BRADENTON, Fla. — A firm associated with a former JPMorgan banker being pursued in a Securities and Exchange Commission civil case for alleged pay-to-play charges involving Jefferson County, Ala., was fired on Christmas Eve from a pension consulting job in Florida after Charles LeCroy's legal problems came to light.
Those legal problems include the fact that LeCroy spent three months in prison after pleading guilty to two counts of wire fraud in a Justice Department pay-to-play and municipal corruption case in Philadelphia.
As a result of his conviction, LeCroy was permanently barred from the municipal bond market and securities industry.
LeCroy, who lives in Winter Park, Fla., was linked to a company called THGC Consulting LLC in a story Thursday by the Orlando Sentinel.
THGC Consulting was hired for $90,000 in November by Florida Senate President Mike Haridopolos, R-Merritt Island, to review ways to trim state pension costs.
The only person named as a principal in THGC is Karen LeCroy, according to state corporation records. Karen and Charles LeCroy live in Winter Park and both used the same address on a number of corporations with similar names.
After Charles LeCroy was linked to THGC Consulting, and questions were raised about his past and current legal problems involving public corruption, the company was terminated by Haridopolos on Christmas Eve.
LeCroy and Haridopolos could not be reached Tuesday for comment or to obtain additional information about the terms of the contract or how THGC Consulting was selected.
"While [LeCroy's] criminal case has been resolved, I do not wish to have the outstanding civil case become a distraction to the hard work we must perform fixing our pension system and balancing Florida's budget," Haridopolos said in a statement to the paper about terminating THGC Consulting.
Haridopolos is referring to the pending case against LeCroy that arose out of the $3.2 billion sewer warrant corruption probe in Jefferson County that has seen contractors, elected officials, a local bond dealer, and a lobbyist sent to prison over expansion and financing of its sewer system.
The SEC has alleged in a civil suit that LeCroy and Douglas MacFaddin, another former JPMorgan banker, made more than $8 million in undisclosed payments to friends of certain county commissioners and broker-dealers to ensure that JPMorgan would be managing underwriter of Jefferson County's sewer bond offerings and chosen swap provider in 2002 and 2003.
In August, a federal judge in Alabama denied motions by the former bankers to dismiss the SEC suit that alleges they committed securities fraud. LeCroy and MacFaddin claimed the SEC did not have jurisdiction over the swaps because they are not based on securities. However, the judge said it is too early in the legal process to rule on the issue of whether the swaps were "securities-based" because that assertion is disputed by the SEC.
Most of Jefferson County's variable- and auction-rate sewer warrants remain outstanding, and the county has defaulted on some payments.