Prosecutors boost efforts targeting ex-CalPERS officials
SACRAMENTO — Federal prosecutors are stepping up efforts to bring to trial two former officials of the California Public Employees’ Retirement System indicted on fraud, conspiracy and obstruction charges.
The U.S. attorney in San Francisco wants to move ahead quickly on criminal cases brought against Alfred J.R. Villalobos, a former CalPERS board member and deputy mayor of Los Angeles, and Federico Buenrostro Jr., a former chief executive of the pension fund. To do so, the Justice Department has asked federal and state agencies and judges to delay action on various pending lawsuits involving the two men.
A grand jury indicted Buenrostro, 64, of Sacramento and Villalobos, 69, of Reno, Nev., in March. Both subsequently pleaded not guilty and denied any wrongdoing.
Recent legal filings in state and federal courts in Los Angeles County, San Francisco and Reno asked judges to grant stays, halting lawsuits involving the two federal defendants. A U.S. trustee also requested that a federal bankruptcy judge deny ending Villalobos’ bankruptcy case.
“The court should stay any further civil discovery to prevent defendants from gaining unfair access to discovery beyond that allowed by the criminal discovery rules,” assistant U.S. attorney Timothy J. Lucey wrote to U.S. District Court in Nevada.
The action, said Philip Khinda, a Washington attorney who conducted a private review of the allegations in 2011 for CalPERS, “is a sure sign that federal prosecutors are committed to bringing these defendants to justice and sending them to prison.”
The charges stem from a scandal that enveloped the country’s largest public pension system three years ago. Central to the investigation is the role of Villalobos as a so-called placement agent, who was paid more than $40 million in fees to help private investment firms get CalPERS business.
According to the indictment, Buenrostro and Villalobos conspired to commit fraud by creating and sending phony documents detailing payments made to Villalobos by a New York private equity investment fund, Apollo Global Management. Apollo is not accused of breaking any law.
The U.S. attorney’s office declined to comment on the legal maneuvering. A CalPERS spokesman said the agency remains “committed to helping authorities pursue their case against those who have harmed CalPERS.”
In a related legal action, a federal trustee in Reno last week asked a U.S. Bankruptcy Court judge to deny a request to end an individual bankruptcy filed by Villalobos in 2010. In a filing, the trustee alleged that Villalobos allowed property to be “transferred, removed, and concealed” from his estate, in particular almost $500,000 worth of jewelry.
“Defendant’s false oaths and accounts and withholding of recorded information warrants denial of discharge,” wrote August B. Landis, the acting U.S. trustee.
Twitter: @marclifsher
