Another Three Large Investment Scams Exposed – More Likely to Follow

February 26, 2009

(ChattahBox) — Like worms coming out the ground after a rain storm, Madoff’s $50 billion fraud set off a run by many investors to pull their money from companies who are now wriggling around with no where to hide.   Three more alleged investment schemes have been rooted out yesterday (by the NY Post), swindling clients to the sad tune of more than $1 billion. were taken down.

Such was the case when several worried investors tried to redeem money from James Nicholson’s Westgate Capital fund. Nicholson allegedly told investors he was putting their money into hedge funds, and that those funds were performing well. The New Jersey man tried to reassure them by sending out $5 million in checks – which bounced, court papers say. Prosecutors charged him with defrauding investors out of $100 million, but fear as much as $900 million may be missing.

Paul Greenwood and Stephen Walsh took hundreds of millions from investors including charitable and university foundations and pension funds and said that they were investing their money conservatively, but were in fact spending the money wildly on themselves.

But Greenwood and Walsh used “$160 million for personal expenses, including rare books at auctions, horses, Steiff teddy bears for as much as $80,000 [each] at various auctions . . . and a residence for Walsh’s ex-wife, Janet Walsh, in the amount of $3 million,” the Commodities Futures Trading Commission said in a civil suit…

Records showed that of the $812 million in assets held by their operation, $794 million were in promissory notes saying Greenwood and Walsh owned their own fund money.

Mark Bloom who once worked for Greenwood, and apprently learned his lessons well, took millions from investors, lied about where he invested it, collected $1.6 million in fees, and is now insolvent!

The government can stimulate all they want but when you can’t trust Wall Street and the financial institutions, people are going to be reluctant to invest any extra cash they might have.


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