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ALBUQUERQUE, N.M. (AP) — An investigation is under way to determine if investments made by the state of New Mexico were influenced by possible fraud or other criminal activity from 2004 to 2009, court documents state.
A copyright story Monday in the Albuquerque Journal cites a sentencing memo filed in federal court in New York in connection with a bank fraud case against Democratic Party fundraiser Hassan Nemazee.
The April document describes the New Mexico investigation as ongoing and said it "concerns whether fraud or other criminal activity influenced or corrupted investments made by the State of New Mexico."
Nemazee previously secured an agreement for his financial management firm to handle more than $200 million in New Mexico investments.
Nemazee, recently sentenced to 12 years in federal prison for bank fraud in New York, told prosecutors and FBI agents he initiated contacts with New Mexico officials to secure an agreement for Carret Asset Management to handle a State Investment Council stock portfolio.
After Nemazee's arrest last August, State Investment Council staffers visited Carret in New York and were told Nemazee was a silent partner with no involvement in day-to-day operations.
"The information in the sentencing memo would certainly indicate that Carret was less than truthful with SIC staff during follow-up we performed after the initial (bank fraud) allegations were made against Mr. Nemazee," State Investment Council spokesman Charles Wollmann said.
Then-State Investment Officer Gary Bland hired Carret in 2007, two months after Nemazee introduced Gov. Bill Richardson at an event in New York. A governor's spokesman said he couldn't comment, citing the investigation.
Carret's fees were based on a percentage of the amount the firm managed. The company earned $1.8 million between July 2007 and December 2009. In May, the newly constituted SIC voted to terminate four investment managers, including Carret.
"The primary reason discussed by the council was investment performance, though other issues were also cited," Wollmann said.
Nemazee has been a fundraiser for the National Democratic Party for years and recommended former Democratic National Committee Chairman Terry McAuliffe for a job as an adviser at Carret. McAuliffe led Hillary Clinton's 2008 presidential campaign and Nemazee was a national finance chairman in her bid.
Nemazee also contributed $5,000 to Richardson's 2006 gubernatorial campaign, and he and his wife were contributors to Richardson's 2008 presidential campaign.
Nemazee's partner in Carret also contributed to Richardson's gubernatorial and presidential