Sacramento County's pension system stands to lose as much as $52 million thanks to the latest Wall Street scandal.
The FBI on Wednesday arrested two New York men – Paul Greenwood, 61, and Stephen Walsh, 64 – in a suspected fraudulent investment scheme involving companies they controlled, including Westridge Capital Management and WG Trading Investors.
A federal complaint says the men are suspected of siphoning off about $553 million in investments from groups such as retirement pension plans and university foundations.
The Sacramento County Employees Retirement System, or SCERS, had invested $90 million with the men and their companies in June, said Richard Stensrud, SCERS' chief executive officer. The recession had "whittled down" that investment to about $57 million when SCERS officials first learned there might be a problem, he said.
The National Futures Association, a regulatory group, suspended Greenwood and Walsh earlier this month following an audit that allegedly uncovered fraud, court documents say.
Learning of that audit, pension officials tried to track down their money and managed to retrieve about $5 million, Stensrud said. Another $52 million is still in limbo.
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