Dec. 5 (Bloomberg) -- The founder of a Texas consulting firm was spared prison or probation for his role in a pay-to-play scheme involving New York State’s employee retirement fund.
State Supreme Court Justice Lewis Bart Stone in Manhattan today sentenced Saul Meyer, 42, of Houston, the founder of Dallas-based pension consultant Aldus Equity. The judge imposed the sentence, called conditional discharge, saying Meyer’s cooperation with investigators was instrumental in uncovering wrongdoing and securing convictions.
“What you did obviously was unacceptable, but you made up for it by cooperating,” Stone said. “I don’t think there is any value in incarceration at this point.”
New York’s then-Attorney General Andrew Cuomo, now the state’s governor, started a probe in 2007 of the fund, the third-largest public pension fund in the U.S. Its value was $150.6 billion as of March 31, according to the state comptroller’s office.
Meyer is one of eight people who pleaded guilty in connection with the investigation. They included former Comptroller Alan Hevesi, who was sentenced last year to as many as four years in prison. Hevesi was granted parole last month and may be released as soon as this month.
Meyer admitted during his guilty plea in October 2009 that he paid $300,000 to Hevesi’s former adviser, Hank Morris, to secure business from the pension fund. New York state in 2009 banned the use of placement agents or lobbyists in investments with the pension fund, and banned contributions from those who do business with the fund.
Morris pleaded guilty in November 2010 and was sentenced to as long as four years in prison in February 2011 after admitting the fund’s investment process was manipulated to benefit him, his associates and contributors to Hevesi’s campaign. Morris was denied his request for parole last month.
Aldus Equity in December 2010 agreed to pay $1 million in restitution to the state’s pension fund, one of more than 20 firms that have settled with the state attorney general’s office over the probe. Meyer has forfeited more than $1 million himself, Stone said.
Meyer’s attorney, Paul Shechtman, said his client’s life is “in tatters” and he has few assets remaining. A married father of two boys aged 4 and 7, Meyer “lost his moral compass,” Shechtman said.
“The world of public pensions in New York and elsewhere is a cesspool,” Shechtman said. “It’s too often pay-for-play.”
The case is New York v. Meyer, SCI-04755-2009, New York State Supreme Court, New York County (Manhattan).
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