This action might not be possible to undo. Are you sure you want to continue?
THE MEXICO STATE INVESTMENT COUNCIL as Administrator and Custodian the LAND GRANT PERMANENT FUND the SEVERANCE T AX PERMANENT FUND, Case No. D-IOI-CV-201101 Plaintiff,
GARY BLAND, GUY RIORDAN, SAUL MEYER, RENAISSANCE PRIVATE EQUITY PARTNERS, LP d/b/a ALDUS EQUITY PARTNERS, LP, MARC CORRERA, ANTHONY CORRERA, ALFRED JACKSON, DANIEL WEINSTEIN, VICKY L. SCHIFF, JULIO RAMIREZ, BARRETT WISSMAN, WILLIAM HOWELL, MARVIN ROSEN, DANIEL HEVESI, ELLIOTT BROIDY, MILTON ROBERT CARR, and HENRY MORRIS,
JUR Y TRIAL DEMANDED
FIRST AMENDED COMPLAINT FOR MONEY DAMAGES Plaintiff, the New Mexico State Investment Council ("NMSIC"), for its First Amended Complaint for Money Damages against the Defendants (the "Complaint"), as
citizens of the State of New Mexico for an unlawful "pay-to-play" scheme perpetrated by the
rnents on 3.
investments Bland, and Aldus had fiduciary
public trust to make and/or recommend the
based solely on the best interests of the public trust funds and their beneficiaries,
citizens of New Mexico. 4. Bland, Meyer and Aldus breached process. caused NMSIC to make investments on their fiduciary duties and corrupted the
integrity of the investment
Bland, Meyer and Aldus wrongfully
behalf of the public trust funds based on their own selfish interests and the personal, political and financial interests of politically-connected individuals and their associates, including Defendants
named herein, rather than based solely on the best interests of the public trust funds and their beneficiaries, the citizens of New Mexico. Bland, Meyer and the politically-connected individuals who aided, abetted and
profited from this pay-to-play make restitution.
scheme have been unjustly enriched
and should be required to
are Constitution for the benefit of the citizens of New Mexico, the real party in interest.
on public lands. 10. $15,000,000,000. II. 12. 13.
STPF is severance taxes on the oil and from
The Public Trust Funds currently have a market value of approximately
Defendant Defendant Defendant
Bland is a citizen of the State of New Mexico. Meyer is a citizen of the State of Texas. Aldus is a Texas limited partnership with a principal place of business
in Dallas, Texas.
Defendant Defendant Defendant Defendant Defendant Defendant Defendant
Guy Riordan ("Riordan")
is a citizen of the State of New Mexico.
Marc Correra is a citizen of the State of Texas. Anthony Correra is a citizen of the State of New York. is citizen of the State of Texas.
Alfred Jackson ("Jackson") Daniel Weinstein
is a citizen of the State of California.
Vicky L. Schiff ("Schiff') Julio Ramirez ("Ramirez")
is a citizen of the State of California. is a citizen of the State of California. ac
Daniel Hevesi is a citizen of the State of New York. Elliott is a
individuals a later date. and business entit whom the Attorney General to pursue at
JURISDICTION AND VENUE
29. This Court has jurisdiction over this action pursuant to Article VI, § 13 of the
New Mexico Constitution. 30. Venue is proper in this district because Plaintiff is a government entity whose
principal office is located within this district. 31. All of the Defendants have submitted themselves to the jurisdiction of this COUlt, of acts
because (a) the causes of action alleged herein arise out of the Defendants' enumerated in NMSA 1978, § 38-1-16 (1971); (b) Defendants knowingly
activities directed toward the State of New Mexico that have caused injury within New Mexico; and (c) Defendants purposefully availed themselves of the privilege of conducting activities
within New Mexico so as to establish the minimum
contacts required to satisfy due process.
Officer and third-party
m core it estate assets in
Compared alternative substantial investments investments losses.
to the core portfolios of public equit
and fixed income instruments,
generally present the prospect of superior returns and the risk of more investments are more complex and difficult to evaluate than the
in the core portfolios.
The Marketing of Alternative Investments 35. Alternative investments are often sold by investment management firms that seek
to amass a pool of money - or commitments investors, 36.
to fund money - primarily from institutional
including state and municipal public pension funds and public trust funds. Investment management firms typically receive substantial fees from investors for
their role in managing alternative 37. Investment
investments. firms sometimes share a portion of the fees they receive marketers who playa
from a state public trust fund or other source of capital with third-party role in securing the investment A third-party for the investment management firms.
can serve a legitimate purpose and earn a
When the investor is a public pension or public trust fund, there is a danger that people make and to
individuals influence to exert on those controlling the investment
will use improper
process for their own financial or
political benefit or for the financial or political benefit of their associates. 41. There is a danger that investment individuals management firms that benefit from the efforts disguised as legitimate
of politically-connected placement agent fees.
