A court-appointed receiver has finalized distributions to victims of a $1.3 billion Ponzi scheme orchestrated by Paul Greenwood and Stephen Walsh, the Commodity Futures Trading Commission (CFTC) announced Friday. The scheme, initially uncovered in 2009, has now resulted in over $1 billion – 100% of approved investor claims – being returned to those defrauded.
The U.S. District Court for the Southern District of New York entered orders on August 24, 2020, allowing the final distribution. Final judgments against Walsh and Greenwood were entered in November 2019. The CFTC originally filed its complaint on February 25, 2009, alleging that Greenwood and Walsh misappropriated at least $553 million from participants in commodity pools connected to their entities, including Westridge Capital Management, Inc., WG Trading Investors, LP, and WGIA, LLC.
Recovered assets contributing to the full restitution included over $88 million clawed back from customers who had already fully redeemed their investments. Other notable assets liquidated included a $14 million horse farm in North Salem, NY, a collection of antique teddy bears sold at auction for over $3.7 million through Christie’s, and a property in Sands Point, NY.
“With all distributions now complete, we have returned more than $1 billion to victims, constituting 100% of all approved claims,” stated James McDonald, Director of the CFTC’s Division of Enforcement. “This case serves as yet another example of the value of working with our law enforcement and regulatory partners to preserve the integrity of our markets and protect customers.”
The Securities and Exchange Commission (SEC) also pursued a civil action in parallel with the CFTC’s investigation. Stephanie Avakian, SEC Enforcement Director, emphasized the agency’s commitment to investor protection and justice for fraud victims. The initial distribution of approximately $792 million largely benefitted institutional investors such as state and county pension funds, private pension funds, and university foundations, with three additional partial distributions preceding this final payment.
Source: CFTC.gov
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