Asset Freezing: California freezes assets of former CALPERS officers
California's Attorney General Edmund G. Brown Jr. has filed a civil suit against former California Public Employees Retirement System (CalPERS) Board Member Alfred Villalobos, his company ARVCO Capital and former CalPERS CEO Federico “Fred” Buenrostro, charging them with fraud.
“Working as a placement agent for ARVCO, Villalobos spent tens of thousands of dollars to lavishly entertain key senior executives at CalPERS, who then influenced the Board to authorise investments that generated over USD40 million in commissions to Villalobos,” explained Brown. “None of these actions were disclosed as required by law as state pension holders and taxpayers have every right to expect.”
According to the complaint, Villalobos influenced these CalPERS officials by, among other things, taking two of them on an around-the-world trip, taking another on a private jet trip to New York, and giving Buenrostro a USD300,000 job and a condo when he left the pension fund.
Brown also obtained a court order to freeze Villalobos’ assets and place them in receivership to recover the more than USD40 million in commissions that Villalobos earned during the period alleged in the complaint. Brown explained that the freeze order, granted on the 6 May, was necessary because Villalobos has transferred real estate suspiciously, has lost tens millions of dollars in high-stakes gambling, and maintains over 20 bank accounts. Among the assets placed under receivership are two Bentleys, two BMWs, a Hummer H2, art work worth more than USD2.7 million, USD6 million in yet-to-be-paid placement-agent commissions, and 14 pieces of real property in California, Nevada and Hawaii.
Specific charges allege that:
• Villalobos and ARVCO falsely represented that they had the required securities licenses and complied with all laws;
• Defendants gave, accepted, and failed to disclose gifts;
• Villalobos and ARVCO submitted bogus disclosure forms.
In addition to a permanent order preventing the defendants from violating state securities and unfair competition laws, and the imposition of civil penalties, Brown seeks to recover the more than USD40 million in placement agent commissions that Villalobos and ARVCO collected. The receiver appointed by the court will be charged with recovering the money.
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