University Times

A large portion of Pitt endowment funds that were lost in an investment scheme has been returned to the University.

Pitt received $44.4 million — about 85 percent of its net investment — last week in a distribution from Robb Evans & Associates, the court-appointed receiver in connection with the Westridge Capital Management fraud case.

Brick Kane of Robb Evans stated that, per a March 21 federal court order, the receiver on April 21 began distributing $792 million to investors in entities operated by Paul Greenwood and Stephen Walsh.

Greenwood and Walsh, who operated Westridge Capital Management, WG Trading Investors and other related firms, were charged in 2009 with operating a $1.3 billion Ponzi-style scheme that misappropriated money from institutional investors including Pitt and Carnegie Mellon University, as well as pension funds and foundations.

Instead of investing the funds, the two men are accused of spending millions on lavish lifestyles that included the purchase of horses, mansions, cars, art, books and collectibles.

According to Pitt associate director of news John Fedele, the University previously recovered approximately $9.3 million from a Westridge-related account.

“All of the funds recovered have been returned to the University’s consolidated endowment fund, and its remaining unrecovered principal interest represents less than $8 million or approximately 0.3 percent of the University’s $2.4 billion endowment,” Fedele stated.

More of investors’ money could be returned to them as the receiver continues its efforts to recover additional funds.

CMU announced last week that it had received payments totaling more than $40 million, which represents approximately 83 percent of its $49 million investment.

Pitt and CMU jointly filed a complaint against Greenwood and Walsh and their firms in 2009 in federal court in Pittsburgh in hopes of recouping their investments, which included an estimated $65 million of Pitt’s endowment. (See March 5, 2009, University Times.)

The University’s FY09 financial statement reported the value of its investment as $34.9 million, representing a 50 percent write-down from its previously recorded fair value. (See Oct. 29, 2009, University Times.)

Pitt’s investment included $21.25 million that was wired to WG Trading Co. just days before regulators suspended Greenwood and Walsh. Although the University argued that those funds should be returned in their entirety, that amount was included as part of Pitt’s receivership claim, according to Fedele.

—Kimberly K. Barlow