The California Public Employees’ Retirement System is suing a former employee who is accused of stealing more than $685,000 from the dormant pension accounts of 10 retirees, court filings show.
The victims include a homeless retiree, CalPERS said in a court filing, as well as several who are under conservatorship, meaning a judge has appointed someone to oversee their financials due to mental or physical disability.
The $460 billion pension fund filed the suit in the California Superior Court in Sacramento on Friday, the court documents show. It is suing Gloria Najera, a 25-year veteran of CalPERS and former associate governmental program analyst, “to recover the stolen funds,” CalPERS said in the complaint.
CalPERS said Najera stole more than $685,600 from 10 retiree accounts that were dormant, meaning payments have been returned as undeliverable. “CalPERS repeatedly attempts to locate these members and beneficiaries,” the retirement system said in the court filing.
The alleged fraud, which CalPERS said it discovered during an investigation that began in January, occurred between July 2017 and January 2021. CalPERS said Najera is no longer employed there and that the system is performing a “forensic audit.”
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CalPERS said it will “make all breached member accounts whole” and has notified everyone affected by the alleged fraud. CalPERS has since implemented a new policy, which requires three levels of security, CEO Marcie Frost said Monday in an email to members that was obtained by Institutional Investor.
“That this could have happened in the first place is unacceptable, and the employee is no longer employed by CalPERS,” Frost said in the email. “The employee’s actions were an abuse of access, breach of fiduciary responsibility, and betrayal of co-workers and all dedicated public employees. We are extremely disappointed, because we take our commitment to member security so seriously.”
CalPERS alleged in the court filing that Najera used the stolen funds to pay off her own credit card debts as well as the debt of her husband, daughter, and another family member. The alleged victims include one person who CalPERS believes is homeless as well as three who are under conservatorship. Four others are under power of attorney, CalPERS said, including one who lives in a care facility.
“CalPERS will exhaust every legal opportunity to recover the money stolen from the victims,” Frost told members in the email.