An Indian-origin former portfolio manager at one of the largest pension funds in the US is among three people charged in a bribery scam where billions of dollars of business was steered to broker-dealers in exchange for luxury vacations, drugs, cash and prostitutes.
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 on Wednesday in Portland and will be presented later before a US Magistrate Judge.
Kelley is expected to surrender to authorities in San Francisco, US Attorney for the Southern District of New York Preet Bharara said.
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.
"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.
The NYSCRF was a pension fund administered for the benefit of public employees of the State of New York and is third largest pension fund in the US, holding approximately $184 billion in assets in trust for a total of more than one million retirees and other beneficiaries.
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 $53 billion in fixed-income securities and was entrusted with discretion to manage those investments on behalf of the NYSCRF.