Fred Buenrostro, California Public Employee Retirement System (CalPERS) CEO gets 54 months for corruption and fraud

Posted By CotoBlogzz

Rancho Santa Margarita, CA  – Fred Buenrostro, the former Chief Executive Officer of the California Public Employee Retirement System (CalPERS) was sentenced today to 54 months in prison for corruption and fraud charges stemming from a conspiracy to trade official acts for cash and benefits, according to announcement by  U.S. Attorney Brian J. Stretch, Federal Bureau of Investigation (FBI) Special Agent in Charge John F. Bennett.  The sentence follows Buenrostro’s guilty plea entered July 11, 2014. 

Buenrostro, 67, of Sacramento, is the former Chief Executive Officer (CEO) of CalPERS and admitted that in 2004 he began receiving secret benefits from a placement agent for the purpose of influencing him in the exercise of his powers and duties as CEO.

 Buenrostro admitted the placement agent gave him approximately $250,000, as well as gifts, domestic and international travel, meals, entertainment, and payment for Buenrostro’s wedding.  

Further, Buenrostro admitted he also improperly received employment at ARVCO Capital Research LLC (ARVCO) after he left CalPERS in May of 2008. In exchange, Buenrostro attempted to influence the CalPERS investment staff and Board to the benefit of the placement agent and his clients, and provided the agent with access to CalPERS’ confidential information relating to investments, internal deliberations, and other proprietary matters.

In addition, Buenrostro conspired to create a series of fraudulent investor disclosure letters in a scheme to secure fees from a private equity firm based in New York City and agreed with a co-conspirator to make false misrepresentations to, and concealed information from, the Securities and Exchange Commission (SEC), the USPIS, and the FBI after these agencies opened investigations into the operations of ARVCO and its role as a placement agent in connection with CalPERS' investments. 

Buenrostro currently is in custody and will begin to serve his term immediately. 

Assistant United States Attorneys Timothy J. Lucey and Philip A. Guentert are prosecuting the case with the assistance of Laurie Worthen and Beth Margen.