Former CalPERS CEO Federico R. Buenrostro's guilty plea earlier this month revealed new details and disclosures in the corruption scandal that engulfed the nation's largest defined benefit plan.
Sources say his admissions could result in expanded criminal charges for his co-defendant, former CalPERS board member Alfred Villalobos, from whom Mr. Buenrostro admitted he accepted $200,000 in cash bribes. Mr. Villalobos became a placement agent once he left the board of the California Public Employees' Retirement System, Sacramento.
The federal charges against both men were narrowly focused and did not address the bribes.
Another possibility, the sources said, is that federal prosecutors could seek indictments against two former CalPERS board members, Kurato Shimada and Charles Valdes. They also could enlist former board members and former clients of Mr. Villalobos to testify against him.
Mr. Buenrostro in his July 11 statement in federal court said two unnamed board members received valuable casino chips before voting to approve a contract with a pharmacy benefits administrator. Sources said he was referring to Messrs. Shimada and Valdes.
With the admission of the cash bribes, prosecutors are expected to review Mr. Villalobos' list of clients to see what, if any, additional evidence of illegal activity can be brought to the surface.
Mr. Villalobos received more than $50 million in fees — including at least $20 million from private equity giant Apollo Global Management — for helping his clients win investment contracts from CalPERS during the six years Mr. Buenrostro was CEO, according to a special review commissioned by CalPERS.
Mr. Villalobos' clients also included CIM Group, a real estate investment manager; private equity managers Aurora Capital Group and Aries Capital Partners; and Pacific Corporate Group LLC, a private equity consultant and manager of managers, the special review said.
It's unclear how many clients Mr. Villalobos had because he was not required to register with state regulators. His firm, ARVCO Capital Research LLC, went out of business in May 2013.
PCG was fired by CalPERS in 2010. The review questioned whether it was a conflict of interest for PCG to find private equity investments for the pension fund while managing money itself.