WG Hedge Fund Fraudster Pleads Guilty

Jul 28 2010 | 1:31pm ET

Former hedge fund manager Paul Greenwood has admitted to defrauding investors of as much as $900 million.

The principal of hedge fund Westridge Capital Management and general partner of WG Trading Co. also pointed the finger at his co-principal and co-defendant, Stephen Walsh, with whom he was indicted in February. The two men were top executives with the New York Islanders hockey team in the 1990s.

Shortly after leaving the Islanders, the two men set up WG and began skimming hundreds of millions of dollars from investors for their own personal use, according to prosecutors. The scheme began as early as 1996, with the two using the money to buy, among other things, collectible teddy bears and an apartment for Walsh’s ex-wife, prosecutors said.

Greenwood, who also served as town supervisor of North Salem, N.Y., pleaded guilty to six counts of conspiracy and securities fraud. He said he conspired with Walsh to defraud investors of $545 million; prosecutors want the two men to forfeit $131 million.

Both men originally pleaded not guilty to the charges last July. The two have also been sued by the University of Pittsburgh, Carnegie Mellon University and the Securities and Exchange Commission.

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