Three money managers accused of fraud

NEW YORK, Feb. 26 (UPI) -- Federal authorities have arrested two New York money managers alleging their investment fund was used as a personal bank account.

Authorities allege Paul Greenwood and Stephen Walsh's fraud was simpler than the Ponzi scheme allegedly orchestrated by Bernard Madoff that is reported to have lost investors $50 billion, The New York Times reported Thursday.

Greenwood and Walsh, who ran a series of companies, including WG Trading Co. and Westbridge Capital Management, were once part owners of the New York Islanders. Greenwood is the former owner of a showcase horse farm in North Salem, N.Y., that once belonged to actor Paul Newman, the Times said.

But, prosecutors say the two men misappropriated about $668 million of their investors' money, The Wall Street Journal reported.

Victims in the case include Carnegie Mellon University and the University of Pittsburgh, which has invested $49 million and $65 million in the fund, respectively. The Iowa Public Employees Retirement System had invested $339 million.

Authorities charged Greenwood and Walsh with conspiracy, securities fraud and wire fraud.

In a related case, federal authorities arrested WG Trading Co. employee Mark Bloom on fraud charges, alleging he defrauded investors in the North Hills Fund, which he started while working for Greenwood and Walsh.