Acting U.S. Attorney Joon H. Kim announced Wednesday the former Director of Fixed Income and Head of Portfolio Strategy at the New York State Common Retirement Fund (NYSCRF) pleaded guilty to participating in a pay-for-play bribery scheme.
Thirty-seven-year-old Navnoor Kang of Glendale, California was responsible for investing over $53 billion in fixed income securities and manage those investments on behalf of NYSCRF. NYSCRF prohibits its employees from accepting gifts, bribes and benefits of any kind.
Kang and his conspirators defrauded the NYSCRF from 2014 through 2016. Kang agreed to accept bribes from Deborah Kelley, a managing director at a New York-based broker-dealer, Gregg Shonhorn, a vice president at a New York-based broker-dealer and others in exchange for “fixed-income business from the NYSCRF. The bribes included lavish meals, nightclub bottle service, prostitutes, travel, narcotics, luxury gift, cash payments and tickets to sporting events, according to court documents.
Kang used his position to promote the interests of Schonhorn, Kelley and their respective brokerage firms. He steered over $3 billion in fixed income business to both broker-dealers in exchange for bribes, from which Schonhorn, Kelley and others earned millions in commissions from the NYSCRF.
“As an investment professional with New York State Common Retirement Fund, Navnoor Kang owed a duty to the public employees whose pension money he oversaw,” said Kim in a statement. But in this case of public corruption meets securities fraud, Kang sold himself and his duty to safeguard public retirement money for luxury vacations, jewelry, cash and even drugs. He has now admitted to his crimes and is a convicted felon. ”
The conspiracy to commit securities fraud carries a five-year prison term and the conspiracy to commit honest services wire fraud carries a 20-year prison term. Kang’s sentencing hearing is scheduled for February 23, 2018.
To read the full media release visit justice.gov.