A $1.3 billion Ponzi scheme orchestrated by Paul Greenwood and Stephen Walsh has reached its conclusion after 13 years of litigation, the Commodity Futures Trading Commission (CFTC) announced Monday. The U.S. District Court for the Southern District of New York approved the final report of the receiver, Robb Evans & Associates LLC, and discharged them from the case, with remaining funds deposited with the court.
The CFTC initially filed suit in 2009, alleging Greenwood and Walsh misappropriated at least $553 million from investors through entities including Westridge Capital Management, Inc., WG Trading Investors, LP, and WGIA, LLC. Remarkably, the receivership recovered over $1 billion – 100% of all approved investor claims – and distributed it to victims, primarily institutional investors like pension and university funds.
Assets seized during the receivership included over $88 million recovered from investors who had already received payouts, a $14 million horse farm in North Salem, New York, a valuable collection of antique teddy bears auctioned by Christie’s for over $3.7 million, and a luxurious estate in Sands Point, New York.
“As this long-standing litigation demonstrates, where customers are egregiously harmed by greedy fraudsters who misappropriate funds entrusted to them, the CFTC is resolute in its commitment to protecting customers and achieving justice,” said Acting Director of Enforcement Gretchen Lowe. Lowe praised the collaborative effort between the CFTC, the receiver, and other enforcement partners.
The case also involved parallel actions by the Securities and Exchange Commission (SEC). Greenwood and Walsh both pleaded guilty to criminal charges in a related case, agreeing to consent forfeiture judgments of approximately $85 million and $50 million respectively. They served approximately five and four years in federal prison, respectively.
A court-approved distribution plan facilitated the return of funds to investors through multiple phases, ultimately ensuring full restitution of approved claims. The CFTC’s successful conclusion of this case highlights its commitment to pursuing and recovering funds lost to fraudulent schemes.
Source: CFTC.gov
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