Police and Fire Retirement System Severs Real Estate and Advisory Business with MayfieldGentry Realty Advisors, LLC
DETROIT, May 3, 2012 /PRNewswire/ -- The Police and Fire Retirement System of the City of Detroit has taken a Board action today to terminate its business with MayfieldGentry Realty Advisors, LLC in handling any assets of the Pension Fund, announced Chairman Sean Neary.
Neary said the Board acted on information and advice from its legal counsel regarding serious allegations of misappropriation of funds and related issues concerning $3.1 million in two California properties that were allegedly purchased with pension money but never properly titled to the PFRS.
"The severance of MayfieldGentry Realty Advisors, LLC of Detroit is a direct result of an admission by MGRA of conduct that is a violation of its fiduciary responsibilities to the PFRS and its membership. Specifically, there are charges of misappropriation of PFRS assets under the direct custody and control of MGRA. The investigation of this matter is ongoing by our staff and regulatory authorities," said Neary.
As spokesman for the $3.4 billion fund, Neary added that the Board of Trustees is actively pursuing all appropriate actions to protect the interests of the Police and Fire Retirement System. This action impacts a substantial amount of PFRS real estate investment holdings and the PFRS has taken steps to place these assets under the day-to-day control of trusted and proven property managers.
"Let the message be heard that the Police and Fire Retirement System of the City of Detroit will not tolerate any level of professional misconduct regarding the pension funds held in trust for first responders and their families," said Neary. "We will use the full force of the law and all appropriate resources to recover funds from any person or party that has violated that trust."
The specific admissions of misconduct were addressed in a letter from MayfieldGentry that in calendar year 2008 Funds were used by a subsidiary company to MayfieldGentry to purchase buildings in two California cities. The titles to those properties were never transferred to the PFRS and one of those buildings was sold. The PFRS has frozen all payments to MayfieldGentry and is assisting authorities in the recovery of these assets. The properties in question are located in Carmichael and Santa Rosa, California. Both buildings were multi-tenant retail malls and the Carmichael property was the one that was sold.
Neary added that the Fund will ensure that all properties in which it has an investment will be properly transitioned to new management companies and that there shall be no disruption to any tenants. The PFRS is a stakeholder in One Detroit Center and Grand Park Center buildings in Detroit.
"Perhaps the overriding story here is that this Board and the Police and Fire Pensions are solidly funded," said Neary. "This board has been working hard to operate with efficiency, transparency and accountability to its members. Unfortunately, a few isolated actions by outside advisors have tarnished our reputation. This board is comprised of new members and we are doing business in a transparent mode. We cannot change the past. We can and are doing business in an open and transparent and ethical manner. We are posting minutes on-line, we have adopted a new ethics policy, we are taking actions to ensure additional review, checks and balances and fair and open opportunities to bring investment opportunities to the full board for review."
The Police and Fire Retirement System of the City of Detroit was founded under City Charter and is the fiduciary for the pensions of all police and fire personnel. As of 2012 there are some 4,000 active members and more than 8,000 retirees in the system. The PFRS is a separate entity from the city's General Retirement System. For more information please visit www.RSCD.org.
SOURCE Police and Fire Retirement System of the City of DetroitBack to top