Two former top officials of the nation’s largest public pension fund, CalPERS, were indicted by a federal grand jury in the bribery case Monday, reports the Sacramento Bee:
Brian Stretch, a spokesman for the U.S. attorney in San Francisco, said former CalPERS Chief Executive Fred Buenrostro and former board member Alfred Villalobos were named in a criminal case late this morning.
Stretch said the two men were charged with conspiracy to commit fraud, conspiracy to obstruct justice and making false statements to federal agents. […]
State officials already named the two men in a 2010 civil lawsuit, charging that Buenrostro took bribes from Villalobos to steer business toward Villalobos' clients. The two men denied any wrongdoing.
The allegations are the first criminal charges in a case that began in October 2009 but court documents show the criminal investigation started the following spring.
Buenrostro and Villalobos are accused of creating a series of fake letters designed to make sure Villalobos got his commissions.
According to a separate lawsuit filed last year by the SEC, Buenrostro signed the letters after an unidentified CalPERS investment official refused to do so. The SEC lawsuit, which is still pending, said it appeared Buenrostro used his computer to copy CalPERS' logo from his business card onto the stationery.
With the letters in hand, the firm obtained $3 billion in CalPERS investments between August 2007 and April 2008 – earning Villalobos around $14 million in commissions – according to the criminal indictment.
Buenrostro, 64, could face up to 40 years in prison and Villalobos, 69, could serve up to 30 years.