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Bribery Scheme Unravels at CalPERS, Nevada Man Indicted
A federal grand jury in San Francisco indicted Alfred J. Villalobos, 67, of Reno, Nev., on charges of conspiracy to commit corruption offenses and to defraud the United States, engaging in a scheme to conceal material facts from the United States, and conspiracy to commit mail fraud and wire fraud.
Villalobos, a placement agent through his financial services firm, ARVCO Capital Research LLC, secured a $3 billion investment by CalPERS into funds managed by Apollo Global Management, a private equity firm based in New York City.
The indictment alleges that Villalobos conspired with Fred Buenrostro, the former Chief Executive Officer of CalPERS, in a bribery scheme that began as early as 2005. Villalobos provided Buenrostro with secret benefits, including payments of $250,000, gifts, domestic and international travel, meals, entertainment, payment for Buenrostro’s wedding, and his subsequent employment at ARVCO after he left CalPERS in May 2008.
In exchange, Buenrostro provided Villalobos with access to CalPERS’ confidential information and attempted to influence the CalPERS investment staff and Board, as directed by Villalobos. The investigation revealed that Villalobos and Buenrostro conspired to create fraudulent Investor Disclosure letters that were transmitted to Apollo, a move that enabled ARVCO to receive approximately $14 million in fees.
When investigations into ARVCO’s operations were opened, Villalobos and Buenrostro agreed on a false version of facts and made misrepresentations to the Securities and Exchange Commission, the U.S. Postal Inspection Service, and the FBI.
Buenrostro, 65, pleaded guilty to conspiracy in 2014 and was released on bond. Villalobos is currently released on bond and awaits arraignment, with a status hearing scheduled for August 8, 2014.
The maximum statutory penalty for conspiracy to defraud the United States and for a scheme to conceal material facts from the United States is five years of imprisonment, a $250,000 fine or twice the amount of gain or loss, whichever is greater, three years of supervised release, and a $100 special assessment.
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Key Facts
- State: California
- Category: Public Corruption|White Collar Crime
- Source: DOJ Press Release ↗
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