will agree to pay kickbacks
The New York Pay-to-Play Scheme
42. Commission kickbacks Recent investigative ("SEC") and enforcement efforts by the U.S. Securities and Exchange
and the New York Attorney General ("NY AG") have revealed that such scheme to defraud one of the largest publicFund ("NYCRF'). of the scheme
were made as part of a "pay-to-play"
pension funds in the country,
the New York Common Retirement agencies,
to the enforcement
the primary perpetrators
were Alan Hevesi, the former New York State Comptroller; advisor and chief fund-raiser; Deputy Comptroller. and David Loglisci ("Loglisci"),
Morris, Alan Hevesi's top political the former New York State and
in 2003, Alan Hevesi, Morris and Loglisci
Those investment management or
firms paid millions of dollars to Morris and others in the form of
to a term to to
The New Mexico pay-to-play forms the for this action not
resembles the New York scheme in many respects, but also involves many of the same participants and investments. 46. Indeed, as detailed herein, the intertwined New York and New Mexico schemes
were part of a larger nationwide web of corruption that has eroded the public treasury and corroded the public trust. The New Mexico Pay-to-Play Scheme The Roles Plaved bv Garv Bland and Anthony Correra 47. One of the primary perpetrators of the pay-to-play scheme in New Mexico was
Gary Bland, who, from January 14,2003, through October 29,2009, was the State Investment Officer. During his tenure, Bland caused NMSIC to make alternative investments for the purpose of benefiting politically-connected individuals, rather than solely on the basis of the
underlying merits of the alternative investments. Collectively these investments involved a commitment more than $2,000,000,000 of the Public Trust Funds' assets.
During his tenure, Bland was one of the highest paid state employees in the State $2,000,000.
was a co-trustee a
trust assets Legislat 51. In 10 removed the State Investment
Officer as a member of NMSIC. duty to
As a co-trustee
of the Public Trust Funds, Bland had a fundamental of the trusts, complete
loyalty to the interests of the of the interests the
citizens of New Mexico and to exclude all selfish interests and all consideration of third persons. Bland was not permitted,
in any manner or to any degree, to subordinate to his own interests or the personal,
interests of the Public Trust Funds' beneficiaries political interests of third parties. 52. confidante. contributed Anthony Correra was Governor Anthony Correra personally, tens of thousands
as well as through his family and entities he controls, Richardson's political campaigns and Forward,
of dollars to Governor
political action committees.
Anthony Correra served as a trustee of Moving America and the largest contributor to Governor
one of those political action committees
in hiring Bland.
Anthony Correra was a member of the search committee
In fact, during the early stages of Bland's
as a state-
an In I options of various companies former stockbroker department permanently securities the while in
with trading in stock and of inside information he obtained from a
tips from an attorney
in the mergers and acquisitions law firm. A federal district court of the federal
of a major New York -based international enjoined Anthony
Correra from violating the antifraud provisions
his illegal profits of $496,842.
laws and ordered him to disgorge
The SEC barred
Anthony Correra from association securities dealer. 55. purporting
with any broker, dealer, investment
adviser or municipal
Acting in his role as self-appointed to speak on behalf of Governor
and often requested
Anthony Correra investments
that Bland cause NMSIC to make alternative individuals,
that would benefit
many of whom made and solicited others to make to or for the benefit of Governor Richardson's election
directly or indirectly,
campaigns. Anthony Correra did this to benefit, among others, his son Marc Correra, who
B tenure was in connect
with a substantial were not in
number of NMSIC alternative
even if those to
by the Public Trust Funds. 58. On numerous occasions, Bland purposefully ignored the input and advice of his best available potential investments for NMSIC, and instead approved and made investments primarily for the purpose of benefiting politically-connected than solely on the basis of the underlying merits of the alternative investments. 59. Anthony Correra knew or willfully disregarded the fact that Bland directed the sole purpose of enriching him. Anthony that Bland NMSIC to make certain in individuals rather
investment management firms to Marc Correra or willfully
NMSIC was A
61. responsibility 62.
Aldus was run by Meyer. for advising NMSIC.
was the Aldus partner with primary
On January 20, 2004, Bland signed a Professional
on behalf of NMSIC; Meyer signed on January 21, 2004, on behalf of Aldus. 63. Under the terms of the Professional with NMSICs Services Contract, Aldus agreed to provide
advisory services in connection performance investments. 64. 29,2009, of due diligence
in private equity funds, including the about specific potential
and the presentation
Over the course of Aldus's
which was terminated
on or about April lucrative advisory
NMSIC paid Aldus more than $4,300,000,
In addition to receiving
its own investment
fees from NMSIC during that period, Aldus managed garner additional 65. investments for those funds.
funds and sought to
Under the terms of the Professional
Meyer and Aldus, as
of NMSIC, had fiduciary
to act in the best interests of the Public Trust Funds and
New Mexico against any and all and
legal fees and liability in
met with on behalf Governor
on numerous or that
would often instruct, in certain private equity funds.
NMSIC to make investments
At one such meeting in or about 2004, Anthony Correra and other valuable gifts. On information and belief, Anthony
Meyer a significant
Correra gave the
payment and other gifts both to reward actions already taken by Meyer consistent
requests and suggestions
and to encourage
Meyer to take additional
requests and suggestions. Meyer and Aldus caused politically-connected agent firms.
approval and assistance,
NMSIC to make alternative individuals, 70. $1,000,000,000
for the purpose of benefiting
including the principals Collectively,
of fund management
firms and placement
involved a commitment
of more than
of the Public Trust Funds' assets. Meyer used Aldus's position as an investment advisor to NMSIC to curry favor
with powerful entities and individuals for Aldus's business growth.
in the major financial centers and advance his own agenda scheme that extended own beyond
Meyer created a far-reaching to
favors and placement
The Involvement of Mever and Aldus in the New York Pav-to-Plav Scheme
wac in s On March
and an "Aldus Partner" had agreed in May 2004 to pay nearly $320,000 in sham placement to Morris in exchange The SEC complaint for Aldus being selected to manage $175,000,000 of NYCRF assets. with managing
further alleged that Aldus used the monies it was entrusted
for the NYCRF to invest in other funds, not for the benefit of the NYCRF, bogus placement agent fees associated with those investments
but in order to pay by Morris.
to entities controlled
On April 30, 2009, the SEC filed an amended complaint
in New York against laws.
