IPERS seeks to recover $291 million from investment scam

DES MOINES – Leaders of the Iowa Public Employment Retirement System said Thursday they are seeking to recoup over $291 million in investments put at risk when federal regulators halted an alleged investment scam earlier this year.

Donna Mueller, IPERS chief executive officer, said her office is making a claim to recover $291,119,078 in withdrawn IPERS investments with the court-appointed receiver assigned in the federal fraud probe of Westridge Capital Management and WG Trading Co.

However, Mueller cautioned that she has been advised by legal counsel that the proceedings “could take years to resolve” given the complexity of the case and the potential claimants seeking to recover lost investments.

Last February, IPERS officials announced they had terminated a contract with Westridge Capital Management and were seeking to recover assets valued at $339 million. Westridge and WG Trading managed about 2 percent of IPERS' investment portfolio since March 2007.

Two days later, federal regulators and investigators arrested and charged top Westridge officials with misappropriating at least $553 million as part of an alleged $1.3 billion investment scam.

A federal judge in New York agreed to freeze the assets and protect records of businesses owned by Stephen Walsh and Paul Greenwood after the Commodity Futures Trading Commission brought civil charges against them.

Greenwood, 61, of North Salem, N.Y., and Walsh, 64, of Sands Point, N.Y., also were named in a criminal complaint filed by the U.S. attorney for New York's southern district and faced civil action by the U.S. Securities and Exchange Commission.

Federal commodity trading regulators alleged Walsh and Greenwood treated investor money as “their own piggy bank to lavish themselves with expensive gifts that included rare books, horses, a $3 million residence and mohair teddy bears valued up to $80,000.