US - The Illinois Teachers' Retirement System (TRS) said none of its assets were used to pay fees in a scandal involving millions of dollars in kickbacks from government deals.
The TRS made the statement after it emerged that Chicago businessman Antoin Rezko and former TRS trustee Stuart Levine had been accused of soliciting and demanding millions of dollars in undisclosed payments and kickbacks from investment firms seeking to do business with the TRS.
An indictment stated Rezko and Levine had used their influence to coerce the investment firms into signing sham consulting contracts, requiring the firms to pay finder’s fees for work that was never provided. TRS said the true recipients of the fees were concealed by Levine and former outside counsel Steven Loren from the TRS trustee board, and added:
"No TRS assets were used to pay these fees, which prosecutors say were split among Rezko, Levine and others involved in the scheme. In most cases, the schemes were unsuccessful because TRS staff intervened or because the investment proposals were not worthy of consideration by the TRS board."
Jon Bauman, TRS executive director, described Rezko and Levine's actions as "shameful".
In January, the TRS filed a civil suit against Levine, its former outside counsel Steve Loren and his former law firm, and Joseph Cari, former partner of the private equity fund HealthPoint Capital.
The suit accused the three of criminal breach of their fiduciary duties to TRS, and sought $3.9m in legal fees paid to Loren’s former law firm, Gardner Carton & Douglas, as well as other monetary and compensatory damages to be determined by the court. That civil suit has been stayed until the criminal cases are resolved.
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