Aldus, charging Meyer and Aldus directly with violations of the federal securities
Also on April 30, 2009, the NYAG arrested Meyer after filing a criminal against him based on the activities described in the SEC complaint.
Meyer's Admission of Wrongdoing 76.
in New York and New Mexico In his allocution,
On October 2, 2009, Meyer pled guilty to the criminal charges. not only in connection
Meyer admitted wrongdoing also in connection
with the New York pay-to-play scheme, but scheme. duties NMSIC was
with the New Mexico pay-to-play admitted that had
on fund officials and other politically connected individuals who
Ihe I understood
al in connection
I had a fiduciary duty to act in interests of the Stale Mexico. On numerous occasions, however. contrary to my fiduciary duty, I ensured that Aldus recommended certain proposed investments that were pushed on me by politicallyconnected individuals in New Mexico. I did this knowing that these politically-connected individuals or their associates stood to benefit financially or politically from the investments and that the investments were not necessarily in the best economic interest of New Mexico.
2010, Aldus settled with the NY AG and agreed to pay restitution to
of $1 ,000,000 in cash and the forfeiture revealed of millions of dollars that Aldus had paid for Aldus.
the NYCRF through the payment in fees owed to Aldus. Morris over $300,000
The NY AG stated that its investigation in exchange
for securing pension fund investments
Individuals' Receipt of Improper Payments
individuals benefitted financially and politically from
Many politically-connected investments made by NMSIC.
in at least two
(I) in their capacity of fund managers.
agents;" and/or (2) in their capacity as to the
agent fees paid by the fund managers ly NMSIC'
In some instances,
Bland, Meyer and/or Aldus recommended
masked as a
In some to
entit of payments. The politically-connected
to caused sham
their to the
be drafted and entered into by those entities and the investment purported placement agent services to be performed
and amounts to be paid, and frequently individual to sign the agreement were improperly on behalf of dated "as of' or
caused a person other than the politically-connected the purported placement agent.
Many of these written agreements
an earlier date to make it appear that placement performed
agent services had been commenced individuals,
as of such earlier date. The politically-connected of other placement
at times, used entities
as "sub-agents" of payments.
agent firms in order to further disguise their improper receipt persons caused sham agreements to be
In such cases, the politically-connected sub-agents.
drafted and entered into by the purported 86. connection 87. In many instances, with the investments
did little or no work in
for which improper payments individuals
were received. payments for
The many politically-connected the pay-to-play
who received improper
in and facilitating
scheme include, but are not limited to, the
aided and abetted the pay-to-play connection
scheme and was unjustly enriched mcnts
by millions of dollars in
Asset LLC LLC ("SON employed as a Marc Correra personally. thousands Capital Markets own He was Ajax Investments,
as well as through his family and entities he controls. Richardson's political campaigns and political a political named
of dollars to Governor
action committees. action committee
Marc Correra served as Treasurer established by Governor Richardson.
of Moving America In 2004, Governor first "international
Marc Correra's wife, Claudia Correra, New Mexico's
protocol officer," a
part-time role that entitled Claudia Correra to $20,000 per year.
tenure as State Investment
Officer, Marc Correra received investments by NMSIC. LLC debt
in excess of $14,000,000 in connection
Correra received at least $5,500,000 of that total from Vanderbilt
("Vanderbilt") obligation in connection offerings. with NMSIC's Vanderbilt Crosscore investments
in six Vanderbilt
paid Marc Correra through an array of corporate Management, LLC and Cabrera Capital Markets. In
entities including SDN Advisors,
one instance, NMSIC invested $50,000,000 in a Vanderbilt value. Marc Correra received $2,000,000 in connection
CDO that rapidly lost nearly all of its to a sham
with that deal pursuant
defined as merely "providing nu contact Ion
the name, address, telephone
INMSIC and another state
In numerous placement the investment Marc Correra as a "sub-agent" drafted and executed agent was as the party who purportedly introduced
firm to NMSIC, and that third party placement pursuant to a separate agreement
agent in turn paid
that Marc Correra caused to be
to further conceal that he had received payments. Investors
For instance in 2004, Silver Creek Technologies NMSIC and Aldus to solicit NMSIC's investment
in the Silver Creek Ventures II, for Silver Creek, which was
L.P. private equity fund. Aldus's due diligence questionnaire
provided to NMSIC as part of the investment placement investment placement agent.
process, noted that Silver Creek was not utilizing a to obtain a NMSIC
Meyer told Silver Creek that it would be a prerequisite agent. Thereafter,
to hire Marc Correra as a placement agent agreement with SON Advisors,
Silver Creek entered into a
Marc Correra's firm, whereby SON Advisors to Silver Creek Ventures II,
would be paid a fee equal to 2% of NMSIC's
L.P. The agreement between SON Advisors and Silver Creek was dated "as of' an earlier date
to make it appear that SON Advisors NMSIC approved had been previously engaged by Silver Creek. Thereafter,
a $10,000,000 investment
in Silver Creek Ventures II, L.P. In Silver Creek's
the prospects to a for investment from the State of New Mexico." the In
sent Ventures II. L.P. ion
we made a presentation Committee." experienced 94.
s Private $188.333.
