- Greenwood admitted swindling investors out of $554 million
- Spent $75 million to collect museum-grade teddy bears
A 10-year sentence given to WG Trading Co.’s Paul Greenwood for swindling hedge fund clients of $554 million will have to be reconsidered after a federal appeals court said a lower-court judge who imposed the term didn’t properly account for the economic harm victims suffered by his Ponzi scheme.
Greenwood, 68, the general partner of WG Trading, admitted at his sentencing in 2010 that he and his former partner, Steven Walsh, “sort of” ran a Ponzi scheme over 13 years. Greenwood said he spent at least $75 million of investor money on commodities-trading and an advisory firm to pursue his fascination with museum-grade teddy bears and other collectible stuffed toys. About 1,000 stuffed animals were later sold at auction for more $1.1 million pounds ($1.6 million).
U.S. District Judge Miriam Cedarbaum in Manhattan sentenced Greenwood noting there were a number of people who were “devastated” by his crime. A panel of of appeals court judges in Manhattan said prosecutors conceded there was no evidence any individuals were harmed because Greenwood’s investors included pension and retirement plans.
The appeals court said Cedarbaum might impose the same prison term because many individuals who invested in those plans may have lost their savings. Greenwood is at a federal prison in Butner, North Carolina.
The case is U.S. v. Greenwood, 09-cr-722, U.S. District Court, Southern District of New York (Manhattan).