Alfred Villalobos cites "failing health" in his bid to thwart the government's new strategy in its criminal case against him.

CalPERS scandal figure Villalobos opposes delay in civil suits

Published: Wednesday, Aug. 7, 2013 - 12:00 am | Page 1A
Last Modified: Wednesday, Aug. 7, 2013 - 7:39 am

The central figure in the CalPERS bribery scandal says he is in "failing health," nearly died two years ago and needs a quick resolution to the pile of litigation he faces.

The disclosure by Alfred Villalobos is part of an effort by the Nevada businessman to thwart a new legal strategy by government lawyers who have been pursuing him for years over his role in the scandal at the California Public Employees' Retirement System.

In June, federal and state officials asked the courts to put a "stay," or legal hold, on a series of civil lawsuits involving Villalobos.

Their reasoning: The suits could give Villalobos' lawyers access to witness statements and documents they could use to fight the U.S. Justice Department's criminal prosecution of Villalobos and his friend, former CalPERS Chief Executive Fred Buenrostro.

Villalobos, however, wants to keep the lawsuits on track.

Citing his deteriorating medical condition, he has asked the courts to keep the civil cases flowing uninterrupted.

"He wants to clear his name – he's waited several years to do that," one of his lawyers, Sheila Van Duyne Romero, said in an interview Tuesday.

In a lengthy state court filing in late July, the 69-year-old Villalobos said he is "suffering from several incurable degenerative conditions" and walks with two canes.

"My health has seriously declined over the past several years," he wrote in the filing in Los Angeles Superior Court, where he's being sued by state officials. "I had serious heart valve transplant surgery and almost died due to that in 2011.

"I am at constant threat to develop inflammation of the brain and tissues around the heart if I get an infection that is not treated immediately with antibiotics.

"I want to begin clearing my name while I am still alive and still physically able to actively participate in my defense," he wrote.

Villalobos, who earned more than $50 million by helping clients win business from CalPERS, said he has been ruined financially by the allegations against him. He filed for bankruptcy protection in 2010.

Romero added, in her own filing: "I have personally observed a decline in Villalobos' stamina and I have also personally observed that he sometimes loses his concentration due to pain and increasing fatigue."

The attorney declined to discuss Villalobos' health in the interview and said her client was unavailable for comment.

A former CalPERS board member, Villalobos was a marketing agent who helped private-equity firms obtain hundreds of millions of dollars of pension fund investments.

In a lawsuit filed in Los Angeles in 2010, California officials said Villalobos bribed Buenrostro and others at CalPERS to influence investment decisions.

The lawsuit said Villalobos gave Buenrostro a Lake Tahoe condominium, among other things.

That was the first in a series of civil cases that have landed on Villalobos' doorstep. Notably, he filed for bankruptcy protection in 2010, and he and Buenrostro were sued by the Securities and Exchange Commission last year.

The criminal indictment came in March.

A federal grand jury charged Villalobos and Buenrostro with forging documents to make sure Villalobos got paid millions in commissions by his biggest client, New York private equity firm Apollo Global Management.

In order to comply with SEC regulations, Apollo was demanding written proof that CalPERS was aware that Villalobos would earn a fee for helping the New York firm get the pension fund's money.

The two men have consistently denied any wrongdoing and pleaded not guilty to the criminal charges.

The criminal trial is scheduled to begin March 3 in U.S. District Court in San Francisco.

While Villalobos is fighting to push the civil cases forward, his co-defendant Buenrostro hasn't taken a position on the matter, said Buenrostro's lawyer Bill Portanova.

Villalobos has had some success in combating the new legal strategy. A federal magistrate judge in Nevada last month refused the government's request to put a stay on the SEC's lawsuit against Villalobos and Buenrostro.

Federal attorneys have asked the court to reconsider that decision, saying the criminal case "may well be damaged, perhaps severely," if the civil lawsuit goes forward.

No trial date has been set in the SEC case.

Separately, the state's lawsuit from 2010 is scheduled to go to trial Oct. 28 in Los Angeles.

A hearing is set for Thursday on whether the case will be put on hold.

Call The Bee's Dale Kasler, (916) 321-1066. Follow him on Twitter @dakasler.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Dale Kasler



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