Silver Creek paid Marc Correra at
To date, NMSIC has
a negative rerum on its investment with Silver Creek. Marc Correra knew or willfully disregarded the fact that the primary reason investments was
Bland, Meyer and Aldus advised and directed NMSIC to make those alternative to serve their own interests and Marc Correra's
interests, in breach of their fiduciary duties to Marc Correra to conceal his receipt of
NMSIC, and therefore that his receipt of those payments was improper. knowingly took steps, including entering into "sub-agent" agreements,
those improper payments - and to conceal Bland's, Meyer's and Aldus's breach of their fiduciary duties - from any members of NMSIC without a disabling conflict of interest. Correra knowingly facilitated the pay-to-play Marc
scheme of Bland, Meyer and Aldus as a quid pro
quo for favors and benefits in New Mexico and elsewhere. 95. In an affidavit filed in connection with her divorce from Marc Correra, Claudia financial and legal until things
Correra stated that: "In 2009, Marc advised me that he was facing substantial problems.
He informed me that we needed to leave the United States temporarily
in connect bv -' Jackson is a investment management of Capital Point Partners, LLC ("Capital Point"), an securities to middle
firm in Houston,
Texas that provides "mezzanine" He serves on numerous pension system.
the United States.
public and private In addition to managing
boards, including the board of a municipal
funds through Capital Point, Jackson served as a placement
agent with at least two firms, Inroads
Group, Ltd., of which he is the founding partner, and Berean Capital, Inc.
Jackson is a longtime
Along with Riordan, Jackson
served as an officer of Si Se Puede Boston 2004, Inc. ("Si Se Puede"), a political action committee. Democratic Governor presidential Richardson, convention, who served as the convention chairman for the 2004 of the convention. to pay those in excess of campaign. to
formed Si Se Puede to pay the expenses Richardson raise the funds necessary
Jackson and Riordan helped Governor expenses. Although
a citizen of the State of Texas, Jackson personally gubernatorial campaigns
$9,000 to Governor Richardson's 99.
and 2008 presidential
Similar to his conduct towards Marc Correra. Bland at times recommended in contact NMSIC
one politically-connected for individuals who facilitated Private Equity Aldus's appointment
even though Aldus was a
s as as to curry Jackson in hopes that NMSIC
for Aldus, Meyer and Aldus recommended
which Jackson stood to receive payments, payments, Funds. and not primarily
primarily so that Jackson would receive those were in the best interest of the Public Trust
because the investments
In one instance, NMSIC invested SI 00,000,000 in Austin Capital Safe Harbor QP Fund, firm Berean Capital, Inc. In total, in connection with alternative
Ltd., generating payments of S2, 100,000 for Jackson's
Jackson secured in excess of S3,400,000 in such payments investments made by NMSIC. In connection with NMSIC's
in Austin Capital Safe Ltd. sought to and did
Harbor QP Fund, Ltd., the management remove from a draft side agreement was involved in the solicitation the 2009 NMSIO Questionnaire, it and the fund Capital, Inc.
firm Austin Capital Management,
any mention that Jackson on behalf of Berean Capital, Inc. However, several years later, in response to stated that Jackson had represented agreement paying Berean
of the investment.
Austin Capital Management the compensation
NMSIC and had negotiated
100,000. In a
Jackson, who was a majority owner of Capital Point.
reason B ments was to N Jackson of of their fiduciary interest. Jackson knowingly payments and to conceal Bland's. Meyer's and Aldus's to
from any members of NMSIC without a disabling conflict of facilitated the pay-to-play scheme of Bland, Meyer and Aldus as a
quid pro quo for favors and benefits in New Mexico and elsewhere. Weinstein and Schiff 105.
a placement "Wetherly"). enriched; Weinstein and Schiff were politically-connected Financial, individuals and the principals with its affiliates of
agent firm known as DA V/Wetherly Weinstein
and Schiff aided and abetted the pay-to-play
scheme and were unjustly with alternative
was paid more than $2,250,000 in fees in connection
made by NMSIC. Weinstein was a fund-raiser for various California politicians and had influence
with the California
System ("CaIPERS"). Retirement
Schiff was a former System ("LACERS"). identifying Schiff' In
director of the board for the Los Angeles City Employees'
2004, the Los Angeles City Ethics Commission
issued a memorandum LACERS board
a from the board two months thereafter. LACERS over the Wetherly clients received an additional two
in Wetherly, Meyer and Aldus. Wetherly entered into an administrative with the NY AG a payment $1,000,000 for to that it paid politically-
connected "sub-agent" placement agents in order to secure placement of the
Through Wetherly, Weinstein and Schiff
payments in connection with
several investments by NMSIC, and in several of those instances Wetherly split payments with Marc involvement into II whom Wetherly purported to investments New York as a "sub-agent" in an effort to conceal his period in which Wetherly entered
over the same
investment. AVP to the connection
Marc in its fund, including investments made by any other state CaIPERS, the
with any other investment
or municipal entity, including California Retirement State Teachers'
the North Carolina Department System ("CaISTRS"),
of State Treasurer,
and the New York City Employee with AVP has lost
System (HNYCERS"). half of its value.
