"A Spectacular Breach Of Trust" - Former CalPERS CEO Sentenced To Prison For Bribery

Tyler Durden's picture

Former California Public Employees' Retirement System (CalPERS) CEO Federico Buenrostro was sentenced Tuesday by a federal judge to four and a half years in prison for accepting more than $200,000 in bribes trying to steer investments.

Buenrostro pleaded guilty to fraud and bribery charges two years ago, saying he started taking bribes around 2005 to try and get CalPERS staff members to make investment decisions that helped Alfred Villalobos, an investment manager and former board member of the fund. The judge called the case "seriously troubling", and said it reflected a "spectacular breach of trust for the most venal of purposes, which is self-enrichment."

From the Los Angeles Times

A federal judge Tuesday sentenced the former head of the California Public Employees' Retirement System to 4 1/2 years in prison after the former chief executive acknowledged accepting more than $200,000 in bribes and trying to steer investments to help an associate.

 

Senior U.S. District Judge Charles Breyer called the case against Federico Buenrostro Jr., head of the nation's largest public pension fund, “seriously troubling” and said it reflected a “spectacular breach of trust for the most venal of purposes, which is self-enrichment.

 

Buenrostro pleaded guilty to fraud and bribery charges two years ago, saying he started taking bribes around 2005 to try to get CalPERS 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 and a trip around the world and allowed Villalobos to pay for his wedding in Lake Tahoe. Villalobos killed himself last year, weeks before he was set to go on trial. He had pleaded not guilty to fraud charges.

 

“I take full responsibility and accept the consequences of the actions I took,” Buenrostro, in a blue jail outfit and leg irons, told the judge before he was sentenced. “I'm humiliated, embarrassed and deeply ashamed of my actions.”

The sentencing is the result of a years-long investigation into money management middlemen who helped clients win investment business from the fund which as about $290 billion in assets. Buenrostro faced up to five years in prison but the US attorney's office asked for a four year term, citing Buenrostro's cooperation.  As part of a plea deal, Buenrostro acknowledged giving Villalobos access to confidential investment information and forging letters that enabled firms connected with Villalobos to collect a $14 million commission on $3 billion worth of pension fund investments. The former CEO has also agreed to pay back $250,000 to the state.

"This was one of the most startling and serious cases of public corruption in the history of the state of California. That being said, Mr. Buenrostro did come forward and admit to what he had done." said Tim Lucey, representing the US attorney's office.

As far as Villalobos, after pleading not guilty to fraud, he took his own life just weeks before he was set to go on trial.

Sadly, this isn't something that members of CalPERS needed to experience. With the fund already severely underfunded as it is, learning that the CEO was crooked and diverted funds to investment managers due to bribes instead of performance and strategy is just kicking the members while they are down.

Funding ratio estimates for CalPERS

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BeaverCream's picture

Detroit's municipal pension fund was corrupt, several people got prison time. My guess is that they're all corrupt, you just need to grease the right palms and you'll stay out of prison. Hell, bring in Hillary for a speech or two...

Looney's picture

This asshole must’ve been caught in bed with his plumber as well.
Plumbers, it seems, are becoming “Public Enemy NUMBER TWO”. ;-)
Looney

knukles's picture

See, this is what happens when politicians are those ultimately responsible for decision-making. 
The Trustees are Political Appointees.
Everything goes to shit.  Government IS the Problem

Takeaction2's picture
Takeaction2 (not verified) BeaverCream Jun 1, 2016 12:32 PM

HEY YOU FUCKS at ZEROHEDGE.........I am pissed.  The new format of this site is horrible.  It will make people leave...and the new format will minimize the fun in commenting.  I can tell you from my standpoint....I will NOT be here as often as before.  Please revert it back.  DIGG in the old days learned this the hard way also.....  Top news site on the net....changed format...never recovered.  (Look at your internet traffic numbers...they are going down...right?)  I hope you read this and understand...this is NOT better.

Bastiat's picture

This new format works much better on mobile devices.

Raging Debate's picture

Bastiat - I agree and I like it. Good to see law enforcement and judges cleaning up the corruption. I want my Republic back and we shall have it. Unfortunately, a few politicos did some very treasonous things so clean up can be messy. Stay hedged and then go have some fun. Get out of fhe house and down to the local pub and spread some money around. Its a short life. 

jeff montanye's picture

so realize it is for the children.  they need to know.

 

re: the calpers perp: the real surprise to me is how cheaply he was acquired.

MalteseFalcon's picture

"Former CalPERS CEO Federico Buenrostro was sentenced Tuesday by a federal judge to four and a half years in prison...

Buenrostro pleaded guilty to fraud and bribery charges two years ago....."

Did it take this guy two years to find his toothbrush?


robertsgt40's picture

And the LIBOR riggers walk?

SomethingSomethingDarkSide's picture

Good, hopefully every sorry sack of shit believing in this system takes a hit and learns the lesson.

Shlomo Schwartzman's picture
Shlomo Schwartzman (not verified) Jun 1, 2016 11:43 AM

...and another set of laws for Goyim.

N0TaREALmerican's picture
N0TaREALmerican (not verified) Shlomo Schwartzman Jun 1, 2016 12:09 PM

Sounds like wap mobster to me.

mary mary's picture

Lots of mafia in Hollywood, I imagine.  But never been there....

Richard Chesler's picture

Federico Buenrostro. His biggest mistake was not being a member of the tribe.

Consuelo's picture

 

 

All for a measly $200k...?

