- Indictment supersedes one filed in March 2013
- Charges include conspiracy, corruption, fraud
- CalPERS ex-CEO Buenrostro agreed to cooperate
U.S. Attorney Melinda Haag announced on Aug. 7 that Alfred J. Villalobos, a former member of the board of the California Public Employee Retirement System who later worked as a placement agent, engaged in a conspiracy to commit corruption, defraud the United States, conceal materials, and conspire to commit mail and wire fraud, sister wire service Reuters reported.
Villalobos was a member of CalPERS board from 1993 to 1995 and later founded a placement agency called ARVCO Capital Research LLC that solicited investments by public pension funds in private equity funds, according to court documents.
The indictment, handed down on Aug. 7, was a revision from one originally filed in March 2013, when Villalobos was charged, along with former CalPERS Chief Executive Fred Buenrostro, in connection with a scheme involving a $3 billion CalPERS investment in funds managed by Apollo Global Management, the New York-based mega-firm.
CalPERS is the largest U.S. public pension fund.
Villalobos was the placement agent who orchestrated the transaction between Apollo and CalPERS, according to a statement released by the U.S. attorney for the Northern District of California.
Prosecutors allege that in 2007, Villalobos and Buenrostro created a series of fraudulent investor disclosure letters, for which Villalobos’s firm earned $14 million in fees.
Villalobos and Buenrostro then proceeded to misrepresent and conceal information from the U.S. Securities and Exchange Commission, the U.S. Postal Inspection Service and the Federal Bureau of Investigation, the documents said.
The attorney for Villalobos, Bruce Funk, could not immediately be reached for comment.
In July, Buenrostro pleaded guilty to a single count of conspiracy and agreed to cooperate in future investigations.
In his plea, Buenrostro admitted he had accepted gifts, travel and other benefits from Villalobos in exchange for using CalPERS investments, including cash bribes that eventually totaled approximately $200,000 and were delivered to him at a downtown Sacramento hotel in paper bags and a shoe box.
Villalobos hosted Buenrostro’s wedding at his home in Nevada, flew the CalPERS chief to Dubai, Hong Kong and Macau, and provided valuable casino chips to now-former CalPERS board members, Buenrostro stated in the plea agreement.
Robin Respautis a correspondent for Reuters in San Francisco.