The Commodity Futures Trading Commission (CFTC) today announced the successful conclusion of the receivership in CFTC v. Walsh, et al., a $1.3 billion Ponzi scheme case the CFTC filed in 2009.

The US Southern District Court has approved the receiver’s final account and report, discharged the receiver, and accepted the receiver’s request to deposit the remaining receivership funds with the court.

During the receivership, over $1 billion was returned to investors in a commodity pool operated by defendants Paul Greenwood and Stephen Walsh, constituting 100% of all approved investor claims. The court-appointed receiver for this matter was Robb Evans & Associates LLC.

The order follows the entry of final judgments against Walsh and Greenwood on November 13, 2019 and November 19, 2019, respectively. The assets marshalled in this case include over $88 million in funds clawed back from fully redeemed investors, a $14 million horse farm in North Salem, N.Y., a collection of antique teddy bears sold at auction at Christie’s for over $3.7 million, and an estate in Sands Point, N.Y.

The CFTC complaint, filed in the U.S. District Court for the Southern District of New York on February 25, 2009, charged Greenwood and Walsh, both residents of New York, with operating a Ponzi scheme that misappropriated at least $553 million from commodity pool participants in connection with entities they owned and controlled, such as Westridge Capital Management, Inc., WG Trading Investors, LP, and WGIA, LLC.

Under the court-approved plan, the receiver made an initial distribution of approximately $792 million to investors, mostly institutions, such as state and county pension funds, private pension funds, and university foundations. Three additional court-approved partial distributions have since taken place, and a final distribution completed the process resulting in victims of the fraudulent scheme obtaining a return of all of their approved claims.

Both Greenwood and Walsh eventually pleaded guilty to criminal violations in the related criminal action, agreed to consent forfeiture judgments of approximately $85 million and $50 million, respectively, and served approximately five years and four years in federal prison, respectively.

In the civil proceedings filed by the CFTC and SEC, both Greenwood and Walsh ultimately agreed to consent orders of permanent injunction that enjoined them from any ongoing violations and further imposed permanent trading and registration bans.