Wednesday, 24 August 2016
Last updated 19 min ago
Oct 5 2010 | 1:32pm ET
One of the more unusual proceeds on any Ponzi scheme will hit the auction block later this month, as admitted hedge fund fraudster Paul Greenwood sells off most of his prized teddy-bear collection.
Greenwood, who pleaded guilty in July to defrauding investors in his Westridge Capital Management and WG Trading Co. of US$545 million, will sell the 1,300 Stieff teddy bears on Oct. 13 at Christie's International in London. Greenwood said at his plea hearing that he had surrendered his assets to the government to be auctioned off.
"Greenwood is the seller," teddy-bear dealer Jasper Pearson told Bloomberg News. "Greenwood's collection is of extraordinary quality. He bought only museum-grade pieces in mint condition."
The collection is expected to fetch as much as US$1.9 million. Greenwood has agreed to forfeit at least US$331 million. His alleged co-conspirator Stephen Walsh, who worked with Greenwood as a top executive of the New York Islanders hockey team in the 1990s, has maintained his not-guilty plea. Greenwood has to pay a further US$83.5 million judgment against him.
Greenwood built up the collection of 1,348 teddy bears over the last 15 years. He housed them in dramatic "collector display cabinetry" atop a spiral staircase in his home, and maintained a spreadsheet to keep track of all of them.
Greenwood pleaded guilty to six counts of conspiracy and securities fraud. According to prosecutors, he and Walsh set up WG shortly after leaving the Islanders and began skimming hundreds of millions of dollars from investors for their own personal use. In addition to the priceless teddy bear collection, the allegedly ill-gotten gains bought an apartment for Walsh's ex-wife, among other things.
Greenwood isn't the only convicted hedge fund fraudster giving up something near and dear to him. James Nicholson, whose unrelated Westgate Capital hedge fund fraud cost investors as much as US$140 million, saw his 9,261-square-foot chateau in Saddle River, N.J., sold for US$4.6 million. The U.S. Marshals, who sold the 21-room mansion, had to cut the price twice before finding a buyer.
The home, which features a four-car garage, gym, theater, library, elevator, wine celler, pool with cabana and nine full bathrooms, originally listed for US$7.9 million. Nicholson paid US$5.7 million for the home four years ago.
The Marshals have already sold three other homes owned by Nicholson in New York City, Southampton, N.Y., and Palm Beach, Fla. He likely won't need any of them anyway, as he faces up to 45 years in prison at his sentencing later this month.