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April 21, 2011

State Recovers $215 Million IPERS Money from Westridge Fraud Case

(DES MOINES, Iowa)  Attorney General Tom Miller announced that a court-appointed receiver Thursday transferred $215,226,105.10 to the State of Iowa as a partial recovery in the Westridge Capital Management fraud case.

The Iowa Public Employees Retirement System (IPERS) made investments in Westridge in 2007 and 2008.  In 2009 the two principals of WG Trading Co. and Westridge Capital Management were indicted in federal court and charged with misappropriating institutional investor capital.  One has pleaded guilty and awaits sentencing, while the other awaits trial.

The recovered $215 million represents approximately 85 percent of IPERS’ remaining principal investment.

“This is a significant portion of IPERS’ investment,” said Miller, who assigned Deputy Attorney General Jeffrey Thompson to represent IPERS in the claims process.  “Considering the scope of this alleged investment scheme, it’s good news that we were successful in recovering this amount.”  Miller noted that the state continues to attempt to recover additional funds.  “Jeff Thompson and our staff have really worked hard on this case, they’ve done a great job, and it really paid off.”

U.S. District Judge George Daniels, of the Southern District of New York, ordered a court-appointed receiver, Robb Evans & Associates, of Sun Valley, California, to collect and distribute $815 million of the recovered assets to dozens of institutional investors, including IPERS.  IPERS terminated its investment contract with Westridge, of Santa Barbara, California, in February of 2009.


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