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Tuesday, December 15, 2009
Feds Ban Riordan for Life
By Mike Gallagher / Journal Investigative Reporter
The full Securities and Exchange Commission has permanently banned Guy Riordan, a political supporter and former close associate of Gov. Bill Richardson, from the securities industry and ordered him to pay $1.5 million in penalties.
The case stems from SEC Enforcement Division charges that Riordan, a securities broker whom Richardson appointed as State Game Commission chairman, made cash payments to former state Treasurer Michael Montoya in exchange for state business.
"Riordan's conduct was serious and recurrent," the commission found. "Riordan engaged in fraudulent conduct spanning a seven-year period and involving a total of 80 transactions."
Riordan at one time was close to the governor. The two hunted on Riordan's private preserve and attended sporting events such as boxing matches, the Super Bowl and World Series together.
When allegations against Riordan surfaced during the federal corruption trial of another former state treasurer, Robert Vigil, the governor fired him from his Game Commission post and gave more than $44,000 in contributions from Riordan to charity.
Riordan later claimed he was threatened by the FBI for failing to give evidence against Richardson, whom he considered one of his closest friends.
Riordan retired from the securities industry in 2007, but the commission barred him permanently because of the seriousness of his violations of federal regulations. The commission also ordered Riordan to pay more than $900,000 plus interest and $500,000 in a civil penalty to the state Treasurer's Office.
Riordan's attorney, Robert Gorence, was out of the office Monday and did not return a message left by the Journal with his office.
The SEC ruling supports the findings of an administrative-law judge in the case, who found that evidence established "over a seven-year period, Riordan made secret cash payments to Montoya in exchange for Montoya selecting Riordan's bids" for the purchase and sale of securities.
The commission found that Montoya "rigged" bids to favor Riordan and that as a result, Riordan won 18 of 29 bids on securities deals in 20001 and 2002.
Riordan appealed the administrative-law judge's decision to the full commission, arguing that Montoya fabricated the story about the cash payments after Montoya was arrested in 2005 for his involvement in a different kickback scheme.
Montoya pleaded guilty in that case and was sentenced to 40 months in federal prison after testifying in the trial of Vigil, his successor as treasurer.
But the commission found the FBI already was aware of the Riordan kickbacks from two informers before Montoya's arrest and that Montoya's story was consistent with the versions given by the informers.
The commission found that "Riordan's conduct in continuing to do business with Montoya, despite his knowledge that Montoya was, in his words, 'crooked,' and in failing to notify the appropriate authorities of the kickback scheme and corruption in the (Treasurer's Office), is further evidence that Riordan ... paid Montoya secret cash kickbacks in exchange for (Treasurer's Office) securities transactions."
Riordan argued the state was not harmed by his getting the state's business, but the commission ruled that Riordan was awarded state business when he had the "worst bids among his competitors."
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