The former head of the nation’s biggest pension fund pleaded guilty in federal court in San Francisco to taking bribes and helping an associate collect millions in a fraudulent investment scheme.
Fred Buenrostro Jr. was charged with fraud and bribery stemming from his time as chief executive of CalPERS, the California Public Employees’ Retirement System, from 2002 to 2008, the San Jose Mercury News reported.
In his plea agreement dated July 11, Buenrostro said that Alfred Villalobos, who had served on the CalPERS board in the 1990s, took him on a trip around the world, gave him casino chips and paid for his wedding in exchange for favors.
Villalobos has denied the allegations and has not been charged with wrongdoing. He the target of an ongoing investigation.
Buenrostro was charged after a multi-year investigation into the role of placement agents who help clients win investment business from the $300 billion California pension system.
Buenrostro said he gave Villalobos access to confidential investment information and he forged disclosure letters letters allowing firms connected with Villalobos to collect $14 million worth of commissions on $3 billion of pension fund investments.
Buenrostro said he took $50,000 from Villalobos to lie to federal investigators in 2010 about their relationship.
Buenrostro faces five years in prison and a $250,000 fine when he’s sentenced in January.
The Securities and Exchange Commission charged both men in April 2012 for violating the antifraud provisions of the federal securities laws. The lawsuit is pending.
Julie DiMauro is the executive editor of FCPA Blog and can be reached here.