To date, NMSIC's
approximately Ill. by CaIPERS,
In order to curry favor with Weinstein Meyer and Aldus recommended primarily
in hopes of securing
that NMSIC invest in deals on which Weinstein would receive those payments, and not
stood to receive payments, primarily
so that Weinstein
because the investments Weinstein
were in the best interest of the Public Trust Funds. the fact that the primary
and Schiff knew or willfully disregarded
reason Bland, Meyer and Aldus advised and directed NMSIC to make those alternative investments Schiff was to serve their own interests and the interests of Marc Correra, Weinstein and
in breach of their fiduciary duties to NMSIC, and therefore was
that their receipt of those
Weinstein and Schiff knowingly as a
scheme of Bland, Meyer and Aldus and
was and 114.
in the improper payments. Governor Gray Davis's Democratic
ilty to criminal
Ramirez served as former California
deputy chief of staff, campaigns. Ramirez
and served as a political consultant was an unlicensed
for a number of California
broker for Wetherly
and later a licensed broker for Park Hill Group, LLC. with at least eight alternative personally investments contributed by NMSIC. $5,000 to 2008
Ramirez received payments 115. Governor presidential committee campaign. 116. Ramirez,
a citizen of the State of California, 2002 gubernatorial Ramirez campaign
and $2,300 to Governor
approximately to Governor
$7,000 to a political action Richardson's 2008 presidential
that was the second largest contributor
Ramirez had a close relationship individuals who facilitated
with Meyer. Aldus's
was one of a handful of as NMSIC's
for its National Private Equity Program, even though Aldus was just a they worked together to benefit
fledgling firm. And, as both Ramirez and Meyer have admitted,
that between 2003 and 2006 he had entered into corrupt
as an unlicensed
on by the
Wetherly, entered into an
with Morris whereby Morris secured investments generated by those investments.
NYCRF in exchange for 40 percent of the placement Ramirez concealed Morris's role in those transactions,
and Ramirez funneled payments to Morris In particular, Wetherly by Morris.
to avoid creating a direct money trail between Wetherly and Morris.
issued checks to Ramirez, and Ramirez wrote checks to a shell company In 2004, Ramirez introduced
Morris to Meyer, who agreed to pay Morris 35 percent of fees paid by the NYCRF
on any deal with Aldus, and Morris thereafter secured a $175,000,000 investment in a fund managed by Aldus. he had done so. 119. In response to Ramirez's Ramirez shared in those fees. and concealed
from the NYCRF that
criminal plea, Attorney General Cuomo announced a matrix of corruption - which grows more
publicly that the investigation expansive and interconnected numerous industries."
by the day" and which "spans the United States and extends into Attorney General Cuomo cited the corrupt and Alan Hevesi.
In that same announcement,
deals among Ramirez/Wetherly
and Morris, Aldus, Meyer,
York. For example. on a NMSIC deal in LLC a
in Vincente Capital Advisors, LLC), paid "placement" with Aldus a potential
that LLC (formerly
On a later
ment Equity Fund that firm
known as Kline Hawkes Growth
to both Ramirez and Marc Correra. investment
had discussed involvement
by NMSIC, and had done so without the LLC to
of Ramirez or Marc Correra, Aldus directed Vincente Capital Partners, agreements from NMSIC. for the benefit of Ramirez and Marc Correra To date, NMSIC has experienced LLC. that NMSIC a negative
enter into "placement" secure an investment investment 121.
in order to return on its
Meyer and Aldus were willing to recommend
invest in deals for
which Ramirez stood to receive payments, payments, and not primarily
primarily so that Ramirez would receive those were in the best interest of the Public Trust
because the investments management
Funds, and even directed
firms that were already in contact with This was done in order to repay and to ensure that
NMSIC to enter into "placement" Ramirez for facilitating Aldus's
with Ramirez. as NMSIC's
Ramirez would continue to favor Aldus in
York by concealing
prior corrupt deals and
to serve their own interests and Ramirez's ipt interests, in breach of their fiduciary duties to NMSIC. was to
123. Riordan, another politically-connected substantially individual, aided and abetted the pay-towith alternative and fixed
play scheme and was enriched income investments 124. was associated Governor
and unjustly in connection
made by NMSIC. fund-raiser and friend of Governor contributed Richardson Richardson who
Riordan, a former Democratic with Wachovia Securities, gubernatorial
at least $41,560 to appointed Riordan as a
New Mexico State Game Commissioner. Se Puede, a political action committee. chairman for the 2004 Democratic
Along with Jackson, Governor Richardson, convention,
Riordan served as an officer of Si who served as the convention
formed Si Se Puede to pay the Richardson raise the funds
expenses of the convention. necessary
Jackson and Riordan helped Governor
to pay those expenses.
