Thursday, May 14, 2009
'Matrix of Corruption'
By Mike Gallagher
Journal Staff Writer
An unlicensed placement agent who pleaded guilty in New York to securities fraud this week was involved in four New Mexico investments that have come under scrutiny here.
New York Attorney General Andrew Cuomo announced that Julio Ramirez, 48, of San Marino, Calif., pleaded guilty to a state charge of securities fraud in the ongoing New York State pension fund scandal.
Like many of the New York players, Ramirez has connections to investments made by the New Mexico State Investment Council and the Educational Retirement Board.
Ramirez shared in $1.5 million in third-party fees paid in connection with the four New Mexico deals and, on at least two of them, shared the money with Marc Correra, a Santa Fe placement agent who is the son of a close friend and supporter of Gov. Bill Richardson's.
Cuomo, in announcing the Ramirez plea, said his investigation "has uncovered a matrix of corruption which grows more expansive and interconnected by the day."
"The web of corruption spans the United States and extends into numerous industries," Cuomo said.
According to records provided to the Journal, Ramirez is listed as a placement agent on State Investment Council investments totaling $70 million in three private equity funds between 2005 and 2007.
He shared in $1.3 million in finder's fees on those deals.
In addition, Ramirez was a placement agent on a $10 million investment made by the Educational Retirement Board in 2007. He shared $200,000 in fees paid in that deal with Correra, records show.
Ramirez pleaded guilty to involvement in a series of transactions in which New York political adviser Henry "Hank" Morris is accused of receiving payments in return for placing retirement fund investments with firms represented by Ramirez.
In some cases, Ramirez served as a middle man for payments from other placement agents to Morris, according to court records.
Ramirez is cooperating with New York authorities, according news reports.
The New Mexico investments connected to Ramirez are among those legislators and Gov. Richardson agree should be audited.
Ramirez and Correra shared in a $500,000 fee for a $25 million investment in KH Growth fund made by the State Investment Council in 2007 and in a $200,000 fee for a $10 million investment made by the ERB in the same year.
The two deals were completed while Dallas-based Aldus Equity Partners was advising the SIC and ERB on private equity fund investments.
In New York, Ramirez introduced Aldus Equity's founding partner, Saul Meyer to Morris, then allegedly shared in the kickbacks Meyer paid to Morris for New York pension fund business.
Meyer and Morris have pleaded not guilty to the New York charges.
Aldus has denied any wrongdoing, but Richardson has ordered both the SIC and ERB to fire the company from its $1.5 million advisory position.
Marc Correra has been at the center of the investment controversy in New Mexico.
He is the son of Anthony Correra, a retired stockbroker from New York who agreed to surrender his license in connection with insider trading allegations. The two share a Santa Fe business address.
Anthony Correra was on Richardson's transition team and a member of the search committee that led to the hiring of Gary Bland as State Investment Officer.
Marc Correra is also one of the principals seeking a state license to open a racino in Raton.
Records show that he was involved as a placement agent and shared in more than $11 million on nearly two dozen investment deals with the State Investment Council, which is appointed and chaired by Richardson and run by Bland.
Marc Correra shared in more than $4 million in fees for investments made by the ERB.
He has not been charged with any wrongdoing. His Albuquerque attorney, Sam Bregman, said Wednesday he had no comment.
Marc Correra's attorney in New York told The New York Times last week that his client worked hard for his fees and wanted to follow the law.
Ramirez is the second person to plead guilty in the New York scandal.
Dallas hedge fund executive Barrett Wissman, who acted as a placement agent in New York and received millions of dollars in fees, pleaded guilty last month to state securities fraud charges.
He also had a connection to New Mexico, where his hedge fund received investments totaling $150 million from the State Investment Council and Educational Retirement Board in 2005 and 2006.
State records list Marc Correra as the placement agent for the $100 million deal with Wissman's hedge fund and payment of a $900,000 fee.
The ERB records don't show a placement agent for the board's $50 million investment.
Both the ERB and SIC became disenchanted with the hedge fund's management and withdrew the state money.