WASHINGTON — Navnoor Kang, the former director of fixed income for the New York State Common Retirement Fund, should serve 10 years in prison for his role in a pay-to-play scheme, federal prosecutors told a district court judge.
Kang, 38, pleaded guilty last year to charges that he accepted bribes from two brokers in exchange for the rewarding their firms fixed-income business from the NYSCRF. He is scheduled to be sentenced July 12 after his original February sentencing date was pushed back multiple times.
While sentencing guidelines for conspiracy to commit securities fraud and conspiracy to commit honest services wire fraud could land Kang behind bars for 17 years or more, the Justice Department is suggesting 10 years might be more appropriate. Kang’s own lawyer told the court it should impose house arrest instead of prison time because Kang is a good person who did not personally reap great profits from his actions.
“While the government does not believe that a guidelines sentence is necessary in this case, the government does respectfully submit that a term of imprisonment of at least 120 months is warranted in this matter in light of Kang’s egregiousness conduct, his flagrant abuse of his position of public trust, and his pervasive obstruction of justice,” U.S. Attorney Geoffrey Berman said in a court filing. “Such a sentence would be sufficient but not greater than necessary to serve the legitimate purposes of sentencing.”
The government’s sentencing memorandum points to text messages Kang sent to his then-girlfriend during his early days at the NYSCRF, complaining about the conditions at the office and longing for “the days of private jets, limos, free food all the time, ocean view, and perfect weather.” The texts “offer a window into Kang’s greed, arrogance, and motive for engaging in the scheme,” the government said, pointing out that Kang was treated to lavish trips and gifts such as expensive wristwatches in exchange for offering business to brokers Deborah Kelley and Gregg Schonhorn.
“Kang’s offense was very serious. Kang flagrantly abused his position of public trust and fiduciary duty to the NYSCRF and its pension holders by accepting cocaine, prostitutes, cash, and lavish trips and dinners for [his] own personal benefit,” the government told the court. “In doing so, Kang corrupted one of the nation’s largest public pension funds and deprived NYSCRF’s thousands of pension holders of their right to [his] honest services. He also undermined the integrity of the fixed income markets.”
But Kang’s lawyer, Mark Geragos of the law firm Geragos & Geragos, painted a very different picture of Kang in his sentencing submission. Kang was an excellent student who idolized his parents and was forced to overcome “painful and humiliating racism” due to his status as an Indian-American in a small, majority-white school, Geragos wrote. Kang repeatedly sacrificed his own professional ambitions, including a budding tennis career, to take care of his family financially, Kang has long suffered from both anxiety and depression, according to his lawyer, but his friends and acquaintances still describe him as “exceptionally caring and compassionate” and as having “a heart of gold,” according to Geragos.
Geragos also argued that it would be inconsistent to put his client in prison when Kelly, one of the brokers, received a sentence of probation and house arrest, even though it was she and Schonhorn who were personally profiting from the scheme.
Other lawyers uninvolved in the case have said it is unlikely Kang would get a years-long jail sentence.
“If granted home detention by the court, Mr. Kang will treat it like a privilege and take advantage of the time to learn a new trait and skill by pursuing a different degree or learn to apply his education to a new field,” Geragos wrote.
The Securities and Exchange Commission’s parallel civil case against Kang remains pending, having been put on hold to allow the criminal proceeding to move forward.