Remember Paul Greenwood? He didn't get as much press as some other hedge fund managers running Ponzi schemes, even though he should have, if only for the fact that he spent a good deal of investor money on a 1,348 teddy bears, valued at $3 million in total, showcased in “collector display cabinetry” at the top of a dramatic spiral staircase in his home and kept track of via a spreadsheet that noted specifics like “full-dressed in sailor suit, lavender-tipped mohair coat [and] felt spats. Anyway, he admitted today that he financed this passion via a "sort of" Ponzi scheme.
[Greenwood] said today he entered into the conspiracy with partner Walsh and that the two claimed to investors they had an "index arbitrage fund" which promised institutional investors high returns. Greenwood said he and Walsh took out funds for their own personal use, which a federal prosecutor said cost investors between $800 million and $900 million.
"You treated these investments as your own personal bank accounts?" U.S. District Judge Miriam Cedarbaum in Manhattan asked Greenwood today during his plea.
"Correct," said Greenwood, who said that the defendants often paid out investors money if they sought a redemption, using funds from other investors.
"So this was a Ponzi scheme?" Cedarbaum asked.
"Sort of," said Greenwood who told the judge that he took out "in excess of $75 million," spending the money on "a house, a horse farm and antiques."
Greenwood told Cedarbaum today that he has surrendered his assets [including the bears] to the government as part of cooperation, saying they would be auctioned off by the U.S.
"Did you have any doubt that what you were doing was a crime?" Cedarbaum asked.
"No," said Greenwood who remains free on bond.