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Friday, February 27, 2009

Another week, another couple of Ponzi schemes

In a series of posts designed to make me feel even more depressed about my fellow Americans, I've speculated that Ponzi schemes were rampant all over the financial genius sector.

Now, only a few days after my last post, http://mikekr.blogspot.com/2009/02/what-if-its-all-ponze-scheme-still-more.html there are two more to report.

The Wall Street Journal reported
"Paul Greenwood, 61 years old, of North Salem, N.Y., and Stephen Walsh, 64, of Sands Point, N.Y., were arrested by [FBI] and face criminal charges of conspiracy, securities fraud and wire fraud..."

This time, the victims weren't naive investors, but sophisticated investors -- the type of institutional investors who have endowment management departments to make important investment decisions.
"Alleged victims include Carnegie Mellon University, which had invested more than $49 million, and the University of Pittsburgh, which put in more than $65 million, court records show. The Iowa Public Employees Retirement System said it had invested about $339 million, or 2% of its portfolio. The Sacramento County Employees' Retirement System in California said on its Web site that it had invested $89.9 million, or 1.6% of its total fund." "

But wait, there's more! Buried further down in the article -- not even meriting an article on its own -- was another fraud large enough to require a $3mm bond from the alleged perp.
"A third man, Mark Bloom, of New York City, was separately charged by the U.S. attorney's office, in U.S. District Court in New York, with securities fraud and wire fraud for allegedly defrauding investors in North Hills Fund, an investment partnership he started, and operated separately, while working at WG Trading Co."