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By Joan Gralla
NEW YORK Dec 9 The founder of private equity
firm Riverstone Holdings LLC, David Leuschen, will pay $20
million in restitution to resolve his role in a kickback probe
of New York's state pension fund, Attorney General Andrew Cuomo
said on Wednesday.
After the state pension fund invested $150,000 in a joint
venture between Riverstone and The Carlyle Group [CYL.UL],
Leuschen made an "investment" of $100,000 in a film produced by
the brother of the former top pension investment officer, David
Loglisci, Cuomo said.
A two-year probe into kickbacks that investment firms paid
to middlemen in order to win the often lucrative business of
investing the state pension fund has already resulted in five
guilty pleas, the latest by Elliott Broidy, a California
Broidy plead guilty to a felony for bribing four top
officials in the New York state comptroller's office.
This development for the first time involved the former
Democratic comptroller, Alan Hevesi, in the kickback probe
because he took luxury overseas trips paid for by Broidy,
according to a source familiar with the travel records.
For details on Broidy, who resigned as the chairman of
Markstone Capital Partners, please see: [ID:nN03111009].
Hevesi resigned in 2007 and then plead guilty to a felony
for having state drivers chauffeur his ailing wife.
Hevesi has not been charged in Cuomo's investigation and
his lawyer, Brad Simon, declined comment. Loglisci was charged
along with Henry Morris, Hevesi's former top fund raiser; their
lawyers have said their clients did nothing wrong.
Cuomo, a Democrat, in a statement said the Riverstone
founder's restitution payment would be turned over to the state
pension fund. So far the attorney general has collected more
than $100 million for the state and the pension fund.
Riverstone and Carlyle, a private equity fund, had only
"limited success" in being chosen to invest New York's pension
fund until they hired Searle, a company linked to Morris, who
was a placement agent, Cuomo said.
After hiring Searle, however, Riverstone and Carlyle were
chosen to invest $530 million of state pension monies. Carlyle
paid Searle more than $10.6 million in fees.
(Reporting by Joan Gralla; Editing by Theodore d'Afflisio)