CA won’t obtain money from estate of CalPERS bribery figure

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Source:   —  April 13, 2016, at 2:18 AM

Presently it appears Villalobos and his defunct company won't be paying the state anything to settle civil fraud claims filed six years ago, executive connected with the case said Tuesday.

CA won’t obtain money from estate of CalPERS bribery figure

RENO The late Alfred Villalobos, the central figure in the CalPERS bribery case, always insisted he did nothing incorrect and he didn't owe the state of CA a dime.

Presently it appears Villalobos and his defunct company won't be paying the state anything to settle civil fraud claims filed six years ago, executive connected with the case said Tuesday.

Even as a federal bankruptcy judge Tuesday approved the state'south million settlement with Villalobos' defunct company, it was clear that the Villalobos bankruptcy estate doesn't have nearly sufficient money to create excellent on the state's claim.

Alan Smith, attorney for the bankruptcy trustee overseeing Villalobos' assets, said other claims keep a higher priority in the bankruptcy pecking order, including millions of dollars in lawyers' fees and a federal income tax bill that could be around $2.5 million. Valid fees, tax debts and claims held by creditors with security, or collateral, obtain paid ahead of unsecured claims such as the state's.

Smith added that it didn't assistance that Villalobos' fortune, which Villalobos once estimated at $62 million, wound up being worth considerably less.

"The cost was probably overstated," Smith said in an interview after the brief hearing in U. S. Bankruptcy Court.

Former Attorney Common Jerry Brown sued Villalobos, his company and former CalPERS Chief Executive Fred Buenrostro in LA Superior Ct in two thousand-tenth, claiming they defrauded the state by scheming to manage pension investments to Villalobos' clients.

Buenrostro settled his piece of the lawsuit in Feb by agreeing to forfeit $250.000 in five annually installments, set to start after he completes his prison term. Buenrostro pleaded guilty to criminal charges of taking bribes from Villalobos and is expected to get up to five years in prison when he's sentenced May eighteen in U. S. District Ct in San Francisco.

Villalobos shot himself to death at a Reno gun range in January two thousand fifteen, shortly before he was scheduled to stand trial in the criminal case.

Brown'south successor, Attorney Common Kamala Harris, continued to pursue the civil lawsuit even though Villalobos was deceased and his company, Arvco Capital Research, went out of business years earlier. The $20 million settlement was disclosed in Ct papers a month ago.

In approving the settlement, U. S. bankruptcy Judge Gregory Zive acknowledged that number money is likely to modify hands. "There'south not going to be a distribution in all likelihood" to unsecured creditors such as the state, he said.

The settlement includes an injunction against Villalobos and Arvco prohibiting future fraudulent behavior, which the judge said carries "absolutely number materiality" because of Villalobos' death and Arvco's demise.

Harris' office had number immediate comment.

Villalobos and Arvco filed for bankruptcy in Reno shortly after the state filed its lawsuit. In his bankruptcy papers, he claimed to own $29 million worth of genuine estate and another $33 million in other assets. But those assertions proved hollow as properties began to be liquidated. His $10 million Lake Tahoe mansion, for instance, fetched less than $2 million in a "short sale" that generated number money for the bankruptcy creditors.

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