Along with Anthony Correra, Riordan served as a trustee of involved in hiring Bland B two would
Moving America Forward as the State Investment
and was a member of the search committee Riordan was a close friend
to Fort Washington Investment Advisors, Inc. (with its affiliates, including them Fort Washington as a
with Fort appointed Washington Fort as an investment advisor. Approximately agreement.
months later, Fort The agreement payments provided
and Riordan entered into a written solicitation would pay Riordan a percentage
that Fort Washington Washington.
of all of NMSIC's
In addition to acting as an investment
advisor, Fort Washington Fund.
also acted as a
fund manager for the New Mexico Co-Investment entitled under the agreement fund. to receive a percentage
Without doing any work, Riordan was fees from the
of all of Fort Washington's
In 2005, the SEC accused Riordan of paying kickbacks Michael Montoya
to former New Mexico After an evidentiary fraud, barred him
in return for state business for Wachovia. securities
hearing and an appeal, the SEC found that Riordan had committed from associating
with any broker or dealer, and ordered him to cease and desist from committing violations, to disgorge $938,353.78 (plus prejudgment interest)
or causing any future antifraud and to pay a civil monetary
penalty of $500,000, improper payments in connection with
Riordan, through Wachovia,
B appointed Fort Washington B as both an investment
advisor and a fund manager was to serve the
facilitated and in New Mexico.
Bland as a
130. Howell, another politically-connected substantially individual, aided and abetted the pay-towith alternative
play scheme and was enriched investments 131. made by NMSIC.
and unjustly in connection
Howell is a close friend of Meyer who also has served as a Democratic
raiser. Although a citizen of New York, Howell personally contributed
Richardson's 132. business. 133. NMSIC. Howell received payments in connection 2006 gubernatorial campaign.
$ 10,000 to Governor
In 2006, Howell traveled to New Mexico to meet with Marc Correra and discuss
with at least two investments
Those investments, payments
in funds named GSC Recovery
III, L.P. and InterMedia
VII, L.P., generated
for Howell in excess of $600,000.
The general partner of GSC
dec lared bankru pte y.
own funds to repay Howell for
Meyer and Aldus
that NMSIC invest in Howell's
Howell's connection "placement with NMSIC investments in in fund. GSC Recovery an investment investment
III, LP. stated in 2005 that no Three years later,
agent" had been enlisted
after NMSIC had approved Recovery stated in response
in the GSC Recovery
III, LP. fund, GSC
to the 2009 NMSIO Questionnaire agent" in connection with NMSIC's
that Howell received $450,000 investment in that fund.
for "acting as a placement 136.
The other investment
fund, Intet Media Partners VII, LP., is managed by in excess of
Interlvledia Partners, LP., a principal of which, Leo Hindery, Jr., contributed
$50,000 to Governor agreement connection consideration $30,000,000 Richardson's campaigns. InterMedia Partners,
LP. entered into an agent fees in
with Howell and PEC, effective February 2006, to pay placement with NMSIC investments to an investment
in the fund. Bland asked Meyer to give special in InterMedia Partners VII, LP., and NMSIC invested in response to the 2009 in
in that fund. InterMedia
Partners, L.P. acknowledged
NMSIO Questionnaire connection
that Howell had been paid $ I 50,000 for "consulting investment.
or any New Mexico investment," has never had "contact with any governmental
officials of the
an due d
ment lin on
I in the future:'
138. Howell has acknowledged making payments to Marc Correra. In his June 9, firm, SON by
II, affidavit, Howell swore that: (1) GSC Recovery III contacted Marc Correra's Advisors, when an unspecified "issue" arose "before the investment "assistance
was finally approved"
NMSIC; (2) SON Advisors provided unspecified in seeking a commitment
... on behalf of GSC Recovery III" "[playrnents by
from NMSIC; (3) after NMSIC made that investment,
GSC Recovery III to SDN Advisors for this service were made through Monroe Street, LLC, a Florida limited liability company" Consultant which had "assumed the obligations of Pension Enhancement
[sic J under its agreement to act as a consultant to GSC Recovery III;" (4) Howell is Howell "personally
"the managing member" of Monroe Street, LLC; and (5) on two occasions,
funded the payments for Monroe Street, LLC [to SON Advisors], on behalf of GSC Recovery II!.'" 139. Howell knew or willfully disregarded the fact that the primary reason Bland, investments was to
Meyer and Aldus advised and directed NMSIC to make those alternative serve their own interests and Howell's
interests, in breach of their fiduciary duties to NMSIC,
with multiple Capital Fund III
by NMSIC, including and the Optima Fund Limited ("Optima"), Rosen through Diamond Edge Capital Partners, After Rosen approached senior members of
$300,000 and 8900,000 in of which he is a
Governor Richardson's staff, Anthony Correra instructed Bland, Meyer and/or Aldus to advise and direct NMSIC to investments for which Rosen stood to agreements for deals were payments. by a Diamond
The placement named Lori
did not mention Rosen. However, two
to a reason was to serve and Rosen's
to NMSIC, and to
was improper. Rosen knowingly took - and to
Bland's, Meyer's and Aldus's
- from Rosen
NMSIC without a disabling conflict
facilitated the pay-to-play scheme of Bland, Meyer and Aldus as a in New Mexico and elsewhere.
for favors and
Daniel individual and son Alan
in of That no ment "for 'NM'." of Daniel s involvement.
Hevesi later thanked Meyer personally
Meyer and Aldus were willing to give special consideration on which Daniel Hevesi stood to receive payment
to potential NMSIC
so that Daniel Hevesi would favor corrupt relationship with
Meyer and Aldus in New York and provide protection
in case Aldus's
Morris soured, and Aldus would need to curry favor directly with Alan Hevesi.
