Money Manager Who Stole $500 Million Serves a Quarter of His Term

(Bloomberg) -- Former WG Trading Co. money manager Stephen Walsh was ordered released from a federal prison after serving a little more than a quarter of his 20-year prison term for his part in swindling investors out of more than $500 million.

Walsh, 75, was charged in 2009 with Paul Greenwood, WG’s former general partner. The two men, former minority owners of the New York Islanders hockey team, used their commodities-trading and investment-advisory firm to steal from institutional investors, including university foundations and charities, to fund lavish lifestyles, speculate in real estate and finance other businesses.

Greenwood pleaded guilty in 2010 and agreed to testify against Walsh. Mark Bloom, a fund manager who stole more than $20 million from clients and then helped prosecutors build fraud cases against his ex-colleagues, was sentenced to three years in prison.

Walsh pleaded guilty to securities fraud in April 2014, agreed to forfeit more than $50 million and was sentenced to 20 years in prison. While he lost a previous appeal of his sentence, Greenwood had his cut in half in April 2016 and is scheduled to be released in July.

Walsh had asked to have his sentence reduced because his lawyers were ineffective. In April, U.S. District Judge Loretta Preska agreed. On Wednesday, Preska cut Walsh’s sentence to time served and ordered him released from federal prison in Danbury, Connecticut.

The case is U.S. v. Walsh, 09-cr-722, U.S. District Court, Southern District of New York (Manhattan).

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