US - The judge who accepted the guilty plea of former New York Comptroller Alan Hevesi has transferred the pension-fund corruption case to another judge for sentencing, after refusing to withdraw because of an alleged conflict of interest.
State Supreme Court Justice Lewis Bart Stone, who was scheduled to sentence Hevesi yesterday, denied a motion requesting his withdrawal over the accusation of a conflict involving a relationship with the parents of Hevesi's lawyer.
He said instead he would turn the case over to an administrative judge for sentencing or reassignment with a new court date of April 4.
"The publicity over this court's relationship with Hevesi's lawyer's parents, while meritless, dims the clarity of this sentencing," Stone said.
The "counterstory" took away from "the real story here: that of Mr. Hevesi's felony conviction based upon his confession of his central role in the corruption of the investment process of the New York state Common Retirement Fund," the judge said.
Hevesi (pictured) in October admitted approving $250m in pension investments in exchange for almost $1m in gifts. He is the highest ranking official to plead guilty in a probe of corruption at the state pension fund conducted by former New York attorney general Andrew Cuomo, now the state's governor.
Hevesi from 2003 through 2006 was comptroller and trustee of the retirement fund, recently valued at $140.2bn. He may be sentenced to as little as no time in prison or to a range of one year and four months to four years.
Hevesi did not appear in court yesterday as he had been hospitalised for tests, his lawyer Bradley Simon told the judge. In an interview after the hearing, Simon said Hevesi had internal bleeding.
Earlier this month, Simon filed a motion asking Stone to recuse himself in connection with his role as trustee and executor of the estate of the lawyer's parents. Stone disclosed the relationship in court March 1 and in court papers. The judge told Simon then that his estranged father had disinherited him.
"Faced with a clear conflict of interest, Judge Stone intentionally hid the conflict, rather than disclose it, in order to preside over this high-profile matter," Simon wrote in court papers.
State Attorney General Eric Schneiderman said there was no legal reason for Stone to step down.
The relationship "does not constitute an apparent conflict of interest, and therefore does not call into question Judge Stone's impartiality," the attorney general's office wrote.
He admitted giving preferential treatment to Markstone Capital Partners, approving $250m in pension fund investments in exchange for $75,000 in travel expenses, $380,000 in sham consulting fees for a lobbyist and more than $500,000 in campaign contributions.
Hevesi should receive the maximum sentence for his "monumental betrayal of the public trust," Schneiderman said in court papers made public today.
Hevesi is among about eight people who pleaded guilty in criminal cases stemming from the investigation, including Markstone founder Elliott Broidy. At least six people and 21 firms also settled with Cuomo, paying about $170m to the state and the pension fund.
About $5bn of the fund's $9.5bn in alternative investments made in from 2003 to 2007 were tainted by kickbacks, according to the U.S. Securities and Exchange Commission, which also investigated. New York's Common Retirement Fund is the third-largest public pension fund in the U.S.
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