Two California political insiders, including the former CEO of the California Public Employees’ Retirement System (CalPERS), have been charged with fraud by the Securities and Exchange Commission for allegedly trying to swindle an investment firm out of $20 million.
The San Francisco Chronicle reports:
“The SEC alleges that former CalPERS CEO Federico R. Buenrostro and his friend Alfred J.R. Villalobos fabricated documents given to New York-based private equity firm Apollo Global Management. Those documents gave Apollo the false impression that CalPERS had reviewed and signed placement agent fee disclosure letters in accordance with its established procedures.
In fact, Buenrostro and Villalobos intentionally bypassed those procedures to induce Apollo to pay placement agent fees to Villalobos’s firms. The false letters bearing a fake Calpers logo and Buenrostro’s signature were provided to Apollo, which then went ahead with the payments.
‘Buenrostro and Villalobos not only tricked Apollo into paying more than $20 million in placement agent fees it would not otherwise have paid, but also undermined procedures designed to ensure that investors like CalPERS have full disclosure of such fees,’ said John M. McCoy III, Associate Regional Director of the SEC’s Los Angeles Regional Office.” …
Last month, Medco Health Solutions coughed up $2.75 million to settle charges in a bribery case involving Buenrostro and Villalobos, inconnection with a $26-million prescription drug contract negotiated with CalPERS.