A former co-owner of the Islanders who helped run the once-proud franchise into the ground in the early 1990s copped a plea on Friday to securities fraud charges.
Stephen Walsh, a 69-year-old money manager at WG Trading Investors, faces up to 20 years behind bars after admitting in Manhattan federal court that he conspired with hedge-fund partner Paul Greenwood to cheat investors out of $554 million between 1996 and 2009.
Walsh, of Sandy Point, also agreed to forfeit $50 million to the feds — the total he personally profited from the fraud. He used the cash to finance a luxurious lifestyle that included buying fancy cars, investing in business ventures with his children and paying millions of dollars to his ex in a divorce settlement.
“Stephen Walsh and his partner Paul Greenwood ran an investment operation that was a veritable money-making machine — for them,” Manhattan US Attorney Preet Bharara said afterward.
Greenwood, who previously admitted spending $3 million of his ill-gotten gains on nearly 1,350 antique German teddy bears, pleaded guilty in 2010 and had agreed to testify against Walsh if the case went to trial. Greenwood admitted taking more than $75 million from clients.
Both swindling execs were part of the so-called “Gang of Four” owners, which owned the NHL’s Islanders from 1991 to 1996, as it lost millions of dollars. Many hardcore Islanders fans blame them for the team’s fall from its days as a 1980s dynasty.
They were also notoriously ripped after changing the team’s longtime “NY” logo in 1995 to feature a dreaded fisherman. The team returned to its original jerseys in 1997 after the club was sold.