New York pension investigation spreads to Texas

— -- A sweeping corruption investigation of public pension systems in New York expanded nationwide Thursday with the arrest of a Dallas investment adviser whose firm has worked for similar retirement plans in five other states.

Saul Meyer, co-founder of Aldus Equity Partners, was hit with corruption charges by New York Attorney General Andrew Cuomo for allegedly paying $300,000 in kickbacks to former New York state comptroller Alan Hevesi's top political aide in exchange for landing a retirement fund investment deal worth $175 million.

The criminal complaint also charged that Meyer, 38, tried to get additional business with the pension fund and gain Hevesi's favor by helping one of the comptroller's sons land a $250,000 fee in an unrelated investment deal with the New Mexico State Investment Council.

The Securities and Exchange Commission sought federal court approval to file civil fraud charges against Meyer and his firm, which has reaped millions of dollars through investment relationships with public pension systems in New York, New Mexico, California, Texas, Oklahoma and Louisiana.

Cuomo said he's coordinating the 2-year-old investigation with law enforcement authorities in other states based on signs of similar corruption involving other public employee pension fund officials and the private firms that vie for lucrative contracts advising them on billions of dollars in investments. "I believe we are disclosing a national network of actors who often acted in concert and did this all across the country," Cuomo said.

Meyer surrendered Thursday in New York and was released on $200,000 bail. His attorney, Paul Shechtman, said "time and the evidence will show that Saul Meyer did nothing wrong."

Matthew Orwig, the attorney for Aldus, argued that the SEC's proposed charges are "appalling and careless" because its investigation is incomplete. "Maybe they want a trial by news release, but that's not the way the judicial system works," he said.

The charges represent the expansion of an investigation that has focused on major players in both New York and national political and business circles, including private-equity giant Carlyle Group and Quadrangle Fund, the private-equity firm founded by Steven Rattner, the Obama administration's point man for the auto industry rescue.