x

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,
vs.

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

Defendants.

---c---------------------------------------------------------------------x
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

IS

citizens of the State of New Mexico for an unlawful "pay-to-play" scheme perpetrated by the

B
ment

an

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

5.

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

6.

profited from this pay-to-play make restitution.

scheme have been unjustly enriched

and should be required to

THE PARTIES

are Constitution for the benefit of the citizens of New Mexico, the real party in interest.

8.

LGPF is

9. w
on public lands. 10. $15,000,000,000. II. 12. 13.

STPF is severance taxes on the oil and from

IS

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.

14.
15. 16.

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.

17.
18. 19.

Alfred Jackson ("Jackson") Daniel Weinstein

("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

21.

Defendant

Daniel Hevesi is a citizen of the State of New York. Elliott is a

IS

a

IS

a

In
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

commission engaged

in tortious

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.

FACTUAL BACKGROUND

State Investment

Officer and third-party

investment

advisors.

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

Alternative

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

management

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

irnate

When the investor is a public pension or public trust fund, there is a danger that people make and to

to

~ will

in connect

with
to

t

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,

43.

According

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

Beginning

in 2003, Alan Hevesi, Morris and Loglisci

a

ill

Those investment management or

firms paid millions of dollars to Morris and others in the form of
III

to

ments

all

to

In

to a term to to
lS

a term

m
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.

x

itut

statutes,

B

as

mem

NMSIC

was a co-trustee a

trust assets Legislat 51. In 10 removed the State Investment

In

Interests.

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

display, throughout

the administration

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

financial or

Richardson's

personal

friend, fund-raiser

and

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

Richardson's involved

2006 gubernatorial
in hiring Bland.

campaign.

Anthony Correra was a member of the search committee

B

s tenure,

f

B

Funds' alternative

investment

portfolio.

In fact, during the early stages of Bland's

tenure,

at nu

as

as a state-

an In I options of various companies former stockbroker department permanently securities the while in

he

had a

as a

with trading in stock and of inside information he obtained from a

who received

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

consultant

and gatekeeper.

and often requested

Richardson,

Anthony Correra investments

instructed,

and/or suggested

that Bland cause NMSIC to make alternative individuals,

that would benefit

politically-connected contributions,

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

connection

with a substantial were not in

number of NMSIC alternative

investments,

even if those to

if Marc

to

to in

that had

or

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

a new

for

it

NMSIC was A

s

and

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

Services

Contract

with Aldus

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

investment

in private equity funds, including the about specific potential

and the presentation

of recommendations

Over the course of Aldus's

engagement,

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

Services

Contract,

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

damages,

costs, expenses,

legal fees and liability in

an
w

or

that cit

in

manner or

met with on behalf Governor

on numerous or that

to cause

would often instruct, in certain private equity funds.

NMSIC to make investments

68.
cash payment

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
with Anthony

payment and other gifts both to reward actions already taken by Meyer consistent

Correra's instructions,
actions consistent

requests and suggestions

and to encourage

Meyer to take additional

with Anthony

Correra's instructions,

requests and suggestions. Meyer and Aldus caused politically-connected agent firms.

69.

With Bland's

knowledge, investments

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

these investments

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

71.

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

I

2009, the

a

m

that Aldus

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

74.

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

75.
complaint

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

were motivated

In

al in connection

Ions

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.

80.

In December

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

Politically-Connected 81.
alternative

Individuals' Receipt of Improper Payments
individuals benefitted financially and politically from

Many politically-connected investments made by NMSIC.

82.
ways:

Politically-connected

individuals

received

improper

payments

in at least two

(I) in their capacity of fund managers.

as so-called

"placement

agents;" and/or (2) in their capacity as to the

principals

The placement

agent fees paid by the fund managers ly NMSIC'

to

In some instances,

Bland, Meyer and/or Aldus recommended

to investment

a political

indiv

masked as a

In some to

B
to a

entit of payments. The politically-connected

In

to caused sham

their to the

individuals

be drafted and entered into by those entities and the investment purported placement agent services to be performed

managers

to memorialize

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

the politically-connected

individuals

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
w

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,

90.
contributed

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

Forward.

Richardson

Marc Correra's wife, Claudia Correra, New Mexico's

protocol officer," a

part-time role that entitled Claudia Correra to $20,000 per year.

