Madoff's Secret Stash

New York Post ^ | 06/21/2010 | Dan Mangan

[pinstripes715]

Ponzi king Bernard Madoff is telling fellow jailbirds that he secretly funneled $9 billion in swiped funds to three people before he was nabbed, an inmate told The Post.

Madoff says that his partner in crime Frank DiPascali knows who the recipients are -- and that he suspects DiPascali is using that information to cut a better deal with the feds, according to the inmate at the medium-security prison in Butner, NC.

[thefactor]

All the “swindeled” millionaires will be coming out of the woodwork for this.

[Bringbackthedraft]

Great, now the unnamed 3 will get the money transferred out quickly.

[ken5050]

Any news..

[Lonesome in Massachussets]

Madoff says that his partner in crime Frank DiPascali knows who the recipients are -- and that he suspects DiPascali is using that information to cut a better deal with the feds,

Is there no honor among thieves? This is, of course, a classic example of the prisoner's dilemma in real life.

[TheBigIf]

Throughout the MSM it is continued that no one ever seems to ask if Madoff was mob connected. How is it that the SEC never uncovered his exploits unless he was funneling the money for people who had the power to keep his cover.

Interesting now to know that he may have funneled at least 9 billion off to who? While taking the role as the fall guy.

Of course if questions were asked in regards to his possible mob connections then the next logical question would be - what were the connections with the federal government that allowed his operation to continue? Is that why the MSM dosent pursue this possibility? Because it would lead to organized crime connections to the federal government. They have been told not to ask?

[Liz]

Bernie also bragged he had traveled all over the world. The suitcases he carried were probably full of cash.....not leisure wear. Madoff also had a villa on the Riviera, and docked one of his yachts there.

The court appointed trustee looking into Madoff's assets unearthed a labyrinth of interrelated international funds, institutions and entities of almost unparalleled complexity and breadth...... with assets and businesses in 11 separate places overseas.

Keep in mind that Madoff was running multiple scams with the knowledge and consent of wealthy businessman:

(1) a Ponzi fraud that made him and his family personally wealthy;

(2) laundering tax-free money from "foundations and charities" of wealthy "philanthropists,"

(3) IRS fraud facilitation for wealthy businessmen;

(4) a protection racket (shielding his investors from federal scrutiny);

(5) laundering tax-free money that was donated to Democrat candidates (campaign fraud).

[Ann Archy]

Oh PLEASE!! Sounds quite fishy.

[Liz]

SOURCE: Madoff Trustees court filing #524, Oct 16, 2009

Madoff Securities had 244 special non-split strike accounts comprised of his friends----Picower, Norman Levy, Carl Shapiro, family, insiders and fund feeders ----Merkin, Avellino, Bienes, Chais, Jaffe, and Cohen.

The agreed-on returns exceeded 100%---meaning Madoff insiders knowingly took out more than they put in. Picower‘s Foundation took out an astounding 900%---but his widow has agreed to give some of it back to avoid prosecution.

These insider accounts steadily drained billions while Madoff suckered the rubes who continued to invest in good faith and got 10-12% return.

Unknowing investors---suckered by feeder funds----were hit with additional fees.

These accounts were not run by Frank DiPascali.

Some of this money is clawback-able b/c the thieves put in cash in the late stages to keep the fraud going for themselves. Bankruptcy trustee pursuing fraudulent conveyance lawsuits, and Feds or DOJ pursuing criminal charges should stay alert-------this is where the money is.

============================================

THE BIGGEST FEEDER OF THEM ALL---AND HE GOT BILLIONS IN FEDERAL BAILOUTS Madoff depended on feeder funds to funnel investor deposits directly to him. In 2000, J. Ezra Merkin---a prominent wealthy New Yorker who attended sunagoguie with Madoff---told his Gabriel and Ariel fund investors that he was investing in distressed assets and bankruptcies......... when he actually transferred more than one third of each of those funds' money to Madoff.

Merkin's Ascot Partners formed in 1992, held $1.7 billion from 300 investors, and earned him $25.5 million per year by the end of December, 2008. He advised investors that only 15% of the fund was invested with Madoff. "Substantially all" of its assets went to Madoff, although he represented the contributions as only a 15% investment.

Merkin became embroiled in controversy when Ascot Partners investors were told of the connection in a letter faxed to them on December 11. Many of them were not aware or told of the connection to Madoff, and Merkin denied any connection to Madoff when asked by an investor. Merkin lied to a client that his investment was with Morgan Stanley, and protected.

On April 6, 2009, civil fraud charges were filed against J. Ezra Merkin alleging he "betrayed hundreds of investors" by moving $2.4 billion of clients' money to Bernard Madoff without their knowledge.

