The California attorney general's office has agreed to a $20 million payment to settle a civil lawsuit accusing deceased placement agent Alfred Villalobos of bribing officials at the $285.7 billion California Public Employees' Retirement System, show court documents filed in U.S. Bankruptcy Court in Reno, Nev., on Tuesday.
The settlement said the bankruptcy estate of Mr. Villalobos' defunct firm, Arvco Capital Research, will pay $10 million in penalties and another $10 million to cover the state's legal fees.
“This settlement brings us one step closer to closing this unfortunate chapter in our history,” said Sacramento-based CalPERS general counsel Matthew G. Jacobs in an e-mail.
The state's lawsuit, filed in 2010, had demanded damages of $41 million and accused Mr. Villalobos and former CalPERS CEO Federico R. Buenrostro Jr. of participating in a scheme to commit capital to private equity firms that Mr. Villalobos represented as a placement agent.
Mr. Villalobos, who had denied wrongdoing, committed suicide on Jan.13, 2015, several weeks before his trial was to start on federal bribery charges.
The star witness at that trial was scheduled to be Mr. Buenrostro, who had pleaded guilty to a federal corruption charge in 2014 that he gave Mr. Villalobos more than $250,000 in cash bribes. Last month, in a separate settlement, Mr. Buenrostro agreed to repay the state a total of $250,000 in five yearly payments beginning in 2021.
Mr. Buenrostro is scheduled to be sentenced May 18 in U.S. District Court in San Francisco. Under sentencing guidelines, he could receive a five-year prison term. If that is the case, his payments would coincide with his release from prison.
