Just how many more multimillionaire thieves are working Americans — and, increasingly, out-of-work Americans — in the mood to hear about these days? Given the state of the economy and the shattering of millions of nest eggs, not many.
In such a climate, then, the Wednesday report on two New York money managers named Paul Greenwood and Stephen Walsh must have truly warmed the heart of every American wondering how he or she is going to pay this month’s bills.Walsh and Greenwood, proprietors of a firm known as WG trading investors, have been accused by the Justice Department and the Securities and Exchange Commission of misappropriating more than half a billion dollars of their investors’ money and spent it on things like horse farms, luxury cars, mansions and expensive collectibles.
OK, so by Bernie Madoff standards, a mere $554 million is chump change. It’s the principle of the thing. (And, when you’re talking about that kind of money, the interest.)
Since 1996, federal charges allege, Greenwood and Walsh used WG as a “personal piggy bank” through which they had most of their investors’ money sent to themselves or their wives. SEC attorney David Rosenfeld said the case “appears to be one of the largest cases of alleged looting or misappropriation from a U.S. hedge fund.” The SEC is suing the men for civil fraud, which could be the least of their worries: They also face federal charges of conspiracy, securities fraud and wire fraud.
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For a dozen years, investigators say, Walsh and Greenwood have, at investors’ expense, indulged in “lavish and luxurious lifestyles which include the purchase of multimillion dollars homes, a horse farm, cars, horses and rare collectibles such as Steiff teddy bears.”
And who paid for such ostentatious opulence? Well, some of the money belonged to the public retirement systems of Sacramento County, Calif., and the state of Iowa, which between them accounted for almost $400 in investments. Carnegie Mellon University claims losses of $49 million, the University of Pittsburgh $65 million.
Don’t you just love the idea of a bunch of old people’s retirement money being looted for one more set (or two, or three) of shiny new wheels?
This is another one of those cases — and they’re becoming increasingly and infuriatingly familiar — in which the impact of an alleged crime, in terms of both money and people, goes so far beyond what the average property-crime inmate has accounted for that trying to tally up an appropriate sentence shorts out the calculator.
But that’s premature. These guys are entitled to the presumption of innocence and due process of law. If the feds fail to prove a case against them, then all of us, but especially the WG investors, will be waiting for some explanations of exactly where that much money could have gone, and where Greenwood’s and Walsh’s fortunes came from.
And if they’re convicted, they should be thrown under the jail.