By Brendan Pierson
NEW YORK (Reuters) - A former portfolio manager at New York state’s retirement fund pleaded guilty to two counts of conspiracy on Wednesday after U.S. prosecutors accused him of steering more than $3 billion in trades to two brokerages in exchange for bribes that included vacations, cocaine and prostitutes.
Navnoor Kang, 37, former director of fixed income and head of portfolio strategy at the New York State Common Retirement Fund, entered his plea before U.S. District Judge Paul Oetken in Manhattan federal court, according to James Margolin, a spokesman for the prosecutors.
Each charge carries a maximum sentence of 20 years. Kang is scheduled to be sentenced by Oetken on Feb. 23. Lawyers for Kang did not immediately respond to a request for comment.
The $184.5 billion Common Retirement Fund is the investment arm of the New York State and Local Employees’ Retirement System and the New York State and Local Police and Fire Retirement System. Kang worked there from January 2014 to February 2016 and was responsible for investing $53 billion in fixed income assets, according to prosecutors.
During that time, prosecutors said, Kang took bribes from Deborah Kelley, a former managing director at broker-dealer Sterne Agee, and Gregg Schonhorn, a former vice president at broker-dealer FTN Financial Securities Corp.
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The bribes amounted to more than $100,000 worth of gifts including travel, meals, prostitutes, sports tickets, drugs and cash, prosecutors said. In return, prosecutors said, Kang steered state pension business to the two firms.
The business yielded millions of dollars in commissions for the two broker-dealer firms, of which Kelley and Schonhorn personally took a 35 to 40 percent share, prosecutors said.
Both Kelley and Schonhorn have pleaded guilty. Kelley was sentenced to 1,000 hours of community service in September, while Schonhorn has not yet been sentenced, according to court records.
(Reporting by Brendan Pierson in New York; Editing by Tom Brown)