Feds: Swindlers Blew $500M on Horses, Houses, Teddies

Another day, another fraud casee
By Rob Quinn,  Newser Staff
Posted Feb 26, 2009 4:52 AM CST
Paul Greenwood exits Manhattan Federal court after being released on bail yesterday.   (AP Photo/ Louis Lanzano)
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(Newser) – A pair of money managers who once co-owned the New York Islanders hockey team have been charged by federal prosecutors with treating $550 million in client investments like their own "personal piggy bank," reports Reuters. Paul Greenwood, 61, and Stephen Walsh, 64, managing general partners of WG Trading Co. in Connecticut, spent a decade blowing up to $550 million of clients' funds on lavish lifestyles, racehorses, mansions and expensive mohair teddy bears, according to federal authorities.

The pair oversaw investments for top institutions like Carnegie Mellon University. A Manhattan judge yesterday set bail at $7 million, and gave the freed men two weeks to come up with it. The SEC has frozen their assets. The men had no comment on the case.