Federico Buenrostro, former chief executive officer of California Public Employees’ Retirement System, will plead not guilty to charges he conspired to trick the pension fund into paying millions of dollars to a placement agent, his lawyer said.
Buenrostro, 64, faces conspiracy and other charges for allegedly helping to create false documents so that Alfred Villalobos could garner $14 million in fees for arranging a $3 billion investment by Calpers into funds managed by Apollo Global Management LLC. (APO:US) Villalobos was also charged.
William Portanova, Buenrostro’s attorney, said in an interview today his client will plead not guilty and defend himself against the charges in federal court in San Francisco. He said his client isn’t accused of profiting from the conduct he’s charged with.
“It’s a backdating case,” Portanova said at a hearing today. Buenrostro, who receives $15,000 a month from his pension, “helped a friend” to obtain money “that he earned,” Portanova said at a hearing about Buenrostro’s bail.
He is free on a $500,000 unsecured bond. U.S. Magistrate Judge Nathanael Cousins upheld the amount and released Buenrostro from electronic monitoring.
Fees for middlemen arranging investments in private equity funds were at the center of a corruption scandal in which Villalobos, a Calpers board member from 1993 to 1995, was sued by state prosecutors and the pension system’s head of private- equity resigned. The state lawsuit is pending.
Villalobos, founder and managing director of Arvco Capital Research LLC, allegedly acted as a placement agent in helping Apollo to secure investments by Calpers, the country’s biggest pension fund, in 2007 and 2008. Apollo required Arvco to obtain an investor disclosure letter from Calpers before paying any fees for securing the investments, federal prosecutors said March 17.
Buenrostro and Villalobos allegedly conspired to create a series of falsified letters after Calpers’ officials declined to sign a letter, federal prosecutors said in an indictment unsealed March 17.
Buenrostro, who led the state’s public pension fund from 2002 to 2008, was accused along with Villalobos, 69, of conspiracy to defraud the U.S., engaging in a false scheme against the U.S. and conspiracy to commit mail fraud and wire fraud in a grand jury indictment announced by U.S. Attorney Melinda Haag in San Francisco.
Buenrostro’s next scheduled court appearance is May 8.
The case is U.S. v. Villalobos, 13-cr-00169, U.S. District Court, Northern District of California (San Francisco).
To contact the reporter on this story: Karen Gullo in San Francisco at email@example.com
To contact the editor responsible for this story: Michael Hytha at firstname.lastname@example.org