Attorney General Jerry Brown announced he has filed a fraud lawsuit against the former head of the California Public Employees' Retirement System and a middleman accused of wining and dining him in order to procure $40 million in commissions from the massive investment pool based on the retirement cash that comes from teachers, professors, Caltrans crews and other government workers.
The civil suit names former Calpers CEO Federico “Fred” Buenrostro, system board member Alfred Villalobos, and his company ARVCO Capital.
“Working as a placement agent for ARVCO, Villalobos spent tens of thousands of dollars to lavishly entertain key senior executives at Calpers, who then influenced the board to authorize investments that generated over $40 million in commissions to Villalobos,” Brown stated. “None of these actions were disclosed as required by law, as state pension holders and taxpayers have every right to expect.”
Brown alleges that Villalobos took two Calpers officials on an “around-the-world trip,” took another executive on an expedition to New York, and gave Buenrosto a $300,000-per-year job and a condo when he exited Calpers. Villalobos is then alleged to have submitted fraudulent disclosure forms to the government that covered up his spending on Calpers lobbying.
A court order requested by the A.G. has frozen Villalobos' assets because, he alleges, the “middle man” started to move cash around “suspiciously” as the civil case, filed Wednesday in Los Angeles Superior Court, loomed.
Villalobos is said to be a “high-stakes” gambler who has possession of two Bentleys, two BMWs, art worth $2.7 million, and 14 parcels of real estate, not to mention cash, according to the Attorney General.
The suit seeks to recover the more than $40 million Brown says was fraudulently obtained by Villalobos.