Securities fraud, teddy bears and hockey

The Lexington Herald Leader recently reported that a man sentenced to a decade in prison for securities fraud has had his sentence cut in half. Sixty-nine-year-old Paul Greenwood is best known for three things: his crimes, his fascination with teddy bears and the time he spent as part-owner of the New York Islanders hockey team.

The sentence reduction was ordered because, the judge said, Greenwood had long been involved in charity and because 98 to 99 percent of the money invested in his half-billion-dollar swindle had been returned to its rightful owners. 

Greenwood also apparently gave prosecutors substantial help in their pursuit of Stephen Walsh, another defendant in the case. 

According to a 2014 Bloomberg article, Greenwood admitted spending a jaw-dropping $75 million of investors’ money on teddy bears (museum-grade) and other soft toys. An auction by Christie’s of a thousand of Greenwood’s bears generated more than $1.7 million. 

Greenwood and partner Walsh were minority owners of the Islanders team back in the 1990s.

Greenwood pleaded guilty to conspiracy and securities fraud, admitting to the court that he used investments as his “own personal bank account” and that his scam was “sort of” a Ponzi scheme.

As part of his plea agreement, he forfeited $331 million to the government; the sum he reaped from his swindle. 

Investors are undoubtedly relieved that they were able to get most of their money back. 

With the help of an experienced Lexington law firm, those victimized by securities fraud can also fight for the return of their investments.

On behalf of Mihalek Law posted in Securities Law on Monday, July 11, 2016.

If you believe you may have a claim against your stockbroker or financial adviser, contact us online or call us at 859-233-1805 to speak with a Securities Attorney. MihalekLaw provides representation throughout the country.