Former Hevesi Aides Indicted On Pension Scam

Hank Morris, a political consultant to disgraced former New York State Comptroller Alan Hevesi, and David Loglisci, former deputy controller for Pension Investment and Cash Management under Hevesi, were indicted in a pension fund fee scam. Morris also worked for Sen. Chuck Schumer.

The specific charges weren't clear last night. Hevesi will not be charged, the source said.

The News reported in September that Cuomo had convened a grand jury.

Morris pocketed at least $25 million in middleman fees from financial firms that won business with the pension fund during Hevesi's tenure.

Successful companies paid a little-known Connecticut financial firm, Searle & Co. "placement fees," 95% of which are said to have gone to Morris.

The largest chunk was from the Carlyle Group, one of the world's biggest private equity firms in the world.

Carlyle, which invests $1.3 billion for the state pension, paid $12.3 million to Searle from 2003 through 2006.

Morris, Loglisci and their lawyers could not be reached. Searle's lawyer said he was unaware of any charges. Cuomo had no comment.

Morris, a longtime Democratic consultant who also worked for Sen. Chuck Schumer, quietly registered as a financial broker just months after Hevesi took office in 2003.

Few people are said to have known of his involvement with Searle & Co., which is located above a Greenwich, Conn., Christian Science reading room.

Meanwhile, Morris created five firms - four of which shared his East Hampton home address. His name was not listed on the incorporation papers.

At least three of the companies received fees from firms doing business with the fund, documents show. Morris no longer works at Searle.

Hevesi, who quit in 2006 before pleading guilty to an unrelated felony, has denied knowing Morris made money off the pension fund.

While the Daily News doesn't have the specific charges, NY1 does. It's 123 counts of enterprise corruption and other felonies.

Hank Morris and David Loglisci were arrested and arraigned this morning in a Manhattan court on 123 counts of enterprise corruption and other felonies.

Prosecutors allege the two engaged in a three-year criminal enterprise to pocket more than $35 million in middleman fees.

They are the first to be charged in a case that took nearly two years to uncover.

State Attorney General Andrew Cuomo's office investigated whether financial firms were using politically-connected consultants in an effort to get business with the state pension fund.

Morris is a top political consultant to former Comptroller Alan Hevesi and Senator Charles Schumer.