Written by The Business Journal Staff
(AP) — Federal prosecutors want the former head of the nation’s largest public pension fund sent to prison for four years after he acknowledged accepting more than $200,000 in bribes and trying to steer investments to help an associate.
A judge on Tuesday in San Francisco was expected to sentence Federico Buenrostro, former chief executive of the California Public Employees’ Retirement System. He pleaded guilty to fraud and bribery charges two years ago, saying he started taking bribes around 2005 to try to get staff members to make investment decisions that helped Alfred Villalobos, an investment manager and former board member of the pension fund.
Buenrostro said he accepted cash, a trip around the world and allowed Villalobos to pay for his wedding in Lake Tahoe, California. Villalobos killed himself last year, weeks before he was set to go on trial. He had pleaded not guilty to fraud charges.
Buenrostro’s guilty plea came out of a yearslong investigation into the role of money-management firm middlemen, called placement agents, in helping clients win investment business from the pension fund. The fund manages health and retirement benefits for state employees and has about $290 billion in assets.
As part of his plea deal, Buenrostro acknowledged giving Villalobos access to confidential investment information and forging letters that allowed firms connected with Villalobos to collect a $14 million commission on $3 billion worth of pension fund investments.
The former executive faces up to five years in prison, but the U.S. attorney’s office asked for a shorter term last week, citing Buenrostro’s cooperation in the case against Villalobos. He also has agreed to pay back $250,000 to the state, prosecutors said.
They sought the shorter sentence despite Buenrostro getting sent to jail when he violated the terms of his probation on a misdemeanor domestic violence charge by making contact with the victim, authorities say. He had pleaded no contest in that case in March.
Still, prosecutors said his actions should not “nullify his hard work to provide information to the Department of Justice and others while fully embracing the full scope and impact of his own corrupt conduct.”