Paul Greenwood, the former money manager had pleaded guilty in late July to securities fraud and admitted that he had cheated a whole lot of charities, schools, pension funds and others of over $800 million. He had used these funds to even buy collectible Steiff Teddy Bears and invest in horses. The sentencing has been scheduled for December 1, 2010. Greenwood who is 62 faces up to 85 years in prison and hundreds of millions of dollars in fine.
Greenwood was a hedge fund manager and a general partner of the W G Trading company. He has now pleaded guilty on six charges and is co-operating with the government agencies against co-defendant Steven Walsh who has pleaded not guilty. They were both indicted last July on charges of conspiring to defraud investors of $554 million. As per the charge sheet the scheme which started in 1996 had gone on continuously till there arrest in February 2009.
Their modus operandi was simple and effective. They claimed to have an “index arbitrage fund†and promised the institutional investors a higher rate of return. They took out more than $75 million for personal use like house, horse farm and antiques. Greenwood is supposed to forfeit at least $331 million to the government as part of the plea agreement.
Via: Bloomberg