The complaint states, he lied about putting the money with Madoff, failed to disclose conflicts of interest, and collected over $470 million in fees for his three hedge funds, Ascot Partners LP with Ascot Fund Ltd., Gabriel Capital Corp. and Ariel Fund Ltd.

He promised he would actively manage the money, but instead, he misguided investors about his Madoff investments in quarterly reports, in investor presentations, and in conversations with investors. "Merkin held himself out to investors as an investing guru...In reality, Merkin was but a master marketer."

==========================================

BACKSTORY GMAC chair J Ezra Merkin and Chrysler's Stephen A. Feinberg (who also owns private equity firm---Cerberus Capital Management LP). The two partnered to buy Bank Leumi from the Israeli government for $500M.

BAILOUT SWILLERS Stephen A. Fineberg's private equity firm---Cerberus Capital Management LP--- also owns Chrysler Motors. The US Treasury bought a $5 billion stake in GMAC, and lent $1 billion to GM. This latest loan is IN ADDITION to the $13.4 billion the US Treasury lent earlier to J Ezra Merkin's GM, and Fineberg's Chrysler.

SWILLING TIMELINE In 2006, GM sold 51% of Merkin's GMAC to Feinberg's private equity firm Cerberus Capital Management LP (which also owns Chrysler).

HOGGING AT THE PUBLIC TROUGH In May 2004, Feinberg's "private investment group," Cerberus Capital Management, LP (Cerebrus is the three-headed dog that guards Hades), became majority owner of IAP Worldwide Services, Inc, one of the US Army’s largest contractors in Iraq. In Afghanistan, Feinberg's IAP runs a drug/addiction center" in Kunduz---Kunduz is the largest opium supplier in the world. BUSY LITTLE BEAVER IAP also provides infrastructure support for the British Ministry of Defence in Kandahar....apart from supporting the US Army in Basra.

TIMELINE On October 19, 2006, John W. Snow, Secretary of the Treasury under George H.W. Bush, was named head of Cerebrus.

BAILED OUT AND STILL SWILLING Stephen A. Feinberg's IAP also serves a broad array of federal clients including the US DOD, NASA, the US Geological Survey, the US Agency for International Development, the IRS, and a variety of other federal agencies.

FEDERAL RESERVE INFO A FACTOR? Madoff's connections to J Ezra Merkin and Stephen Fineberg's company---Cerebrus---could also mean the connivers were stealing Federal Reserve insider info. Ex-Treasury Sect John Snow headed Cerebrus. Knowing Federal Reserves moves in advance would make zillions for the thieves...........on top of the billions they were swilling elsewhere. These termites were running rampant allover the US government---Merkin and Feinberg's auto companies received billions in govt bailouts.

[Liz]

ping to post#9

[CutePuppy]

This story, just like the previous one from Bernie's inmate doesn't pass the smell test. you can't just "give" $9 Billions in suitcases full of cash...

Bernie has no reason to tell his "roommate" anything of substance, not that he would understand the real scheme, to begin with. So maybe, he told him some "stories", or maybe not. And diPascali has been cooperating with Feds from the beginning, trying to get a deal; prosecutors even recommended a more lenient sentence to the judge for all his cooperation, but judge isn't going along with it... for now, at least.

I wouldn't be surprised to see this former "roommate" of Bernie's show up on all the "celebrity" shows, like 60 Minutes and try for some book deal. He is just cashing in on his 15 minutes of notoriety.

[CutePuppy]

One prisoner telling another about a hidden treasure... Doesn't that sound a bit like modern version of Count of Monte Cristo?

[CutePuppy]

... what were the connections with the federal government that allowed his operation to continue?

Bernie and most of his early investors were high profile rich (predominately Jewish) Democrats and generous donors to Democratic Party. That includes New Jersey's U.S. Senator Frank Lautenberg and NJ state Senator Loretta Weinberg (D-Bergen), just to name a couple. That may explain the lack of interest to Madoff's operations even in several cases when SEC and FINRA were alerted to the impossibility of his purported financial strategy to provide the stable returns he claimed.

Is that why the MSM doesn't pursue this possibility?

Were he a Republican, like Abramoff, for example, you'd keep hearing about his connections to the government officials and the mob. He is a Democrat, so that subject is not "kosher".

Because it would lead to organized crime connections to the federal government.

Many people see little difference between the two "organizations".

They have been told not to ask?

More likely, they didn't need to be told; they all swim in the the same pond.

[Liz]

......doesn't pass the smell test. you can't just "give" $9 Billions in suitcases full of cash...

There's always the millions in diamonds stuffed in the toothpaste tube trick.

[stephenjohnbanker]

” There’s always the millions in diamonds stuffed in the toothpaste tube trick. “

How did you know I did that?

;-)

[Dem Guard]

So why is Madoff talking so much in prison? Doesn’t he like playing the new bride in prison? ;-)