The New York Attorney General’s office has confirmed that Julio Ramirez has pleaded guilty to misdemeanour charges of securities fraud related to the New York State Common Retirement Fund kick-back scandal.
The Wall Street Journal first reported the plea was expected and said the Securities and Exchange Commission is expected to file a separate civil suit.
Ramirez – who worked for Blackstone Group-affiliated placement agent Park Hill Group from 2005 to March, and previously for Los Angeles-based placement agent Wetherly Capital – was reportedly an associate of Henry Morris and would funnel payments to him. Morris is a former political operative in New York accused of being the central figure in an alleged scheme to demand sham finder’s fees from investment firms seeking pension commitments.
Transactions that involved Ramirez and Morris included fund commitments made to FS Equity Partners V, the Ares Corporate Opportunities Fund II, and the Aldus/NY Emerging Fund, the Attorney General's office said in a statement. “In late 2003 and early 2004, the CRF invested $50 million in both FS Equity Partners V and the Ares Corporate Opportunities Fund II. This generated more than $630,000 in fees for Wetherly and Ramirez, of which Morris allegedly obtained 40 percent, or more than $250,000,” the statement said.
Here, an unlicensed intermediary working with a broker-dealer partnered with the chief political operative at the Comptroller’s Office in New York to split profits from corrupt pension fund deals.
“This investigation has uncovered a matrix of corruption – which grows more expansive and interconnected by the day,” said Attorney General Andrew Cuomo. “The web of corruption spans the United States and extends into numerous industries. Here, an unlicensed intermediary working with a broker-dealer partnered with the chief political operative at the Comptroller’s Office in New York to split profits from corrupt pension fund deals. This highlights the inherent risks in the use of placement agents – especially those that are unlicensed.”
Morris and several others have been indicted, including Saul Meyer, founder of Dallas private equity advisor Aldus Equity. Morris has denied wrongdoing and Meyer has pleaded not guilty to charges of securities fraud brought by Cuomo's office. The SEC has filed separate civil complaints.
Aldus’ attorney, Matthew Orwig, said previously the SEC charges are “appalling and careless with the law and peoples’ reputations”. The SEC charged Aldus “without completing an investigation or even having a conversation with Aldus partners before it took legal action”, Orwig said.
According to the New York Attorney General’s indictment cited by the Wall Street Journal, Ramirez and his company Ramirez Partners received payments from Wetherly as well as Aldus; Ramirez would then in turn pay Morris. Wetherly has not been charged with any wrongdoing and is cooperating with the investigations, sources told the Wall Street Journal.
“Ramirez informed us that this was how Morris wanted to be paid for his services,” a Wetherly spokesman told the paper.
“Two of these payments, for a combined $313,750, are described in the indictment as money laundering by Morris,” the paper said.
A Blackstone spokesman told PEO that Ramirez left Park Hill of his own accord in late March, saying he wanted a “lifestyle” change and had “the desire to start his own firm”.
“After he left, his name started to pop up in this [kick-back] investigation so we began our own internal investigations,” the spokesman said. The firm found no evidence of any misconduct or violations during Ramirez's tenure, he said.