 

"The judge called the case "seriously troubling", and said it reflected a "spectacular breach of trust for the most venal of purposes, which is self-enrichment."


Oh, the righteous indignation...   Hey Judge, got any of your leftover inidignation for Blankheeb & friends...?

 

Didn't think so...

Radical Marijuana's picture

I agree, Consuelo.

Such penalities are few and far between, and relatively trivial in their overall effects upon the fundamentally fraudulent financial accoutning systems.

To put "California Public Employees' Retirement System (CalPERS)" in perspective, take a look at http://cafr1.com/

Ouroboros of Incorporated Robbery!

Together, government mandated institutions, such as CalPERS, now own the overwhelming vast majority of all publicly traded corporations. 

"Collective governement" already owns the economy!

Professional money managers follow each other in the herds.

overmedicatedundersexed's picture

banana republics of the third world survive on corruption ..welcome to the third world america.. fundamental change we can believe in chumps. obuma's son would look like this creap.

RopeADope's picture

He was only now sentenced?

The glacial speed at which Lady Justice moves against former public officials is seriously troubling.

Blano's picture

Dear ZH,

If it ain't broke, why fix it?

So far the new changes from the desktop are not pleasing to the eyes at all, and looking just now on my phone, ZH was just a jumble of something.  The site looks like some kind of 80's video game.

Not that you will, but please go back to some version of what you had prior. 

Edward Morbius's picture

+1000

 

The new format blows.

Dubaibanker's picture

New site sucks!

I completely agree....

Waste of space on both sides of the screen.....it keeps shuffling due to the unnecessary ads.....unnecessary tweaks to what never needed to be fixed....:(

Takeaction2's picture
Takeaction2 (not verified) Blano Jun 1, 2016 12:33 PM

NEW SITE IS HORSE SHIT......if they keep this "UPDATE"  I will not be here as often...  I really loved this place...then you people always have to fuck with a good thing.

Implied Violins's picture

Really. Makes me wonder if George Soros bought ZH and is purposefully tanking it...

peddling-fiction's picture

Torment the ZH posters wit zee interfaiz.

carbonmutant's picture

CalPERS is a special case of corruption... This is the tip of the iceberg...

PS I have two different formats on different windows in the same Browser???

More Ammo's picture

Only the tip, I promise...

rosiescenario's picture

Who chose this guy?

carbonmutant's picture

The reason we're hearing about this is because he wasn't sharing the proper percentage...

Pumpkin's picture

Breach of trust?  Ask any politician, there is no such thing.

financialrealist's picture

like cockroaches, for every one that gets caught, there's a dozen that don't...threw away everything for a couple hundred grand...which as CEO for Calpers was probably 1 years salary (guess)...

also: "This was one of the most startling and serious cases of public corruption in the history of the state of California."   Bullshit...City of Bell CA makes this look like amateur hour. 

Colonel Klink's picture

I'm humiliated, embarrassed and deeply ashamed of my actions, that I got caught.

FIFH

Raging Debate's picture

Enjoy your time in the steel pagoda dickwad. No, not everyone is going to jail but I am pleased some Judges are growing some nut.

Katos's picture

A whopping four years for his breach of trust? You or I would have spent the rest of our lives in jail for far less. Seems to be just another slap on the wrist for high rollers.

Nero_Hedge's picture

He's got a mal rostro now

Grimaldus's picture

I guarantee you this guy is a progressive. Just goes to show:

To have a crime ripping off citizens, you must first have progressives.

 

 

 

 

 

 

Grimaldus

N0TaREALmerican's picture
N0TaREALmerican (not verified) Grimaldus Jun 1, 2016 12:24 PM

Is everybody leaching off Big-MIC and Big-Ag a "progressive" too?

Nero_Hedge's picture

Really? Are you serious with that comment? GTFO if so because it's ridiculous. Was Cheneys 9/11-Iraq-Halliburton love triangle the work of a "progressive" then too?

indaknow's picture

It might be easier to just throw all CEO's in jail and let God sort them out.

Mind the GAAP's picture

He should've been indicted as soon as he became the CEO just for having the name, 'Federico Buenrostro'.  How can you NOT be completely corrupt when you're born into a name like that?

rtalcott's picture

Only $200k...Richardson's buddies here in NM made more than that from a much smaller fund.

UndertheDRADIS's picture

I'm humiliated, embarrassed and deeply ashamed of my actions.” . . .

 

Translation: I'm humiliated, embarrassed and deeply ashamed that I got caught. Would it be fitting to put his family in the street as a warning to the others?

mary mary's picture

He should commit seppuko. Like the other guy did.

peddling-fiction's picture

Seppuko but in the back. Or front and back.

VAD's picture

Ya mean Calpers is just a big ass slush fund?  Say it ain't so!

rlouis's picture

"Sadly, this isn't something that members of CalPERS needed to experience. With the fund already severely underfunded as it is, learning that the CEO was crooked and diverted funds to investment managers due to bribes instead of performance and strategy is just kicking the members while they are down."

 

I think it is the taxpayers that are kicked in the balls for the umpteenth time, as we have to make public employee pensions whole. Mother ##@$%%&*!!! (sorry for the rant, please excuse my #*)

MalteseFalcon's picture

Don't worry.

Moonbeam got your back.

nmewn's picture

Spectacular! Unprecedented! Historical even.

any_mouse's picture

Hardly spectacular. $200K, pocket change to Jamie Dimon. Jefferson County bribes were > $1MM.

The second news item is more tanker glut porn.

It's been a while since we have had destroyed city in Syria porn.