I am writing today to announce the closure of the New Mexico Independent. After three and a half years of operation in New Mexico, the board of the American Independent News Network, has decided to shift publication of its news…
Feds issue subpoena to Educational Retirement Board
The counsel for the state’s Educational Retirement Board confirmed Friday afternoon that his agency has received a subpoena from the U.S. Attorney’s Office for New Mexico.
Chris Schatzman would not discuss the contents or subject matter of the subpoena, other than to say that the agency received it last week.
Schatzman’s confirmation comes a day after it was reported that federal prosecutors had 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, pleaded guilty Wednesday 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.
The allegations could expose practices in New Mexico that may have crossed the sometimes-blurry line between influence peddling and the legitimate service third-party marketers perform for money managers.
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.
Now, state lawmakers 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.
One lawmaker said of the millions Correra made that “something smells fishy.”
Correra has not been accused of wrongdoing.
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.
As part of the more than $15 million he shared in, the five-page document released by the ERB 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.
State records also show that Correra shared in $700,000 in placement fees with Ramirez and one other person. State records show that Ramirez shared $500,000 in placement fees with Correra on a $25 million investment in 2007 that the State Investment Council made with KH Growth (Vicente Capital). Ramirez shared another $200,000 with Correra and Robert Aguilar on a $10 million investment the Educational Retirement Board made with KH Growth.