Lately, we seem to be seeing a strange intersection between show business, particularly old-time show business, and securities fraud. In this space last week, I described how a recent drug bust involving a longshoreman-turned-informant—shades of On the Waterfront—allegedly involved a pump-and-dump stock scheme. The latest tidings in that area involve a pump-and-dump scheme with an intriguing twist: pension-fund corruption.

Today’s adventure takes us to the 1970s and a popular cop show called CHiPs, which centered on the exploits of the California Highway Patrol. The show starred Erik Estrada, and one of the lead players was what People described at the time as a “boyish blond” patrolman played by an actor named Larry Wilcox. His acting career fizzled out about 10 years ago. He dropped out of the public eye, and he has now emerged with a new career—stock fraud.

The case, unveiled in civil and criminal charges including a Securities and Exchange Commission complaint, contends that Wilcox was involved in a penny-stock pump-and-dump case, with a feature not ordinarily seen in microcap fraud cases. Wilcox bribed a “pension fund trustee,” who turned out to be an FBI agent, to induce him to buy shares of his company.

That’s a twist on typical pension fund “pay for pay” schemes that have been in the news lately, such as the one that snared former New York State comptroller Alan Hevesi. In that and similar cases, public pension-fund trustees took bribes to direct pension-fund business to money managers. In the scheme involving the former CHiPs star, the bribery was for a different purpose. According to court papers, including Wilcox’s guilty-plea agreement in a criminal case, the bribes were paid to induce the fund manager to buy the stock in the company in which Wilcox was involved.

Wilcox was CEO of a company called UC Hub Group, a publicly traded Nevada mining company. In January and February 2009, according to court papers, Wilcox and others made “undisclosed kickback payments” to induce a pension-fund manager to buy 1.6 million shares of restricted stock at inflated prices. The pension-fund employee was supposed to receive 40 percent of the total price of the shares—a mighty hefty kickback. The problem with this kickback is that it was undisclosed. Kickbacks themselves, you see, don’t necessary fall afoul of federal laws, but not disclosing them to one’s shareholders is securities fraud. Calls to UC Hub and Wilcox were not immediately returned.

A more pragmatic problem for Wilcox and the other defendants—nine others were charged, involving bribes to buy other companies’ shares—was that the pension-fund employee with whom they were dealing was actually an undercover FBI agent, according to the SEC complaint. The FBI role in the case probably explains why it was wrapped up so quickly—just over a year, which is lightning-like by stock-fraud standards. Criminal cases ordinarily are concluded much faster than ordinary SEC civil cases.

There’s an interesting parallel with the “on the waterfront” case that I discussed last week. One is the presence of a prominent informant—Wilcox. According to Wilcox’s plea agreement, he decided to furnish the Feds with information on the conspiracy.

Use of informants in stock-fraud cases is nothing new. What makes this case interesting, from a stock-fraud (as opposed to show-biz) standpoint, is that it demonstrates how the techniques of stock fraud have evolved since the big wave of penny-stock boiler rooms in the 1980s and 1990s,

What is new—and potentially quite devastating—is the possibility that what we have here is a new form of corruption of the pension-fund industry. Traditional pay-for-play has been around for decades, and includes such recent examples as the recent scandal involving financier and former Obama administration car czar Steve Rattner, who is settling charges that he traded kickbacks and favors for New York State pension-fund business. The list of financiers caught up in pay-for-play messes is growing longer by the day. The problem has grown so serious that the SEC in June adopted rules aimed at curbing pay-to-pay practices.

But those rules are aimed at traditional pay-for-play, and not at the kind of corruption on exhibit in the Wilcox case. Schemes to bribe pension-fund managers to buy stocks are pretty much unheard of. Does this represent a new breed of dirty money in the already scandal-plagued pension-fund business? Only the trend of future prosecutions, if any, will give the answer to that.

Payoffs were frequently used in those days to induce young brokers to sell the shares. Ordinary commissions just didn’t offer enough incentive to push worthless shares on the public. The extra, undisclosed payments to the brokers were passed on to customers by inflating the price of the shares. The amount the share price was inflated was known as the “chop” or “rip.” That is Wall Street underworld shorthand for an illegal kickback, similar to the payoffs allegedly involved in this case. Those “chops” were substantial, sometimes as much as the 40 percent number mentioned in Wilcox’s plea agreement. However, I can’t recall a single instance in which a professional money manager was bribed to buy the shares.

Back in the day, before the FBI cracked down on such things, under-the-table payments were so common that they had a nickname—“cash deals.” There have been few prosecutions of “cash deals” in recent years, but this latest case indicates that they may be coming back. In addition to the pension-fund bribery detailed in court papers, the SEC says that one defendant bribed a broker to sell the shares—just as in the bad old days. But unlike the bad old days, the broker was an FBI agent.

The federal authorities seem to be ratcheting up their prosecutions of microcap fraud, which is all for the good. The FBI’s white-collar crime force has been depleted in recent years by the demands of counterterrorism, so cases like this definitely have impact. We’ll know the FBI has managed to curb this latest twist on stock-market bribery if the Street has no nickname for paying off a pension-fund manager—except, perhaps, “stupid.”