Judge confirms order freezing assets of former CalPERS board member being sued by state

Judge confirms freeze on assets in CalPERS lawsuit

SACRAMENTO, Calif. — A judge Friday confirmed an order freezing the assets of a former California Public Employees Retirement System board member who has been accused of fraud after agreeing with the state attorney general’s office that he might gamble away millions of dollars.

Los Angeles County Superior Court Judge John Reid extended a temporary order that was issued when the attorney general’s lawsuit against Alfred Villalobos was filed May 5.

The suit alleges Villalobos defrauded CalPERS by operating as a so-called “placement agent” without a license and awarded kickbacks to pension fund officials who steered investments to his clients.

“We will now move forward to recover the millions of dollars Villalobos made as part of his fraudulent scheme to improperly influence public pension fund investments,” Attorney General Jerry Brown said in a statement.

Villalobos has denied the charges and argued that without access to his accounts, he is unable to defend himself and provide for his family.

Placement agents are negotiators hired by money management firms to help them win business from investors. Villalobos’ attorneys argued in a brief that Villalobos initially was working as a “finder,” which is not required to obtain the same license.

The state is seeking to recover more than $40 million in placement agent commissions that Villalobos and his company collected.

Authorities earlier succeeded in freezing his 21 bank accounts and numerous luxury cars and homes. The lawsuit says Villalobos squandered $68 million and has outstanding gambling debts that would impede his ability to pay.

“Villalobos is such a good customer that Harrah’s casino provided a complementary penthouse suite to him for 20 months while repairs were made to his home,” Brown’s brief said.

Villalobos’ attorneys argued in their brief that the $47 million Villalobos earned in fees were paid by investment firms, not CalPERS.

“While Villalobos engaged in substantial gambling over the past years, his gambling was lawful and was fully disclosed on his tax returns,” his attorneys wrote.

The judge said in his ruling Friday that the defendants submitted almost no admissible evidence to refute the claim that Villalobos could squander his money.

“Mr. Villalobos’ ‘promise’ to cease gambling during the pendency of this action rings hollow,” Reid wrote.

Attorneys for Villalobos did not immediately return calls for comment.

Brown’s lawsuit also claims that Fred Buenrostro, a former CalPERS board member, had a standing job offer from Villalobos that included a Lake Tahoe condominium. After leaving the board, Buenrostro accepted the job and the condo.

Villalobos’ attorneys countered in their filing that Villalobos sold the condo to Buenrostro for more than $600,000, but that argument did not appear to sway the judge.

Reid the judge wrote in his ruling that the state showed that the defendants violated a bribery law punishable by imprisonment.

A trial date has not been set.