LACERA Files Lawsuit Against Former Interim Information Security Officer For Fraud, Conflicts of Interest, and Breach of Fiduciary Duty

Complaint Alleges Carmelo Marquez defrauded LACERA by using an elaborate bid rigging scheme, an alias, and a straw company to enrich himself

/EIN News/ -- LOS ANGELES, May 19, 2025 (GLOBE NEWSWIRE) -- The Los Angeles County Employees Retirement Association (LACERA) has filed a lawsuit in Los Angeles County Superior Court against Carmelo Marquez, former Interim Information Security Officer (ISO), and SafeSec LLC (SafeSec), a company he secretly founded and operated using an alias. The complaint alleges fraud, conflicts of interest in violation of Government Code section 1090 and the Political Reform Act, and breach of fiduciary duty.

According to the lawsuit, Marquez orchestrated an elaborate bid-rigging scheme while working at LACERA, enriching himself by over $120,000 through improper contracts awarded to SafeSec. He allegedly used an alias—“Carlos Rodriguez”—and created a straw company, SafeSec, to hide his identity and relationship to the vendor.

“LACERA will not tolerate this egregious, unlawful violation of duty against LACERA and its members by those who are entrusted to work for the retirement system and its members,” said Luis Lugo, Deputy Chief Executive Officer of LACERA. “LACERA is determined to safeguard the interests of its members and vigorously pursue all necessary actions to remedy breaches of trust. This legal action, which was authorized by LACERA’s Board of Retirement, reflects our unwavering commitment to accountability, transparency, and the protection of our members’ retirement assets.”

Ashley K. Dunning, a Partner at Nossaman LLP and lead outside counsel for LACERA in the litigation, added: “The case underscores LACERA’s dedication to ethical governance. It is imperative that LACERA employees, executives and contractors maintain the highest standards of ethics and integrity to protect the interests of LACERA members. LACERA is pursuing every remedy available under the law to protect its members.”

Summary of Allegations

Mr. Marquez was hired by LACERA in 2021 as an independent contractor and was promoted to Interim ISO in LACERA’s information security office in February 2023. In that capacity, he managed cybersecurity procurement and vendor relations and had the authority to recommend suppliers and negotiate contracts on LACERA’s behalf.

While still working at LACERA, Marquez secretly established SafeSec, a Wyoming-based limited liability company in which he was the sole member and owner. In communication with another cybersecurity firm, he falsely claimed he was “asking for a close friend who recently started a Cyber Security consulting company,” concealing his own connection to SafeSec. By October 2022, SafeSec had become an approved vendor and Value-Added Reseller (VAR) for cybersecurity products that Marquez encouraged LACERA to procure.

Marquez then exploited his role to steer contracts toward SafeSec, manipulated the required bid procurement process, including by obtaining sham quotes from other vendors to ensure that SafeSec appeared as the lowest bidder. To conceal his conflict of interest, he used the alias “Carlos Rodriguez” in all communications between SafeSec and LACERA personnel.

After leaving LACERA in May 2023, Marquez continued to use that alias and unsuccessfully attempted to secure contract extensions with LACERA under false pretenses.

Under Government Code § 87100, LACERA is seeking treble damages totaling more than $360,000, representing three times the amount Marquez unlawfully gained through his scheme.

To read a copy of the Complaint, click here.

About LACERA
The Los Angeles County Employees Retirement Association (LACERA) administers and manages the retirement funds of more than 200,000 current and former employees of Los Angeles County, ensuring that the financial futures promised to them by the County are secure through diligent and transparent management practices.

Media contact: Eric Rose Eric@ekapr.com