Daniel Hevesi knew or willfully disregarded
the fact that the primary reason investments was
Bland, Meyer and Aldus advised and directed NMSIC to make those alternative to serve their own interests and Daniel Hevesi's NMSIC, and therefore knowingly Bland's,
interests, in breach of their fiduciary duties to was improper. Daniel Hevesi and to conceal
that his receipt of those payments
took steps to conceal his receipt of those improper payments Meyer's and Aldus's
breach of their fiduciary duties - from any members of NMSIC Daniel Hevesi knowingly facilitated the pay-to-play in New Mexico and
without a disabling conflict of interest.
scheme of Bland, Meyer and Aldus as a quid pro quo for favors and benefits elsewhere.
made by N1VfSIC.
detailed supra, Morris was one of the principal perpetrators
151. company with at least two alternat funds managed by Carlyle Investment Investors II, L.P. ("Quadrangle"). investments Management, stood to by NMSIC payments Those investments and Quadrangle agreement
were in GP
Carlyle entered into a "placement"
with Searle &
Co. after Aldus had conducted connection with that fund.
its due diligence on the fund at issue, and Morris did no work in Carlyle failed to agreement on behalf of
In response to the 2009 NMSIO Questionnaire, of the remuneration agreement
disclose Morris as the contact person and negotiator Searle & Co. Quadrangle with any commitment because Morris's 152. investments management entered into a "placement"
with Searle & Co. in connection refused to pay Searle & Co.
but after it secured the investment
did not perform any work to earn a fee. to potential NMSIC investment
Meyer and Aldus were willing to give special consideration on which Morris stood to receive payment, firms to enter into "placement" agreements and even directed
with Morris, in order to ensure that prior corrupt deals and
Morris would continue to favor Aldus in New York by concealing new deals among Aldus, Ramirez and Morris.
therefore that his receipt
was improper. to
Morris knowingly B
took steps to and
dut il pro Wissman
Wissman, another politically-connected substantially Wissman individual,
aided and abetted the pay-towith alternative
play scheme and was enriched investments made by NMSIC
and unjustly in connection
was also involved in the New York scheme and pled
gu ilty to criminal charges of making improper payments. 155. ("HFV"), Wissman, manager of the Dallas-based fraud in connections in kickbacks hedge fund Hunt Financial with investments Ventures
pled guilty to securities
made by the NYCRF. for which Morris was to
Wissman acknowledged secured investments paid for purportedly Morris and concealed $12,000,000 agreement,
to Morris, in exchange
by the NYCRF
On other deals, Wissman
serving as a placement
agent, and he funneled a share of those payments Wissman agreed to forfeit In announcing
that Morris had received those payments.
to the State of New York, and he faces criminal sentencing.
the NY AG press release stated that "[tlhe charges to date allege a complex criminal individuals operating at the highest political and governmental
scheme involving numerous levels under Comptroller
Hevesi, in which the State pension fund was used as a piggy bank for
quid pro quo to secure NMSIC investments
in at least three of Wissman's
hedge funds, Fund Ltd.
or and serve their own
reason Bland, was to in breach of their was improper.
and the interests of Wissman and Marc Correra, and therefore
fiduciary duties to NMSIC, Wissman knowingly
that his receipt of those payments
took steps to conceal his receipt of those improper and Aldus's breach of their fiduciary duties Wissman knowingly
payments - and to from any members of
NMSIC without a disabling
conflict of interest.
scheme of Bland, Meyer and Aldus as a quid pro quo for favors and benefits in New Mexico and elsewhere.
158. Broidy, another politically-connected substantially individual, aided and abetted the pay-towith at least one
play scheme and was enriched alternative investment
and unjustly in connection
made by NMSIC.
Broidy was also involved in the New York pay-to-play
scheme and pled guilty 159.
charges of making improper payments. of California-based venture fund Markstone chairman for the Republican
Broidy, founder and Chairman
Capital Group LLC ("Markstone"),
is a former finance committee
paid Aldus $1,000,000
per year in consulting
In 2009, after his LAFPP trusteeship role
NMSIC criminal 161. of up to four In his criminal
$1 in prison.
York. and he
plea allocution, treatment
Alan Hevesi stated that, in approving to Markstone
by the NYCRF, he gave "preferential mine and political fundraiser $1 million," including
and Broidy, who was a friend of to nearly as
for my campaign"
and who "paid benefits amounting contributions
making or arranging staff.
in excess of $500,000"
directed by Hevesi and his campaign efforts to market Markstone 162. In response
In return, Hevesi "also sought to help Broidy in his other public pension funds to invest in Markstone." in 2003, which was provided to any
to a due diligence questionnaire investment, Markstone investment
NMSIC in connection placement
stated that it was not engaging by NMSIC. Nonetheless,
agent in connection
with any potential
and Markstone Richardson's
paid a "placement" administration,
fee to Carr as directed by Bland or someone investment
within Governor in Markstone. a payment of laws.
as a quid pro quo to obtain NMSIC's of a registered broker-dealer,
Carr was not a registered a placement
agent fee by Broidy to Carr violated federal and New Mexico securit
d Meyer and Aldus directed Broidy's NMSIC to make that alternative investment rr
B was to serve their own duties to NMSIC, and
pro quo Carr
favors and benefits
in New Mexico and
Carr, another politically-connected and unjustly
aided and abetted the pay-to-play with at least one alternative
scheme and was enriched substantially investment 165. Governor made by NMSIC.
