California AG sues ex-CalPERS officials for fraud

Attorney General Jerry Brown announced today that he’s filed a civil lawsuit against former executives of CalPERS for securities fraud. The state’s public employee pension fund is the biggest in the country — with $200 billion in assets.

The attorney general says former CalPERS board member Alfred Villalobos worked as an agent for investment companies. He’d find investors to buy shares in private equity funds — and then collect a commission on the sale. The state’s lawsuit says Villalobos gave all kinds of lavish gifts to former CalPERS boss Federico Buenrostro.

Attorney General Brown says the aim was to influence the way the state’s giant public employee pension fund would invest its billions.

“We’re talking about around the world trips,” Brown said “We’re talking about limousine rides. We’re talking about promises of jobs. And all of that really doesn’t pass the smell test — and it doesn’t pass the tests of the laws of California.”

Brown says over a few years, CalPERS bought nearly $5 billion in equity funds from the company that employed Villalobos — and Villalobos collected $47 million dollars in commissions.

“We’re talking about civil servants of California and state and local government,” Brown said. “They don’t make a lot of money. They’re counting on these pensions. And this just becomes a treasure trove for people to live the high life.”

Brown — who’s running for governor — wants to recoup the $47 million in commissions. He’s seeking damages, too. Altogether, the attorney general says he hopes to restore $70 million to the CalPERS pension fund.

In a statement, CalPERS executives applauded Brown’s efforts.

More in Local

Comments

blog comments powered by Disqus