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Wed March 20, 2013
Feds indict two Detroit pension officials
Federal prosecutors say two people linked to Detroit's pension systems took part in a bribery and kickback scheme involving more than $200 million in investments for the funds.
The U.S. Attorney in Detroit says Paul Stewart, a former trustee for the city's police and fire retirement system, took thousands of dollars in cash, trips and entertainment from people looking for investments from the pension fund.
"Stewart accepted a $5,000 casino chip, a Christmas basket that included an envelope with thousands of dollars in cash, a cash payment of $2,500 during a trip to New York City, a cash payment of $2,500 during a trip to Florida, an excursion to the Bahamas for Stewart and his mistress, and a trip to Naples, Florida for Stewart and his mistress," the U.S. Attorney's office said in a press release.
Prosecutors say the attorney for both of the city's pension systems, Ronald Zajac, solicited and collected cash from people with business before the funds' trustees.
Zajac was fired from the police and fire pension board last year. But he's still the attorney for the city's general pension system.
If convicted, Zajac and Stewart face a maximum of 20 years in prison and a fine of up to $250,000.
The indictment brings to five number of people charged as a result of a criminal probe into the city's two pension funds.