2 Indicted in Teachers’ Pension Fund Scheme

The fugitive former chairman of the state Teachers’ Retirement System and a Beverly Hills lawyer were charged in a federal indictment Friday with taking $1.55 million in a scheme to arrange a $50-million loan from the teachers’ pension fund for a financially shaky oil drilling venture.

The long-expected indictment by a federal grand jury in Sacramento came 2 1/2 years after the FBI began a nationwide manhunt for the former state official, Gilbert W. Chilton, a one-time savings and loan executive appointed in 1982 to the retirement board by former Gov. Edmund G. Brown Jr.

Federal authorities warned that Chilton, accused of bribery and extortion, is considered armed, dangerous and possibly suicidal. He has been reported to be living luxuriously in the Caribbean.

Also named in the three-count indictment was Beverly Hills lawyer Anthony J. Truex, who was accused of acting as the conduit for alleged bribe money that was funneled from the Colorado oil company, Txpacco Inc., to Chilton in return for his help in arranging the 1982 pension fund loan.

The indictment, announced by U.S. Atty. Donald B. Ayer, for the first time gave details of how money allegedly was moved from Denver to Beverly Hills through a series of wire transfers to dummy corporations. The transactions also involved the purchase of two cars for Chilton, including a $46,000 Mercedes-Benz, for his role in securing the $50-million loan, the indictment said.

State officials have recovered the $50 million in bonds that the $15-billion pension system put up to secure the loan.

Ayer said he expects Truex to appear in U.S. District Court in Sacramento “in the next several weeks” to answer charges. Attempts by The Times to reach Truex were unsuccessful. A telephone answering service said the attorney was not available.

The U.S. attorney’s office, hoping to produce leads on Chilton, also released a photograph of a woman, identified as Cheryl A. Ciccarelli, who is believed to be Chilton’s wife.

Ayer said the investigation into the loan transaction is continuing and that others could be involved. He would not comment on how much, if any, of the $1.55 million has been recovered.

The indictment said the bribery and extortion scheme was hatched during a meeting at a Beverly Hills hotel after Chilton was elected head of the retirement board in 1982. At the meeting were Chilton, Truex and the late Charles Raymond, president of Txpacco. The deal centered on Chilton’s using his influence as pension fund chairman to push through the $50-million loan to Txpacco, the indictment said.

Chilton got the loan approved with the active support of state Controller Ken Cory, who sat with him on a three-member investment committee that recommended the transaction. Cory has said that he was duped by Chilton and that he was the one who first grew suspicious and notified law enforcement authorities.

The indictment charged that a portion of the $1.55 million in payments to Chilton and Truex was funneled into a dummy corporation, called Fossil Fuels Financial Consultant Inc., set up for Chilton. In addition, another corporation, Foreign Development Corp., was formed especially for Raymond, the indictment said.

Release of Funds

The indictment said Chilton personally went to Denver to close the loan on Sept. 19, 1982, and a day later approved the release to Txpacco of $2 million from retirement system loan money.

On Sept. 27, $1 million was transferred from Denver to Beverly Hills, and three days later Truex deposited $387,000 into Chilton’s Fossil Fuels account, the indictment charges. In addition, the indictment alleges that Truex gave Chilton a cashier’s check for $46,496 to buy a Mercedes-Benz and another check of $11,400 to buy a Toyota sports car.

Another wire transfer of $400,000 was made in November, of which $200,000 was put into Chilton’s account, according to the legal documents. The indictment said $150,000 more was transferred by Raymond to Truex in February, and a day later $133,000 in cashier’s checks was given to Chilton.

The indictment charges Chilton and Truex with conspiracy to affect commerce by extortion, extortion under the color of official right, and interstate travel in aid of a bribery and extorting scheme.