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Two Charged In Alleged State Pension Fund Scandal

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A political consultant and a former deputy comptroller pleaded not guilty Thursday to enterprise corruption and other charges stemming from an alleged state pension fund scandal.

Hank Morris and David Loglisci were arrested and arraigned in a Manhattan court on 123 counts of enterprise corruption and other felonies, following a two-year investigation by State Attorney General Andrew Cuomo's office.

Prosecutors allege the two engaged in a three-year criminal enterprise to pocket more than $35 million in finder's fees, helping private firms score business with the pension fund.

"The allegations in the indictment reveal a complex criminal scheme, involving numerous individuals operating at the highest political and governmental levels of the office of the state comptroller," said Cuomo. "It entails a web of corrupt acts for both political and personal gain."

Both men say they are innocent.

"The New York state pension fund made hundreds of millions if not billions on investments that Hank Morris lawfully introduced to it," said Morris' attorney, William Schwartz. "And the fund did not pay him one penny. There was no fraud, there was no corruption. Hank Morris is innocent and we will defeat these charges at trial."

Morris, who was released on $1 million cash bail and ordered to surrender his passport, was a top political consultant to former Comptroller Alan Hevesi and Senator Charles Schumer.

Loglisci, who was released on $350,000 bond, is a former deputy controller for Pension Investment and Cash Management under Hevesi.

Morris is due back in court on June 12.

The former comptroller will not be charged in the case and has long denied wrongdoing in the management of the pension fund.

Hevesi quit his post after pleading guilty to a felony charge in 2006 for using a state worker to chauffeur his wife and run errands.

Hevesi's attorney released a statement saying, "Alan Hevesi has not been charged with any misconduct with respect to the management of the New York State pension fund. As he has for the past two years, Mr. Hevesi continues to vehemently deny any wrongdoing."

Cuomo and officials at the Securities and Exchange Commission both say their investigation continues and more people could possibly be charged.

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