MANHATTAN (CN) - The former head of New York's Liberal Party took more than $800,000 as a reward for political favors, the SEC claims in Federal Court. The government says Raymond B. Harding participated in a multimillion-dollar scheme involving the state's largest pension fund.
The SEC claims that former party chairman Harding and Barrett Wissman, a former hedge fund manager, participated in a "pay to play" scheme that extracted kickbacks from investment management firms seeking to manage assets of the New York State Common Retirement Fund. The SEC previously charged Henry "Hank" Morris and David Loglisci with orchestrating the scheme.
The amended complaint alleges Loglisci repeatedly directed investment managers to "hire" Morris, Wissman or Harding as finder or placement agents. Once a fee was agreed upon, Loglisci would approve the deal. Loglisci ensured that managers that made the requisite payments were rewarded with lucrative investment management contracts, while managers who refused were stiff-armed, according to the SEC.
The complaint claims Wissman was awarded at least $12 million in sham "finder's fees and arranged for millions of dollars of additional payments to Morris. Harding got about $800,000 in sham fees that were arranged by Morris and Loglisci, the SEC says.
The SEC also charged three entities through which Wissman allegedly perpetrated the fraud - Flandana Holdings Ltd., Tuscany Enterprises LLC, and W Investment Strategies LLC - and two investment management firms with which he was affiliated at the time, HFV Management L.P. and HFV Asset Management L.P.
"These men put their greed above the interests of New York's hard-working public employees," said Robert Khuzami, Director of the SEC's Division of Enforcement. "We will continue to unravel this tangled web of fraud and corruption."
Acting Regional Director James Clarkson is lead prosecutor for the SEC.
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