In a press release, the TRS said Levine admitted using his position and influence as a TRS trustee to coerce investment firms to pay “finder’s fees” for consulting work that was never provided. Prosecutors said Levine and Tony Rezko, a top fundraiser for Governor Rod Blagojevich, were the true recipients of these fees, according to the release. The TRS said Levine and former TRS outside counsel Steven Loren concealed these fees from the TRS Board of Trustees and agency staff.
Formal charges were brought against Levine in August, 2005 (See IL TRS Trustee Charged in Kickback Scheme ).
The TRS pointed out that, in 2005, its Board of Trustees banned third-party payments for private market investments, except for those paid by investment firms to legitimate marketing companies and investment bank placement operations, and that such fees were already prohibited by the TRS for public market investments. (See IL TRS Reacts To Federal Investigation ).
TRS also said it filed a lawsuit earlier this year in Cook County Circuit Court against Levine, Loren and Loren’s former law firm, and Joseph Cari, a former partner of the private equity firm HealthPoint. The suit alleges criminal breach of fiduciary duties and seeks the reinstatement of $3.9 million in legal fees and other monetary damages. The suit has been stayed pending the outcome of the criminal cases.
“The admission of guilt and plea agreement by former trustee Stuart Levine mark the end of a sad chapter in the betrayal of the 326,000 members of the Teachers’ Retirement System,” the TRS said in the release.