Another Billion-Dollar Rip-Off On Wall St.

(AP)  The owners of a company that managed hundreds of millions of dollars for universities and charities were arrested Wednesday on charges of looting their investment funds for over a decade to buy horses, collectibles and other personal items.

Paul Greenwood, 61, and Stephen Walsh, 64, appeared in U.S. District Court in Manhattan on charges of conspiracy, securities fraud and wire fraud. Greenwood is also a horse breeder and elected official in suburban New York.

Bail was set at $7 million each, and they were ordered to post $1 million in cash or property that was not derived from the alleged fraud. Richard D. Weinberg, a lawyer for Walsh, and Robert J. Jossen, a lawyer for Greenwood, declined to comment.

The charges were disclosed on the same day authorities announced an arrest in an unrelated investigation of James Nicholson, president and general partner of Westgate Capital, a New York City investment fund.

Authorities said Nicholson, 42, defrauded investors who had put at least $100 million into his funds since 2004. They said the fraud came to light after several investors sought to redeem their money after hearing about a more than $50 billion fraud blamed on former Nasdaq chairman Bernard Madoff.

The charges were just the latest in a series of high-profile securities fraud scandals to rock Wall Street.

Madoff is under house arrest after authorities said he confessed to his sons in early December that he ran a $50 billion pyramid scheme.

Other cases include that of Florida hedge fund Arthur Nadel, accused of bilking investors of up to $350 million, and Mark Dreier, a prominent lawyer charged with stealing $400 million in a hedge fund scam. Dreier has pleaded not guilty.

Greenwood and Walsh were identified in court papers as the owners of Greenwich, Connecticut-based WG Trading Company LP and of Westridge Capital Management Inc., based in Santa Barbara, California. Their operation also had offices in Manhattan and Jersey City, New Jersey.

The firms' clients included "charitable and university foundations, retirement and pension plans and other institutions," according to the criminal complaint.

Prosecutors allege that since the summer of 2007, $1.3 billion in illegal wire transfers were made to bank accounts held by Greenwood and Walsh's wife.

The complaint also cites an interview with an unidentified WG Trading employee who described being instructed to transfer funds to personal bank accounts.

The employee claimed the money was used for "the purchase of expensive collectible items by Greenwood, the purchase of horses by Greenwood, transfer of cash to Walsh's then-wife and ... the purchase of an apartment for Walsh's ex-wife pursuant to a divorce settlement."

The criminal investigation of Greenwood and Walsh sprang from an audit launched earlier this month by the National Futures Association, a Chicago-based regulatory agency for the U.S. futures industry.

The group suspended the pair after they refused to answer questions about a dubious series of loans between their various entities that involved more $500 million in transfers, NFA spokesman Larry Dyekman said Tuesday.

"They wouldn't cooperate at all so we had to take action," Dyekman said.

Last week, University of Pittsburgh and Carnegie Mellon University sued Westridge, Greenwood and Walsh, seeking the immediate return of more than $114 million they invested.

Greenwood was elected last year as a supervisor in North Salem, New York, where press accounts say he raises horses on a 300-acre farm. He once owned Old Salem Farm, a 54-acre riding school and horse farm bought from Paul Newman and Joanne Woodward.

The FBI made another arrest Wednesday in a third case of securities fraud.

Trader Mark Bloom, who had once worked with Greenwood and Walsh, was charged with securities fraud and was awaiting an appearance in federal court. He was accused of misappropriating millions of dollars, including to purchase a luxury Manhattan apartment.

[armavque]

The question as to whether those accused of fraud are j.e.w.i.s.h. is important, as another reader mentioned. I couldn't agree more that any race can slip into white collar crime, but these individuals went big time, seemingly with little concern for their victims. Why was there not a moral sense in them to trun them back before they did it? Is it because they think so little of the rest of us?

[jetranger7]

Ya- Dongo your right, and the former Corrupt Fraudulent President BUSH/CHENEY should be arrested and held for treason and high crimes,, Just imagine all that money into the Billions sent to IRAQ,, and multi- Millions un-accounted for,, of Tax Payer money, but the Republi-Goon party thinks thats just OK ,, !!!!!!!

[brianbwb-2009]

" Please, some body tell me that these looters are not. J.E.W.I.S.H. PLEASE!!" Posted by johnhoskins

With names like Greenwood (of british origin) and Walsh (Welsh) it can be guessed that they are probably not, even if the lawyers who will rake in the big bucks defending them are.

At any rate Jews are no more likely to loot than any other person with the opportunity and the perception that they will not be caught, so your point has no relevance.

[brianbwb-2009]

"Bail was set at $7 million each, and they were ordered to post $1 million in cash or property that was not derived from the alleged fraud."

Which means they are probably still in the tank, most liokely every penny they ever earned was from fraud, if not this one then likely some yet undiscovered one.

[chicagoguy49]

It seems that there is a new greed based issue at least weekly. The problem is that since these are not "violent" crimes the accused get bail and the cases will not see the inside of a courtroom for years to come. We are so distracted that these headlines fade after only a few days and we move on to the next one. The outcry after the initial revelations about the 50,000 who have parked funds at UBS to evade taxes is now back page news. Personally I hope that we all get to see a list of every name on that list. It will be revealing to see how many CEOs, celebrities, old money rich, politicians, etc appear on the list.

The piggery and greed of the uber rich amazes me...

[lambor59]

Water boarding these thugs, make them return people's money right away.

[sand_pie]

Corruption exists in every political system. If you think it's only the communsts, you're in dream land.

[cliffps]

They all seem to get caught in the end and what fun to watch it unfold!

[tonkabase]

Can't SOMEONE stop these wallstreet high investers and CEO's from making OFF with poeples' monies? They SHOULD be prosecuted and their wives too. We wouldn't be able to get away with that kind of diverting investor funds into our own accounts. Where are the safeguards? Where are the whistle-blowers? Don't the workers realize these are their funds too??Someone has to speak up! What are we sending people to Washington for -if not to watch out for US and protect US? What ARE THEY DOING down in WASHINGTON? WHY aren't they doing what they were elected to do?? It's time someone DID something!

[renonv5]

This is still just the tip of the iceberg, these crooks have been running rampant for many years now while the WH looks the other way. Stay tuned for more multi million dollar rip-offs.