Former New York Islanders Owner Sentenced In Securities Fraud

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Former New York Islanders Owner Sentenced In Securities Fraud

Paul Greenwood, an ex-money manager who used to co-own the National Hockey League’s New York Islanders was sentenced to ten years in prison in connection to his role in a scheme that fraudulently earned about $554 million over more than a decade. Noting his cooperation with authorities, Greenwood hoped to get a lesser sentence. U.S. District Judge Miriam Goldman Cedarbaum, however, disagreed and gave Greenwood the lengthier sentence, pointing to “devastating” losses to investors. She also ordered Greenwood to forfeit $83.5 million. Greenwood’s attorney believes his client will appeal.

According to prosecutors, Greenwood as chief financial officer at WG Trading Co. in Greenwich, Connecticut swindled university foundations, charities, and other investors between 1996 and 2009. They believe that Greenwood misappropriated $131 million in investor funds. Greenwood and CEO Stephen Walsh allegedly issued $554 million in promissory notes to investors to conceal the misappropriation and WG’s lack of profitability.

Greenwood and Walsh used investor funds to help Walsh’s children run businesses, cover payments to Walsh’s ex-wife, and enable Greenwood to operate a horse farm and buy a stuffed teddy bear collection, according to prosecutors. The two also used $2.6 million to buy a stake in the New York Islanders in 1992 and sold it in 1996.

“I’ve lied, I’ve cheated and I’ve stolen,” Greenwood said in court. “Words can’t express my sorrow and remorse for what I have done.”

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.

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