91.
payments

During Bland's

tenure as State Investment

Officer, Marc Correra received investments by NMSIC. LLC debt

in excess of $14,000,000 in connection

with alternative

Correra received at least $5,500,000 of that total from Vanderbilt
("Vanderbilt") obligation in connection offerings. with NMSIC's Vanderbilt Crosscore investments

Capital Advisors,

in six Vanderbilt

collateralized

("CDO")

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

to Vanderbilt

the name, address, telephone

INMSIC and another state

or no

1!1

merH

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

93.
approached

For instance in 2004, Silver Creek Technologies NMSIC and Aldus to solicit NMSIC's investment

C'Silver Creek")

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

capital commitment

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

h
the prospects to a for investment from the State of New Mexico." the In

nature

S

sent Ventures II. L.P. ion
our

m

we made a presentation Committee." experienced 94.

to

of

s Private $188.333.

Investment

Advisory

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

Jackson

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.

market companies

throughout

the United States.

public and private In addition to managing

boards, including the board of a municipal

employees

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.

98.

Jackson is a longtime

Democratic

fund-raiser.

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

contributed

$9,000 to Governor Richardson's 99.
investment

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

a

as NMSIC's

even though Aldus was a

on

a

101.
NMSIC's additional

to

s as as to curry Jackson in hopes that NMSIC

ment as

advisor/consultant, investments

for Aldus, Meyer and Aldus recommended

invest in

on

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

102.

SIOO,OOO,OOO investment

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.
to

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
In

Ie.
Jackson, who was a majority owner of Capital Point.

to

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

LP (collectively

and Schiff aided and abetted the pay-to-play

scheme and were unjustly with alternative

Wetherly

was paid more than $2,250,000 in fees in connection

investments

made by NMSIC. Weinstein was a fund-raiser for various California politicians and had influence

106.

with the California

Public Employees'

Retirement

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
as a

issued a memorandum LACERS board

a from the board two months thereafter. LACERS over the Wetherly clients received an additional two

$30,000,000 in

at

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

109.

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

a

an

I to

a

in turn

Into a

to

investment. AVP to the connection

In
Investments, pro
(lllO

LLC.
to

payment

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,

Retirement

and the New York City Employee with AVP has lost

System (HNYCERS"). half of its value.

To date, NMSIC's

investment

approximately Ill. by CaIPERS,

In order to curry favor with Weinstein Meyer and Aldus recommended primarily

in hopes of securing

investments

in Aldus

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

112.

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

facilitated

the pay-to-play

scheme of Bland, Meyer and Aldus and

Ramirez
II

was and 114.

in the improper payments. Governor Gray Davis's Democratic

pay-to-play

ilty to criminal

of receiving

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,

in connection

a citizen of the State of California, 2002 gubernatorial Ramirez campaign

Richardson's campaign.

and $2,300 to Governor

Richardson's

also contributed

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

Ramirez

was one of a handful of as NMSIC's

politically-connected advisor/consultant

appointment

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,

NYCRF.

Ramirez admitted

that between 2003 and 2006 he had entered into corrupt

to

III

118.

met his
rr'p'n1,,>nt

Richardson

as an unlicensed

on by the

f

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

incorporated

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."

had "uncovered

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,

mvestments Aurora

in

York. For example. on a NMSIC deal in LLC a

an investment

management

nor

were was

to
111

in Vincente Capital Advisors, LLC), paid "placement" with Aldus a potential

that LLC (formerly

On a later

an

ment Equity Fund that firm

known as Kline Hawkes Growth

to both Ramirez and Marc Correra. investment

Although

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

with Vincente

Capital Partners,

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

investment

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

agreements appointment

with Ramirez. as NMSIC's

advisor/consultant

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

h

rece

for

Riordan
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

LLC ("Wachovia"),
Governor

at least $41,560 to appointed Riordan as a

Richardson's

campaigns.

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

presidential

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

Officer.

R
to Fort Washington Investment Advisors, Inc. (with its affiliates, including them Fort Washington as a

LLC,

could

Bland

10 to

with Fort appointed Washington Fort as an investment advisor. Approximately agreement.

at the

Bland

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

to Fort

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

127.
State Treasurer

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

128,

Riordan, through Wachovia,

in

B appointed Fort Washington B as both an investment
Il1

advisor and a fund manager was to serve the

R

B

dut

to NMSIC

s

s

was

facilitated and in New Mexico.

Bland as a

pro quo

Howell
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

fund-

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

by Partners

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.

