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Trustee at UB Foundation charged '66 graduate caught in securities fraud

A University at Buffalo graduate, donor and board member of the UB Foundation was one of two men charged this week with looting $554 million of client investments to fund a lavish lifestyle.

Stephen Walsh, 64, a 1966 UB graduate from Long Island, and Paul Greenwood, 61, of Westchester County, were arrested by FBI agents in New York City Wednesday in the latest investment-fraud scandal.

No UB funds were invested with Walsh, said university officials, who released a brief statement on Friday.

"Mr. Walsh has been an inactive member of our foundation board since March 2004. Furthermore, we have a policy that prohibits investing funds with any member of our foundation board."

Walsh is one of 21 trustees on the UB Foundation, the non-profit corporation that helps manage UB's philanthropy, fundraising and grants.

His term on the board is set to expire in June, but UB distanced itself from the alum on Friday.

"We consider Stephen Walsh to have resigned from the University at Buffalo Foundation's board. He has not attended a meeting since 2004," according to a statement.

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

If convicted, they face as much as 20 years in prison on each of the fraud counts and five years for conspiracy.

They were released on $7 million bond each.

The two money managers are accused of using their clients' investments as their personal piggy bank since 1996 to buy multimillion-dollar homes, luxury cars, a horse farm and horses and rare collectibles, according to the Securities and Exchange Commission.

Among the alleged victims were Carnegie Mellon University in Pittsburgh, which invested more than $49 million, the University of Pittsburgh, which invested more than $65 million, and the Iowa Public Employees Retirement System, which invested about $339 million.

Walsh, a former minority owner of the New York Islanders, graduated from UB in 1966 with a degree in political science.

He returned to UB for a reunion the next year, then didn't visit the campus again until meeting former UB athletics director Bob Arkeilpane in the 1990s, according to a 2001 profile of Walsh in an alumni magazine.

Walsh and his wife, Janet, gave $250,000 to the athletics department in 2001, when he served as chairman of a UB athletics committee to raise money for the program.

Walsh, who played intercollegiate baseball his freshman year at UB, wanted to raise the stature of the university's sports program.

The athletics office in Alumni Arena was named for him.