A former chief executive of Calpers, the largest U.S. public pension fund, plans to plead guilty in a federal conspiracy case, according to his lawyer.
In March 2013, former California Public Employee Retirement System CEO Fred Buenrostro was indicted by a San Francisco grand jury and charged with conspiracy in connection with a scheme involving fraudulent documents related to a $3 billion investment by the retirement system in funds managed by Apollo Global Management.
While Buenrostro had proclaimed his innocence, his lawyer, William Portanova said his client had decided to cooperate with the prosecution against his co-defendant, Alfred Villalobos, a former member of the pension fund’s board.
“Sometimes it takes a long time for people to own up to what they were trying to pretend never happened,” Portanova told Reuters on Monday. “It’s never too late to do the right thing.”
The indictment says Villalobos and Buenrostro conspired to create a series of fraudulent investor disclosure letters sent to Apollo. The private equity company had hired Villalobos’ firm, ARVCO Capital Research LLC, to provide placement agent services to secure investment business at the pension fund.
The two men also made false statements to authorities investigating the disclosure letters. In 2008 and 2009, Apollo paid ARVCO approximately $14 million in fees related to the Calpers investments. Villalobos’ lawyer could not immediately be reached for comment.
Buenrostro retired as CEO of Calpers on June 30, 2008. He began working as an ARVCO consultant around July 1, 2008, according to court documents.
Buenrostro’s jury trial had been set to begin on July 8. He is now expected to enter a plea on July 11.
(Reporting by Robin Respaut; editing by Andrew Hay)
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