Tuesday, September 2, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Ex-chief of huge pension fund guilty of bribery

By
From page A1 | July 12, 2014 |

SAN FRANCISCO — The former head of the nation’s largest pension fund admitted Friday that he took bribes, including hundreds of thousands of dollars stuffed in paper bags and a shoe box, and helped an associate collect millions in a fraudulent investment scheme.

Fred Buenrostro Jr. pleaded guilty in San Francisco federal court to fraud and bribery charges stemming from his time as chief executive of the California Public Employees’ Retirement System from 2002 to 2008.

In his plea agreement, Buenrostro said that in exchange for his help Alfred Villalobos, a former CalPERS board member, took him on a trip around the world, gave him casino chips and paid for his wedding in Lake Tahoe, California.

Villalobos denied the allegations through his attorney Friday.

Buenrostro’s guilty plea arises from a yearslong investigation into the role of money-management firm middlemen, called placement agents, in helping clients win investment business from a California pension system that controls $300 billion.

CalPERS said the investigation has prompted it to take “aggressive steps to implement policies and reforms that strengthen accountability and ensure full transparency.”

Buenrostro said in his plea that he started taking bribes in 2005 to use his influence with CalPERS to make investment decisions to help Villalobos’ clients. He also said he gave Villalobos, a CalPERS board member in the mid-90s, access to confidential investment information.

The 64-year-old former executive said he forged letters allowing firms connected with Villalobos to collect a $14 million commissions on $3 billion pension fund investments. He said he started writing bogus investor disclosure letters after CalPERS legal and investment officials declined to authorize them.

Further, Buenrostro said after he left CalPERS and went to work for Villalobos that he accepted $50,000 to lie to federal investigators in 2010 about their relationship.

Buenrostro faces five years in prison and a $250,000 fine when he is sentenced in January. In exchange for a lesser sentence, Buenrostro has agreed to cooperate with the continuing investigation of Villalobos, said Buenrostro lawyer William Portonova. “He got tired of lying,” Portonova said. “He’s ready to tell the truth.”

Villalobos has pleaded not guilty to fraud charges and other related counts. His attorney, Bruce Funk, said his client denies the claims contained in Buenrostro’s plea agreement. “If he’s truthful, there is nothing he can say that will hurt Mr. Villalobos,” Funk said.

Buenrostro and Villalobos, 70, also face two government lawsuits.

The state attorney general sued in 2010, saying Buenrostro and Villalobos, along with other former pension board and staff members, participated in kickback scheme.

At that time, the attorney general obtained a court order freezing assets of Villalobos and his company in an attempt to recover more than $40 million in commissions. Villalobos filed for bankruptcy later in 2010. His assets included 20 bank accounts, two Bentleys, two BMWs, a Hummer, art worth more than $2.7 million and 14 properties in California, Nevada and Hawaii. None of Buenrostro’s assets were seized.

State attorney general spokesman Nick Pacilio said a trial is scheduled for Sept. 8 in San Francisco Superior Court.

The Securities and Exchange Commission has also filed a lawsuit in 2012, which is still pending.

In a related sanction, the state’s campaign watchdog, the Fair Political Practices Commission, fined other executives and investment managers in 2011 for failing to report gifts that included food, wine and baseball and Rose Bowl tickets.

 

The Associated Press

The Associated Press

LEAVE A COMMENT

Discussion | 2 comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • rlw895July 12, 2014 - 10:19 am

    CalPERS better get it's house in order. It's an amazing story of corruption.

    Reply | Report abusive comment
  • Mr. Green ValleyJuly 12, 2014 - 11:37 am

    CalPERS members better hope CalPERS gets their act together. Especially if they are counting in the pensions for their retirement. Look at what's going on with the city of Stockton, Detroit and social security. The government corruption will screw all the hard working members while continuing to lie for their votes. Sounds a lot like Washington doesn't it?

    Reply | Report abusive comment
.

Solano News

Labor Day not a holiday for everyone

By Amy Maginnis-Honey | From Page: A3, 4 Comments | Gallery

 
Labor Day breakfast introduces union-backed candidates

By Susan Hiland | From Page: A3, 2 Comments | Gallery

Pool provides last dose of summer fun in the sun

By Amy Maginnis-Honey | From Page: A3 | Gallery

 
SafeQuest schedules peer counseling training course

By Susan Hiland | From Page: A5

 
Fairfield police log: Aug. 31, 2014

By Susan Hiland | From Page: A12

 
Suisun City police log: Aug. 31, 2014

By Susan Hiland | From Page: A12

Suisun City police log: Aug. 30, 2014

By Susan Hiland | From Page: A12

 
Fairfield police log: Aug. 30, 2014

By Susan Hiland | From Page: A12

.

