Paul Greenwood (money manager)

Last updated

Paul Greenwood (born 1947) is a former American money manager and town supervisor who was convicted of securities fraud with business partner Stephen Walsh. [1]

Contents

Business career

Greenwood and Walsh established their first company in 1979 [2] and became partners and executives at the Greenwich, Connecticut-based WG Trading Company. [3] From 1992 to 1996, Greenwood and Walsh had a controlling stake in the New York Islanders franchise of the National Hockey League. [4]

Prior to his arrest, Greenwood was the town supervisor of North Salem, New York and a treasurer at the local Episcopal Church. [5] He resigned as town supervisor shortly after his arrest. [2] He had a reputation for generosity in the community. [2]

Securities fraud case

Greenwood and Walsh were arrested on February 24, 2009, and charged with scheming to defraud investors of $554 million. [6] The scheme, which lasted from 1996 to 2009, defrauded investors, [3] including the University of Pittsburgh, Carnegie Mellon University, Wells Fargo Bank, the Sacramento County Employees Retirement System, and the Kern County Employees Retirement Fund. [7] The scheme involved unauthorized investments and the reporting of "arbitrary return rates" to investors that failed to account for losses. [2] The scheme collapsed following the global financial crisis and a National Futures Association audit that revealed promissory notes used by Greenwood and Walsh to account for losses and withdrawals. [2]

On July 28, 2010, Greenwood pleaded guilty to six counts of securities fraud. [6] [2] On December 3, 2014 he was sentenced to a decade in federal prison by Manhattan U.S. District Judge Miriam Goldman Cedarbaum, who told him "many people today lost many thousands of dollars as a result of your fraud." [2]

The sentence was later overturned by the U.S. Court of Appeals for the Second Circuit, which found that Judge Cedarbaum erred in basing the sentence in part on the finding that some victims suffered severe financial harmed, and returned the case to the district court for re-sentencing. [4] At the re-sentencing hearing, Judge Loretta A. Preska, who took over the case after Cedarbaum's death, [3] reduced Greenwood's sentence by five years, citing his long history of charity and significant cooperation with a court-appointed receiver and federal prosecutors (who secured a guilty plea and prison sentence against Walsh); Preska also considered the fact that 98% or 99% of investors had recovered their money. [4] [8] Greenwood expressed remorse for the crime. [3] Greenwood was imprisoned at the federal prison in Butner, North Carolina, [3] and released in July 2019. [9]

Related Research Articles

<span class="mw-page-title-main">Federal Correctional Complex, Butner</span> Federal prison in Butner, North Carolina, US

The Federal Correctional Complex, Butner is a United States federal prison complex for men near Butner, North Carolina. It is operated by the Federal Bureau of Prisons, a division of the United States Department of Justice. FCC Butner is about 25 miles (40 km) northwest of Raleigh, the state capital. It includes the Bureau's largest medical complex, which operates a drug treatment program and specializes in oncology and behavioral science. Among its inmates was Bernie Madoff, who was convicted for perpetrating the largest Ponzi scheme in history. He died at the prison in April 2021.

<span class="mw-page-title-main">Loretta Preska</span> American judge (born 1949)

Loretta A. Preska is an American lawyer who serves as a senior United States district judge of the United States District Court for the Southern District of New York. Born in Albany, Preska received law degrees from Fordham University School of Law and New York University School of Law. She practiced law in New York City from 1973 to 1992 at the law firms of Cahill Gordon & Reindel and Hertzog, Calamari & Gleason. President George H. W. Bush appointed her to the district bench in 1992. She served as chief judge of the court for a seven-year term from 2009 to 2016, and took senior status in 2017. President George W. Bush nominated Preska to the U.S. Court of Appeals for the Second Circuit in 2008, but the Senate did not act on the nomination.

<span class="mw-page-title-main">Samuel Israel III</span> American fraudster and hedge fund manager

Samuel Israel III is an American fraudster and former hedge fund manager for the Bayou Hedge Fund Group, which he founded in 1996. In 2008, Israel was sentenced to 20 years in prison and ordered to forfeit $300 million for defrauding his investors.

<span class="mw-page-title-main">Bernie Madoff</span> American fraudster and financier (1938–2021)

Bernard Lawrence Madoff was an American financial criminal and financier who was the admitted mastermind of the largest known Ponzi scheme in history, worth an estimated $65 billion. He was at one time chairman of the Nasdaq stock exchange. Madoff's firm had two basic units: a stock brokerage and an asset management business; the Ponzi scheme was centered in the asset management business.

Nicholas Cosmo is an American former businessman and white-collar criminal. He was arrested January 26, 2009 on charges of an estimated $370–413 million Ponzi scheme. Cosmo conducted the scheme using his company Agape World Inc. in Hauppauge, New York, which claimed to make its profits via commercial bridge lending. Authorities arrested him in Hicksville, New York.

<span class="mw-page-title-main">Raj Rajaratnam</span> American investments manager

Rajakumaran Rajaratnam is a Sri Lankan-American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm. He is also the author of his memoir, Uneven Justice: The Plot to Sink Galleon.

<span class="mw-page-title-main">Galleon Group</span>

The Galleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009. The firm was the center of a 2009 insider trading scandal which subsequently led to its fall.

James Michael Nicholson is an American fraudster and was the head of the investment firm Westgate Capital Management. The headquarters of Westgate Capital was located in Pearl River, New York. Nicholson was arrested on February 25, 2009, by the FBI and charged by the SEC for allegedly "defraud[ing] hundreds of investors of millions of dollars". Nicholson was indicted by the US Attorney for the Southern District of New York, on April 23, 2009, and was sentenced to 40 years in prison after pleading guilty to defrauding investors in the Ponzi scheme. Nicholson is serving his sentence at the Federal Correctional Institution (FCI) Otisville, a medium security facility for male offenders located on the outskirts of Otisville, New York. His projected release date is April 7, 2043, when he will be 76 years old.

