View Full Version : Pension-fund manager Navnoor Kang accused of drug-fueled sexcapades ordered to stay sober

The Bobster
12-21-2016, 06:05 PM

Pension fund manager busted in drug-fueled pay-to-play scheme
By Lia Eustachewich and Bruce Golding
December 21, 2016 | 12:05pm | Updated

Navnoor Kang

A crooked New York pension official — hired by state Comptroller Thomas DiNapoli despite a shady past — steered billions of dollars worth of securities trades to a pair of brokers in exchange for bribes of sex, drugs and rock ‘n’ roll, the feds charged Wednesday.

Navnoor Kang allegedly got treated to romps with hookers, piles of cocaine and VIP tickets to a Paul McCartney concert as part of a pay-for-play scheme involving the retirement accounts of government workers, cops and firefighters.

Other payoffs cited by the feds include visits to strip clubs, $25,000 worth of “bottle service” at lounges, luxury vacations in New Orleans and Park City, Utah, a $17,400 Panerai watch and a $4,200 Hermes bracelet for his girlfriend.

Kang, 37, was put in charge of a $50 billion, fixed-income investment portfolio in January 2014 despite having been fired from his previous job for nearly identical ethical breaches, court papers say.

The failed tennis-player-turned financial exec allegedly accepted at least 55 improper gifts — including an $8,000 Rolex watch and $1,200 worth of Rolling Stones concert tickets — while employed as a vice president at the prestigious Guggenheim Partners investment firm.

Court papers say Kang “lied about the reason he was terminated” during his job interview with the New York State Common Retirement Fund.

DiNapoli’s office wouldn’t say what — if anything — it did to verify Kang’s claims at the time.

“We are currently doing a thorough review of his hiring process. A criminal background check was undertaken, including fingerprinting, before he was hired,” a DiNapoli spokesman said.

Kang, who was fired by the state in February, was busted Wednesday in his new hometown of Portland, Ore., on charges including conspiracy, securities fraud and obstruction of justice.

The five-count indictment filed against him in Manhattan federal court also targeted broker Deborah Kelley, 58, who surrendered to the feds in San Francisco.

Another broker, Gregg Schonhorn, 45, of Short Hills, N.J., secretly pleaded guilty on Dec. 15 as part of a cooperation deal in which he pulled off a sting against Kang involving the Panerai watch, Manhattan U.S. Attorney Preet Bharara said.

In addition to criminal charges, all three were also slapped with a civil suit by the Securities and Exchange Commission.

Kang knew both Schonhorn and Kelley before getting hired by the state. He accepted the Rolex from Schonhorn and the Rolling Stones tickets from a colleague of Schonhorn’s who introduced them in Las Vegas in 2010, court papers say.

Kelley, meanwhile, provided a reference for Kang that helped him land his $166,464-a-year job with the state pension system, where he supervised seven investment officers.

Once he was hired, Kang quickly began scheming to further line his pockets, accepting at least $160,000 in payoffs from Schonhorn — including the hookers, coke and top-shelf booze — and other $20,000 from Kelley, in the form of the vacations and McCartney concert, court papers say.

In exchange, he allegedly got both of their employers added to the list of brokers used by the pension system “under the guise of facilitating additional liquidity and obtaining best execution.”

As of March 31, Schonhorn’s firm — FTN Financial — had “executed approximately $2.38 billion in fixed income securities trades,” the papers say.

Schonhorn pocketed “sizable commissions — often hundreds of thousands of dollars per month,” court papers say.

Kelley’s firm — Sterne Agee & Leach, which was bought out last year by Stifel, Nicolaus & Co. — executed nearly $1 billion in trades before firing her last year for falsifying expense reports to pay for Kang’s bribes, according to the feds.

If it weren’t for the graft allegations, Kang might be viewed as a hero by the state, as the pension system’s fixed-income portfolio significantly outperformed the Vanguard Total Market Bond Fund during his tenure.

For fiscal year 2016, which ended March 31, the state’s investments were up 1.63 percent, compared to 0.58 for the Vanguard fund, while the prior year’s numbers were 5.53 percent and 2.96, respectively.

Defense lawyers for Kang and Kelley didn’t return calls, while Schonhorn’s lawyer and reps for FTN Financial and Stifel declined comment.

The Bobster
01-05-2017, 07:47 AM

Pension-fund manager accused of drug-fueled sexcapades ordered to stay sober
By Kaja Whitehouse
January 4, 2017 | 11:57pm

Navnoor Kang leaving court Reuters

The state pension manager charged with taking bribes to fund his rock-star lifestyle — including prostitutes, strippers and drugs — was warned Wednesday that he’d better stay sober pending trial or he’ll be tossed in jail.

“You will be subject to drug testing and treatment,” Manhattan federal Judge J. Paul Oetken told Navnoor Kang (right, leaving court) before releasing him on a $750,000 bond with the provision that he wears a GPS monitor.

The disgraced former New York pension official — hired by state Comptroller Thomas DiNapoli despite a shady past :rolleyes: — pleaded not guilty to charges that he steered billions of dollars in fixed-income-securities trades to two brokers in exchange for bribes.

Kang’s co-defendant, broker Deborah Kelley, also pleaded not guilty, was released on a $500,000 bond, and was ordered to “not use or possess illegal narcotics” as a condition of her release.

The feds say Kelley and another broker, Gregg Schonhorn lined the hard-partying Kang’s pockets with more than $100,000 in cash and gifts, including luxury vacations and VIP tickets to a Paul McCartney concert.

In exchange, Kang allegedly boosted their business by steering some $2.4 billion in fixed-income trades their way.

On Wednesday, prosecutors told the judge they have “consensual recordings” and text messages as evidence. Schonhorn, who has pleaded guilty, is cooperating with the feds.