Walsh Greenberg & Co the latest securities firm to come under attack from the SEC and the Commodity Futures Trading Commission for fraud, takes ex-wife, Janet Walsh Schaberg along for the ride. According to Reuters:
NEW YORK (Reuters) – Two money managers who oversaw investments for Carnegie Mellon University and other institutions were arrested on Wednesday on charges of running an estimated $550 million, decade-long swindle, the latest in a wave of big financial fraud cases. Paul Greenwood, 61, and Stephen Walsh, 64, managing general partners of broker-dealer WG Trading Co with main offices in Greenwich, Connecticut, were charged by U.S. prosecutors with conspiracy, securities fraud and wire fraud.
The pair, like the “Grandfather of the ponzi” Bernard Madoff, are accused of misappropriating client funds for personal use, including buying expensive teddy bears, horses, art and condominium apartments.
Specifically, partner Stephen Walsh is accused of using client money to purchase a lavish multi-million dollar apartment for his ex-wife Janet Walsh Schaberg, the mother of his two fine children Andrew and Sarah Walsh, and a fine woman who has done good things in society, like establishing the Long Island Alzheimer’s Foundation in 1987. Her foundation which she lovingly refers to as LIAF, was “formed to raise awareness and money for community- based programs to help those diagnosed and their families.”
See, Janet Walsh Schaberg is a good person. She was a good wife, and she was even a good mother. She was also a great lover of animals. Why does she now have to be drawn into this mess that her ex-husband got her into? That is not fair.
Well, like it or not, fair or not, she’s involved. Because her husband took money that belonged to other people (allegedly) and bought Janet a $3 million dollar apartment as part of their divorce settlement. So, technically, I guess that settlement agreement between Janet and Stephen Walsh can and will be set aside. OMG. Poor Janet is going to find herself on the streets if she doesn’t have any money of her own, or if she can’t use the foundation money. Because that settlement is a contract but it is one that is predicated on fraud and is thus voidable. OMG. Says the Huffington Post:
Greenwood and Walsh ran Greenwich, Conn.-based WG Trading Company LP and Westridge Capital Management Inc., based in Santa Barbara, Calif. They also had offices in Manhattan and Jersey City, N.J.According to the criminal complaint, their clients included “charitable and university foundations, retirement and pension plans and other institutions.”
But these are just allegations, I should point out. We don’t know the facts yet, and Janet still has a chance of keeping her apartment. I think that even in the case of fraud, there is such a thing as “personal assets.” What I mean is that these Wall Street King pins like Madoff, Nadel, Dreier, Walsh, Greenberg, and the rest of them, they got a salary too. Are you trying to tell me that no portion of their salaries was legit? They worked, right? And they got paid, right? To the extent that a portion of the money they have in their accounts is payment for their work even if it came from running a company that engaged in some fraudulent activities, it doesn’t negate the fact that they worked, and that the whole entire company was not necessarily one big fraud — only portions of their activities was fraudulent. So, in that case, shouldn’t these guys get to keep at least a portion of their assets that comes from salaries they paid themselves? No? I mean, is all of it “fruits of the poisoned tree”?
I am sure Ira Sorkin (he’s a bleeping Genie, this Ira Sorkin, btw. He represents Madoff and now he is representing Walsh) will figure out a way to make this whole nightmare go away. Ira’s a magician I swear to god and I wish I could apprentice with him. And you know what? There’s got to be an argument he can make as to why Janet Walsh Schaberg gets to keep her $3 million dollar condo.
I can’t think of the way off the top of my head to be perfectly frank. I mean, I am stumped big time by the magnitude of the financial fraud these boys on Wall Street routinely seem to orchestrate. I mean, they must have really big brains to have pulled this stuff off for so long. You have to wonder why it took the government so long to figure out that most of what is going on on Wall Street is a massive fraud! It’s all fraud. Most of it is totally bogus. These people were not really making any money. It was a lie. All of it. It is astounding, that, like, so many of these boys got away with so much for so long. How can that be? I mean, is anybody on Wall Street legit? Is any of that money clean? Check out all our Madoff posts here. We have a ton of them: http://www.divorcesaloon.com/index.php?s=madoff
And then, the wives. There are always the wives of these tycoons. These trophy wives who are so posh, and pampered and, I mean, they live better than movie stars. You know? But why envy these women? It makes no sense to envy trophy wives. Their lives are, to a great extent, just a big lie, a house of cards that will come crumbling down eventually. Or so it seems.
OMG. Well, what’s the takeaway? I don’t know. I mean, I’m sitting here wondering, is Janet going to be homeless? What is she gonna do?