California sues former CalPERS officials for fraud

Attorney General Jerry Brown promises more to come, including quite possibly criminal charges. Today, two former high-ranking CalPERS [the California public pension fund] officials were sued for fraud while acting as placement agents for investment firms wanting CalPERS to invest with them. Alfred R. Villalobos made $47 million doing this.

“Villalobos spent tens of thousands of dollars to lavishly entertain key senior executives at CalPERS, who then influenced the Board to authorize investments that generated over $40 million in commissions to Villalobos,” Brown said. “None of these actions were disclosed as required by law, as state pension holders and taxpayers have every right to expect.”

Villalobos is being sued for up to $95 million, including restitution and has multiple properties and bank accounts put in receivership.Other former and present CalPERS employees have also been sued.

Corruption is widespread in public pension funds across the country, Siedle said, noting that a bribery scandal that started a year ago in a New York state pension fund has spread to California.

“This is the first of the hammers to fall,” said a person familiar with the state investigation.

The Feds are also investigating CalPERS. See my article on CAIVN for more on this, and on the startling ability of CalPERS to lose huge sums in bad investments yet remain arrogant and condescending when questioned about it. Well, after today, maybe they’re not quite so arrogant… And even less so when some of them get sentenced to prison, like some NY state pension fund officials already have been.

Our system is corrupt. It’s time to take out the garbage.