Business & Real Estate

Investment firm to pay $2.3 million to estate of CalPERS bribery figure

Alfred Villalobos speaks at the dedication of A.J. Villalobos Hall on campus of his alma mater Whittier College in 2008.
Alfred Villalobos speaks at the dedication of A.J. Villalobos Hall on campus of his alma mater Whittier College in 2008. Whittier College

Almost a year after CalPERS bribery figure Alfred Villalobos killed himself, one of his clients has agreed to pay his bankruptcy estate $2.3 million for the work he did securing investment dollars from the big California pension fund.

Aurora Capital Group, a Los Angeles private equity firm led by former University of California Board of Regents Chairman Gerald Parsky, made the tentative settlement with Villalobos’ bankruptcy trustee after initially balking at paying the funds.

Aurora was one of several private equity firms that hired Villalobos, a onetime CalPERS board member, to help secure investment dollars from CalPERS and other public pension funds.

Villalobos earned roughly $50 million in commissions after securing billions of dollars in investment commitments from the California Public Employees’ Retirement System. Court records show Aurora got investment commitments from CalPERS totaling more than $400 million and agreed to pay Villalobos millions for his work.

After allegations surfaced in 2010 that Villalobos bribed top CalPERS officials, Aurora stopped paying Villalobos, arguing that his misdeeds constituted a breach of contract. The bankruptcy trustee sued Aurora in 2013, claiming the Villalobos estate was owed $5.3 million including interest.

The two sides have agreed on a $2.3 million settlement, according to court papers filed by trustee Christina Lovato and her lawyer Alan Smith. The settlement agreement was filed in U.S. Bankruptcy Court in Reno this week. A bankruptcy judge will be asked to approve the settlement at a hearing in Reno next month.

The money would go to pay Villalobos’ various creditors. He and his companies are still being sued by the state of California and the U.S. Securities and Exchange Commission.

Officials with Aurora couldn’t immediately be reached for comment.

CalPERS no longer does business with Aurora, said pension fund spokesman Joe DeAnda.

The trustee has filed a similar lawsuit against Apollo Global Management, a New York private equity powerhouse that was Villalobos’ most important client. That case remains pending.

Villalobos filed for bankruptcy in 2010, shortly after he was sued by the state of California. He shot himself to death in January at a Reno gun range several weeks before he was scheduled to go on trial for allegedly bribing former CalPERS Chief Executive Fred Buenrostro. Buenrostro has pleaded guilty to accepting bribes and is due to be sentenced next month in U.S. District Court in San Francisco.

Dale Kasler: 916-321-1066, @dakasler

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