Courts & Crime

California sues ex-state pension fund officials, alleging fraud, kickbacks

In a sweeping portrait of fraud at the nation's largest public pension fund, state officials have accused CalPERS' former chief executive of taking kickbacks from a former board member who was trying to steer investment dollars to his clients.

In a lawsuit, the state said former Cal- PERS board member Alfred Villalobos paid for former CEO Fred Buenrostro's wedding, flew him around the world and promised him a job and a Lake Tahoe condo when he left the pension fund. Both promises were kept.

Villalobos has earned tens of millions of dollars as a placement agent -- a middleman who wins pension fund investments for clients -- since leaving Cal- PERS' board in 1995.

The suit against Buenrostro, Villalobos and Villalobos' firm represents the most serious charges yet in the influence-peddling scandal swirling around the California Public Employees' Retirement System. Close ties between the two men were first reported last fall in The Bee.

Officials won a court order freezing Villalobos' assets to keep him from paying casino debts with the millions he earned from CalPERS deals.

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