.
3/18/13, "Jury indicts former Calpers CEO for fraud scheme," Reuters
"A former chief
executive of Calpers, the largest U.S. public pension fund, was indicted
on federal conspiracy charges in connection with a scheme to commit
fraud, the U.S. Department of Justice said on Monday.
Former Calpers CEO Federico
Buenrostro was indicted by a San Francisco grand jury, as was Alfred
Villalobos, a former member of the pension fund's board. They were
charged in connection with the scheme involving fraudulent documents
related to a $3 billion investment by the retirement system in funds
managed by Apollo Global Management.
The
private equity company had hired Villalobos' firm, ARVCO Capital
Research LLC, to provide placement agent services to secure investment
business at the pension fund, formally the California Public Employee
Retirement System. He and Buenrostro conspired to create fraudulent
investor disclosure letters sent to Apollo, according to a statement
released by the U.S. Attorney for the Northern District of California.
Apollo paid ARVCO about $14 million in fees
after receiving the fraudulent letters, the statement said, adding that
ARVCO transmitted the last of the letters in June 2008, a few weeks
before Buenrostro retired from Calpers and was hired by Villalobos to
work for ARVCO.
The statement also
said the two men made false statements to authorities investigating the
disclosure letters, adding that the grand jury charged Buenrostro with
making a false statement and obstruction of justice.
The U.S. Securities and Exchange Commission last year charged the two men with scheming to defraud Apollo.
Buenrostro's lawyer and representatives for Villalobos could not be reached for comment.
Apollo
and Calpers have cooperated with long-running federal and state probes
of placement agent activity at the pension fund, and the investigations
spurred it to increase its oversight of placement agents....
Apollo said the allegations in the indictment are "troubling" if true. "Apollo has always followed best practices in
handling its placement agent relationships, and was not aware of any
misconduct engaged in by Mr. Villalobos during the time that he worked
with Apollo," the company said in a statement." via Zero Hedge
=======================================
Article a year ago on this in LA Times:
4/24/12, "SEC suit says two former CalPERS officials defrauded equity firm," LA Times, Marc Lifsher
"Former
CEO Federico Buenrostro Jr. and former director Alfred J.R. Villalobos
fabricated documents to dupe Apollo Global Management into paying $20
million in fees to secure investments from the public pension giant, the
suit alleges."...via Zero Hedge
.
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