CalPERS employee took $685,000 from 10 retirees to pay her family’s debts, lawsuit says

A former CalPERS employee stole about $685,000 from 10 retirees who weren’t able to manage their own retirement accounts, according to a civil lawsuit the retirement system filed Friday.

CalPERS accused Gloria Najera, 45, an employee of 25 years, of defrauding retirees whose accounts had gone to dormant status, meaning the pensioner was unreachable and not receiving money.

Most of the victims’ accounts were under conservatorship or power of attorney. One of them was homeless, according to the complaint filed in Sacramento County Superior Court.

Najera, an associate governmental program analyst who worked in the warrant administration unit of CalPERS’ Retirement Benefit Services Division, fraudulently accessed the victims’ accounts and made payments toward her own debts and those of her family members, according to the lawsuit.

Efforts to reach Najera were not immediately successful.

The retirement system estimates Najera was diverting money from the accounts from July 2017 until January 2021, when CalPERS identified fraud in the account of someone identified in the lawsuit as “Victim No. 1”

Victim No. 1 lives outside the U.S. and is under conservatorship, according to the lawsuit.

Najera allegedly accessed the victim’s date of birth, address and the last four digits of their social security through CalPERS’ online member tool, myCalPERS. She identified their financial institution and banking information, and contacted the bank through a chat program and by phone from her desk at work, according to the lawsuit.

She was supposed to process a change to the victim’s direct deposit, but didn’t, so the money kept going to the dormant account, CalPERS alleges in the lawsuit. She withdrew about $69,000 from the account, using it to pay her debts and those of her husband, her daughter and another family member, according to the lawsuit.

Three of the 10 victims were under conservatorship, four were under power of attorney, one was homeless and one had an account that was on hold for possible fraud. In the case of the 10th victim, Najera allegedly moved money from a dormant account into an account to which she had access.

The 10 accounts were the only accounts affected among about 9,400 dormant CalPERS accounts, according to the lawsuit. The fund, with investments valued at about $458 billion as of Thursday, pays pensions to about 730,000 retirees.

All the account holders have been notified and CalPERS has taken steps to protect all accounts Najera had access to, according to the suit. The lawsuit says Najera is no longer employed by CalPERS.

CalPERS Chief Financial Officer Michael Cohen told the system’s board Monday morning that the incident was “unfortunate,” and said the pension fund is working with law enforcement on potential prosecution.

The retirement system is also performing a forensic audit, according to a Monday news release. The fund is working on recovering the money and will restore the affected accounts, according to the release.

This story was originally published April 19, 2021 at 11:56 AM with the headline "CalPERS employee took $685,000 from 10 retirees to pay her family’s debts, lawsuit says."