111

own funds to repay Howell for

Meyer and Aldus

recommended

that NMSIC invest in Howell's

Howell's connection "placement with NMSIC investments in in fund. GSC Recovery an investment investment

to

111

III, LP. stated in 2005 that no Three years later,

agent" had been enlisted

from NMS[C

after NMSIC had approved Recovery stated in response

a $30,000,000

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

by NMSIC

in that fund. InterMedia

Partners, L.P. acknowledged

NMSIO Questionnaire connection

that Howell had been paid $ I 50,000 for "consulting investment.

services"

with NMSIC's

or any New Mexico investment," has never had "contact with any governmental
not
1I1

to

officials of the

an due d

ment lin on
111

III. LP.I,

He

sworn

occasion

to

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,

Ie

L

with multiple Capital Fund III
nPl'XfPI'rl

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

LLC ("Diamond

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

a
to I

to a reason was to serve and Rosen's
Un1'A"r<'

as

their

to NMSIC, and to

was improper. Rosen knowingly took - and to

Bland's, Meyer's and Aldus's

- from Rosen
pro

members

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 Hevesi
Daniel individual and son Alan

investment

in of That no ment "for 'NM'." of Daniel s involvement.

an Daniel

Hevesi later thanked Meyer personally

148.
investments

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.

149.

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.

Morris

investments

made by N1VfSIC.

detailed supra, Morris was one of the principal perpetrators

of

to
to to
!!1

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

in

were in GP

LLC ("Carlyle")

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.

by NMSIC,

but after it secured the investment

company

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.

In

10

therefore that his receipt

those payments

was improper. to

Morris knowingly B

took steps to and

dut il pro Wissman
Wissman, another politically-connected substantially Wissman individual,
In

a

a
and

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,

paying $600,000

to Morris, in exchange

by the NYCRF

in Wissman's

fund HFV.

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.

that plea

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

HFV

quid pro quo to secure NMSIC investments
HFV Mull

in at least three of Wissman's

hedge funds, Fund Ltd.

Li

TAG Relat

Offshore

ly

in connect

or and serve their own

Ily
to

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

conceal Bland's,

Meyer's

NMSIC without a disabling

conflict of interest.

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.

Broidy
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.
to

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

became

an

LAFPP.

In to

to a

!!1

m
fund in

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

investments

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.

"campaign

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

by encouraging

to a due diligence questionnaire investment, Markstone investment

NMSIC in connection placement

with NMSIC's

stated that it was not engaging by NMSIC. Nonetheless,

agent in connection

with any potential

Broidy

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

representative

and therefore

agent fee by Broidy to Carr violated federal and New Mexico securit

m

d Meyer and Aldus directed Broidy's NMSIC to make that alternative investment rr

B was to serve their own duties to NMSIC, and

s

In

s

was

to

the

and

as a

pro quo Carr
164.

favors and benefits

in New Mexico and

Carr, another politically-connected and unjustly

individual,

aided and abetted the pay-to-play with at least one alternative

scheme and was enriched substantially investment 165. Governor made by NMSIC.

in connection

Carr, a former Congressman They served together representative

from Michigan,

is a close friend and supporter

of

Richardson.

in the U.S. House of Representatives. broker-dealer.

Carr has

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

response,

that it was not using a placement Broidy and Markstone information to Bland.

agent.

Later that year, Carr forwarded Richardson'

information

to a member of Governor Carr then contacted Thereafter,
In

s staff, who in turn forwarded

Bland directly, describing

himself as "[a] friend of

Bill Richardson

& yours."

political pressure

was brought to bear on Bland to

a NSMIC

to ensure

s

In

connection

with the same NMSIC

investment.

or

that

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

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,

individuals

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

Bland, Meyer

and their

including Defendants

named herein, rather than based solely on the best

I l.

res

to

trust funds, the cit providing duties, 173. substantial assistance and encouragement

by

and intent

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

providing

to Bland to breach his fiduciary

The Public Trust Funds and their beneficiaries breaches of their fiduciary duties.

have been damaged

by Bland's,

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

IC

s

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'

B duties.

In

w

B
FOURTH COUNT (Unjust Enrichment Against All Defendants Except Aldus)

186.

Plaintiff repeats and

the allegations

contained

in paragraphs

I through

185 of this Complaint 187. detriment

as if fully set forth herein. knowingly unjustly enriched themselves at the expense of and to the

Defendants

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,

188.

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.

Compensatory Restitution

and disgorgement

of moneys unjustly obtained.

Punitive damages. Statutory interest. and just.

5.

Such other and further relief as this Court may deem necessary

II

Scott Fuqua Assistant Attorney General P.O. Drawer I Santa New Mexico 87504 (505) 827-6920 (505) 827-5826 (Fax)

and

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

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