice of using political connections to obtain access to public assets is, while possibly unethical, not illegal..

The investigation into conflicts of interest over pay-to-play has resulted in eight guilty pleas to date. In addition to Morris, the Attorney General’s Office secured guilty pleas from former New York State Comptroller Alan Hevesi; former Chief Investment Officer David Loglisci; former Liberal Party Chair Raymond Harding; investment advisor Saul Meyer; hedge fund manager Barrett Wissman; unlicensed placement agent Julio Ramirez; and venture fund manager Elliott Broidy. These defendants are scheduled to be sentenced in the coming weeks.