Former CalPERs CEO Indicted in $14 Million Fraud Case
March 18, 2013
The owner of a financial services firm and a former CalPERs official were indicted by a federal grand jury for allegedly fraudulently taking $14 million from a company that handles CalPERs investments, according to the office of U.S. Attorney Melinda Haag .
Businessman Alfred Villalobos, 69, and former CalPERs CEO Fred Buenrosto, 64, were charged with conspiracy to defraud the United States, among other charges, in a case dealing with a $3 billion investment by CalPERs into funds managed by Apollo Global Management, a New York City private equity company, the U.S. Attorney General’s Office says.
Villalobos’ company ARVCO Capital Research LLC helped Apollo secure the CalPERs investments, but didn’t get investor disclosure letters documenting the companies’ legal relationship, the U.S. Attorney General’s Office says. Apollo required the letters, which were supposed to come from CalPERs, before the company would pay ARVCO for its services.
The U.S. Attorney General’s Office says Villalobos and Buenrosto conspired to create a series of fraudulent investor disclosure letters that were sent Apollo, resulting in the payment of approximately $14 million dollars to ARVCO.
The last fraudulent letter was sent in June 2008, a few months before Buenrosto retired from CalPERs, the U.S. Attorney General’s Office says. A month later Villalobos hired him to work for ARVCO.
The two men made their initial appearance in federal court in San Francisco on March 18, 2013, and are currently out on bond, the U.S. Attorney General's Office says.