Walsh brother sentenced for role in investment scheme
Gregory Walsh, a former Morgan Stanley executive and the brother of disgraced Lake Oswego banker Geoffrey Walsh, was sentenced in U.S. District Court on Tuesday to 24 months in federal prison for conspiracy to commit mail and wire fraud in a scheme involving an Arizona woman and three condominiums in California.
His prison term will be followed by three years of supervised release.
According to court documents, the Walsh brothers worked together, starting in February 2011, to persuade the woman to loan Geoffrey Walsh more than $1.1 million for a real estate investment scheme. Gregory Walsh told the woman, a client of his at Morgan Stanley and a recent widow, that the money would be used to purchase three condominiums in the Palm Springs area that would be titled in her name and sold within one year.
Instead, court documents say, then-Bank of Oswego Vice President Geoffrey Walsh titled all three properties in the name of his business and sold two of the properties without the knowledge or permission of the client, using the proceeds to satisfy personal financial obligations.
In January 2013, Geoffrey Walsh asked his brother to gauge the same client's interest in loaning him an additional $2 million for a real estate development project in Oregon. Gregory Walsh transferred the money from his client's Morgan Stanley account without the investor's knowledge or approval, court documents say, and on March 5, 2013, the majority of the funds — more than $1.7 million — were used to pay the balance of a line of credit at the Bank of Oswego for Geoffrey Walsh's benefit.
Geoffrey Walsh spent the remainder of the funds on other financial obligations, court records say.
Last month, Geoffrey Walsh was sentenced to 30 months in federal prison, followed by three years of supervised release, after pleading guilty to one count each of conspiracy to make false bank records, conspiracy to commit mail and wire fraud and wire fraud.
In a separate but related case, former Bank of Oswego CEO Dan Heine and former CFO Diana Yates are scheduled to be sentenced March 5 for their roles in a scheme to hide the bank's true financial status from directors and regulators. A U.S. District Court jury found the former executives guilty in November 2017 of one count of conspiracy to commit bank fraud and 12 counts of falsifying bank entries, reports and transactions.
Geoffrey Walsh was a key government witness in that case.
— The Review
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