Steven Herbert, the former chief investment officer for Kentucky’s state pension system, filed a whistle-blower lawsuit against the agency Friday, alleging he was fired for drawing attention to the embezzlement of millions of dollars.
“They hired him to come up here and look and see if they were making proper investments with the pension money, and that’s what he did,” said Thomas E. Clay, the former CIO’s attorney.
The $22 billion Kentucky Public Pensions Authority contests Herbert’s claims, filed in Franklin Circuit Court.
The suit “contains demonstrably false allegations. KPPA regrets that it will be forced to spend resources to defend against Mr. Herbert’s lawsuit, but we are confident in our defense of the claims he has asserted,” KPPA executive director David Eager said.
Herbert worked for KPPA from January 2021 until last May 31. He previously was chief operating officer for Florida-based Augustine Asset Management.
After Herbert started at KPPA, according to the suit, he immediately had concerns about a subsidiary, Perimeter Park West, which owns the pension system’s office complex on Louisville Road in Frankfort. Perimeter Park West failed to pay millions of dollars in dividends it owed to the pension system over a period of years, according to the suit.
“When plaintiff inquired about the missing funds, he was told by (KPPA general counsel) Victoria Hale that Crumbaugh Properties had embezzled the funds,” according to the suit.
Crumbaugh Properties of Frankfort at...
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