Federico R. Buenrostro, former CEO of CalPERS, was sentenced Tuesday to 4½ years in prison after pleading guilty to accepting bribes, ending the final chapter in a 3-year-old criminal corruption case.
Mr. Buenrostro already has been incarcerated. He was arrested in late April on assault charges against a former girlfriend, which resulted in his bail being revoked.
U.S. District Judge Charles Breyer in San Francisco called the scheme a “spectacular breach of trust for the most venal of purposes, which is self-enrichment.” The judge told the defendant that while he had a chance over a lengthy period to “turn back from this conduct,” Mr. Buenrostro instead “simply doubled down” on a “course of illegal conduct.”
Mr. Buenrostro, who was CEO of the $292.6 billion California Public Employees’ Retirement System, Sacramento, from 2002 to 2008, pleaded guilty in July 2014 to a charge of conspiracy to commit bribery and fraud. Mr. Buenrostro admitted he had received $200,000 in cash bribes — in paper bags and a shoebox — from placement agent and former CalPERS board member Alfred Villalobos as part of a plan to influence CalPERS’ investment decisions.
Mr. Villalobos shot himself to death in January 2015, several weeks before he was scheduled to go on trial on corruption charges. He had pleaded not guilty.
In his plea agreement in July 2014, Mr. Buenrostro said Mr. Villalobos flew him and another CalPERS board member, Charles P. “Chuck” Valdes, on an around-the-world junket that included stops in Dubai, Hong Kong and Macau and also hosted Mr. Buenrostro’s wedding at his home in Nevada.
Mr. Valdes was never formally charged with wrongdoing. He died in September 2014.
The corruption scandal also saw the implementation of new ethics rules at CalPERS, and the suspension and subsequent resignation of the head of CalPERS’ private equity program, Leon Shahinian.
A state lawsuit had said Mr. Shahinian was bribed by Mr. Villalobos after he accepted a lavish, all-expenses-paid trip to New York in 2007 on a private jet to attend the birthday party of Apollo Global Management Chairman and CEO Leon Black.
A few weeks later, Mr. Shahinian helped persuade the CalPERS board to invest $600 million with Apollo Global Management, the lawsuit said. Mr. Villalobos received a $13 million fee for arranging the transaction, the suit said.
Neither Mr. Shahinian nor Mr. Black was charged with wrongdoing.
In February, Mr. Buenrostro settled the state lawsuit, agreeing to pay back upon his release from prison the $250,000 he took in bribes over a five-year period. In March, the bankruptcy estate of Mr. Villalobos’ defunct firm, Arvco Capital Research, settled the case, agreeing to pay $10 million in penalties and another $10 million to cover the state’s legal fees.
Bloomberg contributed to this story.