Metro

Charges upheld in NY pension fund corruption case

A Manhattan judge today pruned back the 90-count Pay-to-Play state pension indictment against a former top consultant and confidant to ex-Comptroller Alan Hevesi — tossing 13 charges against him, including a first degree grand larceny that was one of the two top counts he’d faced.

But that good news for Henry “Hank” Morris was tempered by some harsh language in the judge’s 85-page decision, which slams Morris for allegedly being the mastermind behind a lucrative “toll gate” for any equity or hedge fund that wanted a piece of the state’s massive, more than $120 billion pension pot.

Only funds that were willing to pay massive brokerage fees to Morris and his accomplices were able to do business with the state, the Attorney General’s Office has charged — an alleged scheme Manhattan Supreme Court Justice Lewis Bart Stone said deprived the state’s one million pensioners of the “opportunity to have a safer, better or more balanced portfolio.”

The judge said he tossed the top grand larceny charge against Morris, along with a felony scheme to defraud count because, while the funds had to pay to play, ultimately, they “received gladlly what they paid for,” namely access to the pension honey pot.

A lesser grand larceny was lopped off the indictment because investigators didn’t prove Morris used extortion or false promises in demanding brokerage fees, the judge said. Other falsifying records and false filing counts were jettisoned because the related documents weren’t actually filed by Morris, the judge said.

The judge rejected Morris’s argument that the other top felony in the indictment — a charge of enterprise corruption carrying a mandatory prison penalty of anywhere from one to 25 years — should be tossed for insufficient evidence.

The grand jury received sufficient evidence, the judge wrote, that “Morris was the central figure of the criminal enterprise, and as one who was involved in each of the [pension] investments in question, and who received approximately $19 million for his alleged criminal efforts, he is hardly in a minor role.”

The judge also declined to toss one of the AG probe’s wackier charges: that Morris funneled $100,000 to former Hevesi lieutenant Jack Chartier by delivering “cash-filled envelopes” to Chartier’s then-girlfriend, actress Peggy Lipton.

Six people — including former pension fund honcho David Loglisci — have to date pleaded guilty in the probe.