Arizona Public Safety Personnel Retirement System, Phoenix, has been cleared of criminal wrongdoing regarding real estate valuations, spokesman Christian Palmer said.
The investigation involved the valuation by the $8.1 billion pension fund of around $340 million in real estate assets, which were part of a joint venture between Desert Troon Cos. and PSPRS, according to sources, documents and interviews.
The pension fund announced Monday that it had received a letter from Elizabeth Strange, U.S Attorney for the District of Arizona, which said that her office’s joint investigation with the FBI had determined that “we do not believe PSPRS committed any criminal misconduct” concerning “certain valuations decisions and disclosures.”
The letter from Ms. Strange also noted that “this office takes no position on civil or administrative liability, however, as our review focused exclusively on whether PSPRS engaged in criminal conduct in violation of federal law.”
Three of the pension fund’s portfolio managers, as well as its chief investment counsel, had resigned in 2013 over the valuation of some of the properties in Desert Troon-managed portfolios.
A report by Arizona’s auditor general in November 2013 requested by PSPRS said relying on fair values was appropriate but recommended downward adjustments totaling $20.3 million.
“From our perspective we feel vindicated, to say the least, even though we’ve known all along we had done nothing wrong, the allegations were not true and they were never true,” said Brian Tobin, chairman of PSPRS’ board of trustees.