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Administration December 1, 2011
Court Denies Summary Judgment in CalPERS Kickback Case
December 1, 2011 (PLANSPONSOR.com) - A California judge has rejected a request from prosecutors to declare that a former state pension board member orchestrated illegal investment deals and should surrender $40 million in fees.
Reported by Rebecca Moore
The Associated Press reports prosecutors said there was enough evidence for the judge to rule before trial, but Los Angeles County Superior Court Judge John Reid found key issues remained in dispute, according to a proposed ruling posted on the court’s website.
The state attorney general sued Alfred Villalobos in May 2010, claiming he and his company operated without a license while reaping millions of dollars in fees for steering California Public Employees Retirement System (CalPERS) investments to clients (see Former CalPERS Officials Sued over Investment Scheme). The lawsuit alleged he lavished CalPERS officials with kickbacks to gain influence at the nation’s largest public pension fund.
Villalobos, a former Los Angeles deputy mayor who served on the CalPERS board from 1992 to 1995, has denied the charges. The lawsuit stalled after Villalobos declared bankruptcy, but a court ruling cleared the way for legal proceedings to resume separately from the bankruptcy case. A trial is tentatively scheduled for next year.
According to the Associated Press, Lynda Gledhill, a spokeswoman for state Attorney General Kamala Harris, said the ruling “says nothing at our ability to prevail at trial.” An attorney for Villalobos did not immediately return a phone call from the Associated Press seeking comment.