US / World

VP Biden says workers deserve ‘fair share’

By The Associated Press | From Page: , 3 Comments | Gallery

 
Obama: ‘Revving’ economy calls for higher wages

By The Associated Press | From Page: , 3 Comments | Gallery

Senegal monitors contacts of 1st Ebola patient

By The Associated Press | From Page:

 
San Francisco to be 1st to test urban farming law

By The Associated Press | From Page:

GOP challenger tries novel tactics against Brown

By The Associated Press | From Page: | Gallery

 
US eating habits improve a bit – except among poor

By The Associated Press | From Page: , 3 Comments | Gallery

 
No gray area: Beliefs shape views of Brown killing

By The Associated Press | From Page: , 1 Comment | Gallery

Americans detained in North Korea call for US help

By The Associated Press | From Page: | Gallery

 
Iraqi prime minister pledges to root out militants

By The Associated Press | From Page: | Gallery

Poland’s PM: Ukraine’s war must be stopped now

By The Associated Press | From Page: | Gallery

 
Pro-Russian rebels lower demands in peace talks

By The Associated Press | From Page: , 2 Comments | Gallery

US helicopter crashes in Gulf of Aden; all rescued

By The Associated Press | From Page:

 
.

Living

Community Calendar: Sept. 2, 2014

By Susan Hiland | From Page:

 
.

Entertainment

Inquiries begin into nude celebrity photo leaks

By The Associated Press | From Page: , 1 Comment | Gallery

 
‘Guardians’ tops Labor Day, summer box office

By The Associated Press | From Page: | Gallery

TVGrid

By Daily Republic Syndicated Content | From Page: A11

 
.

Sports

Kirk rallies to win the Deutsche Bank

By The Associated Press | From Page:

 
Rockies top Giants after losing end of suspended game

By The Associated Press | From Page:

Dunn homers in 1st at-bat as A’s top Mariners

By The Associated Press | From Page:

 
Right guard Boone passes physical, rejoins 49ers

By The Associated Press | From Page:

Raiders name rookie Derek Carr as starting QB

By The Associated Press | From Page: B1

 
Armijo beats Vanden 2-0 to claim All-City boys soccer title

By Brian Arnold | From Page: B1 | Gallery

Armed with new deal, Chiefs’ Smith looks forward

By The Associated Press | From Page:

 
Column: Stewart’s Chase status doesn’t matter

By The Associated Press | From Page:

 
Raiders ink CB Dowling, 9 others to practice squad

By The Associated Press | From Page:

Serena Williams, Djokovic roll to US Open quarters

By The Associated Press | From Page:

 
Houston Astros fire manager Bo Porter

By The Associated Press | From Page:

Hamels, 3 Phillies relievers no-hit Braves

By The Associated Press | From Page:

 
.

Business

Markets drift as Wall Street has day off

By The Associated Press | From Page:

 
Austerity debate flares as Europe recovery fades

By The Associated Press | From Page: | Gallery

Civil disobedience expected in fast-food pay fight

By The Associated Press | From Page: , 8 Comments | Gallery

 
.

Obituaries

.

Comics

Beetle Bailey Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Zits Sept 2

By Daily Republic Syndicated Content | From Page: B6

Wizard of Id Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Sally Forth Sept 2

By Daily Republic Syndicated Content | From Page: B6

Bridge Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
Blondie Sept 2

By Daily Republic Syndicated Content | From Page: B6

Rose is Rose Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Get Fuzzy Sept 2

By Daily Republic Syndicated Content | From Page: B6

Sudoku Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
B.C. Sept 2

By Daily Republic Syndicated Content | From Page: B6

Baldo Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Frank and Ernest Sept 2

By Daily Republic Syndicated Content | From Page: B6

Crossword Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
Dilbert Sept 2

By Daily Republic Syndicated Content | From Page: B6

For Better or Worse Sept 2

By Daily Republic Syndicated Content | From Page: B6

 
Peanuts Sept 2

By Daily Republic Syndicated Content | From Page: B6

Cryptoquote Sept 2

By Daily Republic Syndicated Content | From Page: B7

 
Garfield Sept 2

By Daily Republic Syndicated Content | From Page: B6

Word Sleuth Sept 2

By Daily Republic Syndicated Content | From Page: B7