Carr, a former Congressman They served together representative
is a close friend and supporter
in the U.S. House of Representatives. broker-dealer.
never been a registered 166. investment
of a registered
In May 2003, Markstone in a private equity fund.
was in the process of soliciting
NMSIC for an Markstone about that stated
In a due diligence questionnaire
that it was not using a placement Broidy and Markstone information to Bland.
Later that year, Carr forwarded Richardson'
to a member of Governor Carr then contacted Thereafter,
s staff, who in turn forwarded
Bland directly, describing
himself as "[a] friend of
was brought to bear on Bland to
with the same NMSIC
reason B in
was and to conceal Bland's disabling breach of his fiduc Carr knowingly facilitated
receipt from any members the pay-to-play of NMSIC scheme of Bland as a
conflict of interest.
quid pro qllo for favors and benefits 168.
in New Mexico and elsewhere. above were designed not to
The actions of Bland, Meyer and Aldus described
further the interests of NMSIC, own adverse personal above, to the detriment play scheme described disabling
the Public Trust Funds and their beneficiaries,
but to further their referenced The pay-to-
interests and interests of the politically-connected of NMSIC,
the Public Trust Funds and their beneficiaries.
above was not disclosed
to NMSIC members who did not have a
conflict of interest.
FIRST COUNT (Breach of Fiduciary Duty Against Bland, Meyer and Aldus)
169. Plaintiff repeats and realleges the allegations as if fully set forth herein. Aldus duties to the Public contained in paragraphs I through
168 of this Complaint
named herein, rather than based solely on the best
trust funds, the cit providing duties, 173. substantial assistance and encouragement
to Meyer and Aldus to breach their fiduciary
Meyer and Aldus knew that Bland owed fiduciary duties to the Public Trust of those trust funds, the citizens of New Mexico.
Funds and the beneficiaries 174.
Meyer and Aldus further breached their fiduciary duties to the Public Trust Funds of those trust funds, the citizens of New Mexico, substantial assistance and encouragement by knowingly and
and the beneficiaries intentionally duties. 175. Meyer's
to Bland to breach his fiduciary
The Public Trust Funds and their beneficiaries breaches of their fiduciary duties.
have been damaged
and Aldus's 176.
Bland, Meyer and Aldus breached
their fiduciary duties in a manner that was
willful, wanton, reckless and oppressive.
SECOND COUNT (Breach of Contract Against Aldus)
advice and other services to NMSIC when it had an interest that conflicted
with the best
THIRD COUNT (Aiding and Abetting Breach of Fiduciary Duty Against Riordan, Marc Correra, Anthony Correra, Jackson, Weinstein, Schiff, Ramirez, Wissman, Howell, Rosen, Daniel Hevesi, Broidy, Carr and Morris) 180. Plaintiff repeats and realleges the allegations contained in paragraphs I through
179 of this Complaint as if fully set forth herein. 181. Riordan, Marc Correra, Anthony Correra, Jackson, Weinstein, Schiff, Ramirez,
Wissman, Howell, Rosen, Daniel Hevesi, Broidy, Carr and Morris (collectively the "Aiding and Abetting Defendants") knew that Bland, Meyer and Aldus owed fiduciary duties to the Public Trust Funds and the beneficiaries of those trust funds, the citizens of New Mexico. 182. The Aiding and Abetting Defendants aided and abetted Bland's, Meyer's and
Aldus's breaches of their fiduciary duties to the Public Trust Funds and the beneficiaries of those trust funds, the citizens of New Mexico, by knowingly and intentionally providing substantial assistance and encouragement to Bland, Meyer and Aldus in connection with one or more alternative investments made by NMSIC. 183. The Public Trust Funds and their beneficiaries have been damaged by the Aiding Bland's,
and Abetting Defendants'
FOURTH COUNT (Unjust Enrichment Against All Defendants Except Aldus)
Plaintiff repeats and
185 of this Complaint 187. detriment
as if fully set forth herein. knowingly unjustly enriched themselves at the expense of and to the
of the Plaintiff, Defendants'
the Public Trust Funds and the citizens of the State of New Mexico. retention of monies wrongfully collected, directly and indirectly,
from the Plaintiff, the Public Trust Funds and the citizens of the State of New Mexico violates fundamental principles of justice, equity and good conscience. as follows:
WHEREFORE, 1. 2. 3. 4.
Plaintiff prays for relief and judgment damages.
of moneys unjustly obtained.
Punitive damages. Statutory interest. and just.
Such other and further relief as this Court may deem necessary
Scott Fuqua Assistant Attorney General P.O. Drawer I Santa New Mexico 87504 (505) 827-6920 (505) 827-5826 (Fax)
Special Assistant Attorneys General Jeffrey Plotkin Kenneth W. Ritt Clifford E. Nichols III Matthew E. Smith Day Pitney LLP One Canterbury Green Stamford, Connecticut 0690 I (203) 977-7300 (203) 977-7301 (Fax)
Attorneys for Plaintiff
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue reading from where you left off, or restart the preview.