• August 31, 2015

Hedge-Fund Manager Pleads Guilty to Multimillion-Dollar Swindle of 4 Universities

A former hedge-fund manager has pleaded guilty to criminal charges in an investment scam in which he bilked as much as $900-million from investors, including four university endowments.

In his plea, Paul R. Greenwood said on Wednesday that he and his partner, Steven Walsh, had spent money from the investment accounts on themselves and their family members. According to investigators, the two spent at least $160-million on mansions, horses, rare books, and an $80,000 collectible teddy bear. Mr. Walsh has pleaded not guilty, and Mr. Greenwood will testify against him at trial.

The two promised low risks and high returns to investors in what was essentially a Ponzi scheme. Their 16 institutional investors included the University of Pittsburgh ($65-million invested), Carnegie Mellon University ($49-million), Bowling Green State University ($15-million), and Ohio Northern University ($10-million).

The universities realized something was wrong last year, when they discovered that much of their assets had been signed out as promissory notes attributed to Mr. Walsh and Mr. Greenwood. Carnegie Mellon's treasurer traveled to the firm's offices in New Jersey and Connecticut in an unsuccessful quest to find out what had happened to the university's investment.

After the two money managers were arrested, an investment adviser who works with university endowments said that background checks should have spotted problems with the fund, and that he had advised colleges to pull out of it.

A court-appointed receiver is pursuing the pair's assets in an attempt to recoup some of the losses for investors. Mr. Greenwood's assets will be auctioned off, including, presumably, his collection of rare stuffed animals. He faces a prison sentence of as long as 85 years and hundreds of millions of dollars in fines at his December sentencing, according to news reports.


1. procrustes - July 29, 2010 at 04:15 pm

"promised low risks and high returns." Why would they need a background check to smell fraud? These are the kinds of decisions made by "experts" who are responsible for millions?

2. jesor - July 29, 2010 at 05:50 pm

I just want to see what an $80K teddy bear looks like.

3. 22009746 - July 29, 2010 at 05:54 pm

Me too jesor :)

4. blue_state_academic - July 29, 2010 at 06:21 pm

I suspect you'd be very unimpressed -- probably looks not unlike that ratty teddy bear your kid has knocking around the back of his or her closet

5. trendisnotdestiny - July 29, 2010 at 06:37 pm

Where did hedge fund manager get his degree from?

It might be interesting to see which schools graduate the most white collar criminals (caught and suspects)....

6. trendisnotdestiny - July 29, 2010 at 06:38 pm

Imagine if the university had to pay a fine for every fraudulent business practice experienced by the public?

7. trendisnotdestiny - July 29, 2010 at 11:51 pm

Hedge Fund Partner: Steven Walsh

University of Buffalo 1966

"One of the reasons I went to Buffalo was that I got a nice letter from the basketball coach," says Walsh. "I went up there thinking about basketball and baseball, then after playing freshman baseball, I moved over to intramural sports and had a great time." In part because of his intramural experiences, Walsh stresses the value of UB's tremendous athletics facilities for all students, whether they play on varsity teams, intramural sports or just enjoy working out." (from UBT Alumni Profiles)


8. trendisnotdestiny - July 30, 2010 at 12:17 am

Paul R Greenwood

Greenwood is a longtime horseman who raises ponies on a 300-acre farm in North Salem, Westchester County, which he bought from Paul Newman and Joanne Woodward for $2.1 million in 1984. He also is a town supervisor. He and his partner were former partial owners of the NY Islanders

Read more: http://www.nydailynews.com/money/2009/02/25/2009-02-25_two_exislanders_bosses_nabbed_for_steali.html#ixzz0v8PIyGEf

9. honore - July 30, 2010 at 08:10 am

trendisnotdestiny...thanks for the background information

What is particularly disturbing is that "administrators" at each of these schools apparently did very little research into these these clowns or their companies. No surprises here.

As for the teddy bears, I am sure Walsh and Greenwood will learn more about "bear" culture in prison from their new "room-mates".

10. trendisnotdestiny - July 30, 2010 at 10:23 am


This story is particularly aggravating for me.... it reminds me of all the those predatory practices used to secure immediate business(especially, during a period where Bernie Madoff was so prevalent and Harry Markopoulous was testifying about anytime on wall street where investment returns are promised that it is obvious a Ponzi scheme)....

I do not know what the impact is for these four colleges but I imagine they are fiduiciaries that are required to demonstrate due diligence. Also, I would like to point out that the states involved (Penn & Ohio)have been among the hardest hit in the country over the decade (outsourced and swindled at every level)......

This reminds me that the intrusion of big finance and wall street into the educational marketplace is going to end badly... I am really tired of the 'me first mentality' in this failing empire. I do not take great satisfaction in their imprisonment when there are hundreds of "hydra-like" serpentine hedge fund managers to take their place. And to top it off, our nation's economic team under Geithner/Summers/Banking Cartel are adverse to the best person to address inequities in the marketplace (Elizabeth Warren) because she is too combative....

11. aylwin_forbes - July 30, 2010 at 12:56 pm

One wonders what future lies in store for the financial genii at these universities that were snared. Surely some culpability must lie with them too.

12. russelld - July 30, 2010 at 01:33 pm


13. 11159995 - July 30, 2010 at 07:18 pm

I suggest that the rare books be donated to the four universities' libraries.--- Sandy Thatcher

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