Bloomberg News

Ex-Calpers CEO Buenrostro to Plead Guilty, Lawyer Says

June 30, 2014

Federico Buenrostro, former chief executive officer of California Public Employees’ Retirement System, will plead guilty to a conspiracy charge that includes allegations he backdated documents so a placement agent would get paid and then lied about it, his lawyer said.

Buenrostro, who led the biggest U.S. pension fund from 2002 to 2008, told a federal judge in San Francisco today that he is cooperating with the U.S. Justice Department and will testify against the agent and co-defendant, Alfred Villalobos, according to William Portanova, Buenrostro’s attorney. Buenrostro will enter the plea July 11, Portanova said in a phone interview.

Buenrostro faced conspiracy and other charges for allegedly helping to create false documents so that Villalobos could get $14 million in fees for arranging a $3 billion investment by Calpers in funds managed by Apollo Global Management LLC. (APO:US)

Buenrostro will “absolutely” testify, “and he has a lot to say,” Portanova said. “He’s going to tell the truth in a story that’s been a long time coming.” Portanova said the plea-bargain isn’t final and declined to discuss its details.

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.

Lili ArauzHaase, a spokeswoman for U.S. Attorney Melinda Haag in San Francisco, declined to comment on the case.

Placement Agent

Villalobos, founder and managing director of Arvco Capital Research LLC, allegedly acted as a placement agent in helping Apollo to secure investments by Calpers 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 was accused along with Villalobos, 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.

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: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net Fred Strasser


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Companies Mentioned

  • APO
    (Apollo Global Management LLC)
    • $22.95 USD
    • -0.21
    • -0.92%
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