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Justice? IMG Artists chief escapes jail for massive US fraud

The long-running fraud US prosecution of Barrett Wissmann, co-owner of the classical agency IMG Artists, has ended with the fraudster being spared a jail sentence after stitching up his associates and paying a $12 million fine.

You may form your own moral judgement about Wissmann, but the international association of arts managers (IAMA) has no compunction about keeping him as a full member, and Placido Domingo has just gone into partnership with him in a new festival in crisis-ridden Spain.

None of this enhances the reputation of the classical music industry for fair play and transparency. Here’s a Reuters report on the end of the case.

IMG Artists co-chair gets no jail for pension fund corruption

Fri Sep 28, 2012 4:05pm EDT   Reuters

* Wissman pleaded guilty in 2009

* Case involved “pay-to-play” at NY pension fund

* Scheme led to eight convictions

By Karen Freifeld

NEW YORK, Sept 28 (Reuters) – Barrett Wissman, co-chair of IMG Artists, will serve no jail time for his role in a sweeping case of securities fraud in which investment firms paid kickbacks to manage assets of the New York state pension fund.

Wissman, former managing director of Dallas-based hedge fund HFV Management (also known as Hunt Financial Ventures), was sentenced Friday. He pleaded guilty in 2009.

“Because of my actions and the actions of others,” Wissman said in New York state court at his sentencing, “investment managers were hired not for their skills and their abilities … but because they were well-connected.”

Wissman is among eight people who pleaded guilty in a years-long probe of “pay-to-play” at the New York state Common Retirement Fund, which was recently valued at $150.6 billion.

Another six, including Steve Rattner, co-founder of private equity firm Quadrangle Group LLC, and 21 firms made civil settlements, and paid more than $170 million for their roles in the scheme.

The investigation, initiated by then New York Attorney General Andrew Cuomo, now the state’s governor, revealed a nationwide problem and led to changes in pension funds across the country. New York banned the use of placement agents, lobbyists and elected officials from pension-fund business.

New York state Supreme Court Justice Lewis Bart Stone allowed Wissman to withdraw his 2009 felony plea on Friday, leaving him with a misdemeanor, as part of his cooperation agreement.

The judge sentenced Wissman to a conditional discharge, meaning the case was closed as long as he did not commit other crimes.

Wissman, who stepped down as chairman of IMG Artists after his 2009 guilty plea, is back as co-chair of the firm, which represents classical musicians.

He paid $12 million in his plea agreement with the New York Attorney General. In a separate agreement with the U.S. Securities and Exchange Commissioner, he was barred from the securities industry.

Wissman gave $600,000 in kickbacks to a political consultant between 2004 and 2007 in exchange for a $100 million investment by the New York pension fund in an HFV fund. He also took millions as a middleman on investments, secretly paying kickbacks on that money as well, the New York Attorney General’s Office said.

Former New York state Comptroller Alan Hevesi, who was running the state pension fund when the corruption occurred, is in prison. Hank Morris, the former political consultant at the heart of the scheme, was also sent to prison.

Elliott Broidy, the founder of Los Angeles-based Markstone Capital Partners, has not yet been sentenced. He pleaded guilty, too.

Saul Meyer, founder of Dallas-based pension consultant Aldus Equity, is also awaiting sentencing, as is David Loglisci, the pension fund’s former chief investment officer.

 

 

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Comments

  1. Thomas Moser says:

    And this should be a surprise ?

  2. This Wissman is a phenomenon. And he certainly found a way to move around with astonishing impunity. Notice the outcome of the NY state pension scandal: people with public appointments go to prison (or are awaiting to go), capitalists go free (even after they pleaded guilty). And how cheap it must be to stick $100 thousand in the pocket of a state official when you can afford to pay £12 million for the courts to leave you in peace. By the way, I wonder how much he made from the dirty deal — maybe $12 million is just a drop in that bucket, in which case this guy came off… phenomenally.

  3. When did the classical music industry (emphasis on the word industry) ever have a reputation for fair play and transparency?

  4. And that sums up the entire classical music Industry (or, Establishment): “Well-connected.” Talent, skill and creativity are no longer necessary or even considered, and haven’t been for 20+ years.

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