Three former Detroit officials – including two who worked for the city’s pension systems – were convicted Monday of conspiracy to commit fraud.
The men accepted bribes and other kickbacks in exchange for directing pension money to certain investments.
From the Wall Street Journal:
A former treasurer for the city of Detroit — along with two other former city pension officials — were convicted Monday of conspiring to defraud retirees by trading lucrative investment deals for bribes and kickbacks as the city’s finances spiraled out of control.
A federal jury convicted former treasurer Jeffrey Beasley, 45, of Chicago following a two-month trial. Ronald Zajac, who was an attorney for the pension fund and Paul Stewart, a former pension trustee, were also found guilty of corruption charges.
All three defendants were convicted of conspiring to defraud the city’s pensioners by accepting bribes. In addition, Mr. Beasley was convicted of two counts of extortion and one count of bribery. Mr. Beasley was acquitted on three other counts of extortion.
The evidence at trial, according to federal prosecutors, showed that Detroit’s two retirement systems lost more $97 million on pension deals corrupted by bribes and kickbacks taken or paid by the defendants…
Messrs. Beasley, Zajac and Stewart conspired with each other and, prosecutors alleged, with former Detroit Mayor Kwame Kilpatrick and others to take bribes and kickbacks in return for votes on investment decisions made by the boards of trustees of Detroit’s two pension systems.
This happened under the watch of former city Mayor Kwame Kilpatrick, who is currently serving a 28-year prison sentence for racketeering, tax crimes and bribery.
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