Stephen Walsh is an American former money manager who pleaded guilty to securities fraud.

<span class="mw-page-title-main">Participants in the Madoff investment scandal</span>

Participants in the Madoff investment scandal included employees of Bernard Madoff's investment firm with specific knowledge of the Ponzi scheme, a three-person accounting firm that assembled his reports, and a network of feeder funds that invested their clients' money with Madoff while collecting significant fees. Madoff avoided most direct financial scrutiny by accepting investments only through these feeder funds, while obtaining false auditing statements for his firm. The liquidation trustee of Madoff's firm has implicated managers of the feeder funds for ignoring signs of Madoff's deception.

International Investment Group (IIG) is an American financial institution that specializes in short-term trade finance and commercial finance with a focus on emerging markets. Through its affiliate IIG Capital it provides financing to small and medium-sized merchants, traders and processors with a need for supply chain financing.

Timothy Shawn Durham Sr. is an American former lawyer and businessman convicted in 2012 of the largest corporate fraud ever investigated by the Federal Bureau of Investigation in Indiana. His investment firm Obsidian Enterprises invested in a number of companies, including wireless device company BrightPoint and comedy brand National Lampoon, Inc., where Durham was CEO. In 2012, Durham was sentenced to 50 years in prison in connection with a Ponzi scheme that defrauded 5,400 investors, many of them elderly, of approximately $216 million, according to the U.S. Securities and Exchange Commission.

<span class="mw-page-title-main">S.A.C. Capital Advisors</span> Group of hedge funds

SAC Capital Advisors was a group of hedge funds founded by Steven A. Cohen in 1992. The firm employed approximately 800 people in 2010 across its offices located in Stamford, Connecticut and New York City, and various offices. It reportedly lost many of its traders in the wake of various investigations by the Securities and Exchange Commission (SEC). In 2010, the SEC opened an insider trading investigation of SAC and in 2013 several former employees were indicted by the U.S. Department of Justice. In November 2013, the firm itself pleaded guilty to insider trading charges and paid $1.2 billion in penalties. The firm shrank after returning the vast majority of its outside investor capital. Point72 Asset Management was established as a separate family office in 2014. SAC ceased to exist as a separate entity in 2016. Point 72, essentially the continuation of SAC, manages 30 Billion as of 2023.

Brian Kim is an American former hedge fund manager. He founded the now-defunct Liquid Capital Management LLC, which focused on futures trading.

Mark (Meir) Nordlicht is the founder and former chief investment officer of Platinum Partners, a U.S. based hedge fund, which came to be known for its unusual investment strategies becoming the subject of a series of controversial criminal and legal actions. According to an indictment, Nordlicht, in addition to the fund's co-CIO and CFO, were accused of running a "ponzi like scheme". A jury acquitted all defendants on the core charges relating to the Ponzi scheme operation, but found two of the lead executives guilty on the lesser charges relating to a bond-rigging scheme. In an unusual move, Judge Brian Cogan, presiding in the case of United States vs. Nordlicht, et al., reversed the jurors' guilty verdicts and acquitted the firm's co-CIO of the lesser charges in a full acquittal, but ordered a new trial to be set for Nordlicht. An appellate court later upheld the convictions.

<i>United States v. Elizabeth A. Holmes, et al.</i> Criminal fraud case

United States v. Elizabeth A. Holmes, et al., was a United States federal criminal fraud case against the founder of now-defunct corporation Theranos, Elizabeth Holmes, and its former president and COO, Ramesh Balwani. The case alleged that Holmes and Balwani perpetrated multi-million dollar wire-fraud schemes against investors and patients. Holmes and Balwani each had their own jury trial.

Inigo August Philbrick is an American former art dealer and convicted fraud. According to the FBI, Philbrick committed the largest art fraud in American history. He was convicted of wire fraud in May 2022 and was sentenced to seven years in prison and was ordered to forfeit $86.7 million. He was released from Federal Correctional Complex, Allenwood in early 2024, having served four years of his sentence.

References

  1. ↑ Lieberman, Steve (29 June 2016). "Former North Salem Supervisor Paul Greenwood sees prison term slashed". The Journal News .
  2. 1 2 3 4 5 6 7 Elizabeth Ganga, Paul Greenwood sentenced to 10 years for massive fraud, The Journal News (December 3, 2014).
  3. 1 2 3 4 5 Nate Raymond, Ex-NY Islanders co-owner gets prison term for fraud halved, Reuters (June 29, 2016).
  4. 1 2 3 Larry Neumister, Judge gives ex-Islanders co-owner a 5-year prison reduction, Associated Press (June 29, 2016).
  5. ↑ Dienst, Jonathan (16 July 2009). "Wall Street Fraud Schemes Lead to 4 Arrests". News 4 New York . Retrieved 22 March 2018.
  6. 1 2 Patricia Hurtado, Fund Manager Paul Greenwood Pleads Guilty to Fraud, Bloomberg News (July 28, 2010).
  7. ↑ Zachery Kouwe, "Two Money Managers Held in New Wall Street Fraud", New York Times (February 25, 2009). Note: Zachery Kouwe resigned from the Times over plagiarism accusations in Feb. 2010. 2010-02-27.
  8. ↑ Riley, John (29 June 2016). "Ex-Islanders co-owner Paul Greenwood's sentence reduced". Newsday . Retrieved 22 March 2018.
  9. ↑ Paul Greenwood, Register Number: 61989-054, Federal Bureau of Prisons.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.