By Dale Kasler
Published: Thursday, May. 27, 2010 – 12:00 am | Page 6B

Alfred Villalobos, the former CalPERS board member accused of bribing pension fund officials, has squandered $68 million of his fortune and owes more money to one casino than he has in cash, the state said Wednesday.

In a court filing, the state revealed fresh allegations about Villalobos’ spending habits in an effort to maintain a court-ordered freeze on his assets. It is suing Villalobos for $70 million, saying he lavished gifts on three CalPERS officials to influence investment decisions.

If the freeze is lifted, as Villalobos has demanded, the state said he could waste his money on gambling or transfer it overseas before the state can pursue its lawsuit.

The state also is suing Fred Buenrostro, the former chief executive of the California Public Employees’ Retirement System. The suit says Buenrostro and two other fund officials – former board member Charles Valdes and investment official Leon Shahinian – accepted plane rides, champagne and other gifts from Villalobos.

The state says Villalobos gave Buenrostro a job and a Lake Tahoe condominium to curry favor on behalf of his Wall Street clients. In its latest court filing, the state disputed Villalobos’ contention that Buenrostro paid $600,000 for the condo.

Neither Valdes nor Shahinian is a defendant in the case; Shahinian has been placed on leave by CalPERS.

Daniel Ruzumna, a lawyer for Villalobos, had no comment. A hearing on his assets is set for Friday in Los Angeles Superior Court.

Villalobos has earned at least $50 million representing private equity firms seeking investments from CalPERS.

In its latest court filing, the state cited his “dissipation of over $68 million in cash assets” as reason to keep the freeze in place.

Villalobos acknowledges he gambles; the state says he pursues the activity to excess. His debt to Reno’s Eldorado Hotel Casino “exceeds his cash assets,” the state said.

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