Former CalPERS CEO Admits to Fraud, Bribery

July 11, 2014 ( – A former CEO of the California Public Employees Retirement System (CalPERS) has plead guilty to a charge of conspiracy to commit bribery and fraud.

Federico R. Buenrostro entered his plea to a federal U.S. district court, admitting that he took $200,000 in cash and other bribes from former CalPERS board member Alfred Villalobos to influence the pension fund’s investment decisions, according to a news report in the Sacramento Bee. While there has not yet been a sentencing recommendation, Buenrostro could get up to five years in prison and a $250,000 fine.

The plea stems from a March 2013 indictment against Buenrostro, alleging that he and Villalobos fabricated documentation that authorized a private equity firm, Apollo Global Management, to pay Villalobos commissions for representing the firm. Apollo paid Villalobos $14 million in commissions after he secured $3 billion worth of CalPERS investments commitments in 2007 and 2008, according to the news report.

The Securities and Exchange Commission also filed charges against the two men in 2012 regarding these allegations (see “SEC Charges Former CalPERS CEO in Placement Agent Fee Scheme”).

According the allegations, Apollo Global Management asked for documentation from CalPERS to acknowledging that it knew Villalobos was working for the firm. When an unnamed CalPERS official refused to supply Apollo with such documentation, Buenrostro and Villalobos forged them and submitted the false paperwork to Apollo.

In a statement, CalPERS condemned Buenrostro’s actions and said the pension fund has taken aggressive steps to implement policies and reforms that strengthen accountability and ensure full transparency.