Posted on 06/17/2009 5:58:05 AM PDT by Liz
Madoff's offspring were long aware of their dad's crooked ways and helped perpetuate his $65B fraud........ former traders Reed Abend and Richard Stahl made the explosive claims in suits against Andrew and Mark Madoff.........claiming the sons lied after a 2001 Barrons article questioned the consistently positive returns......the brothers stated falsely that Madoff's investment advisory was completely legit. It is clear that they had long known that their father's investment advisory business was an illegal enterprise, and that criminal conduct threatened the trading business and its employees, the suits allege......this marks Round 2 with Andrew Madoff, with whom Abend exchanged insults and fisticuffs during a street fight in January.
(Excerpt) Read more at nypost.com ...
18 card-holders were Madoff firm employees...except for SIL Marion Madoff, DIL Deborah West Madoff, and the captain of Madoff's yacht.
His firm was used as a "personal piggy bank" to fund "decadent" lifestyles, and shower family and friends with cash...... including charges at snazzy eateries.....a $9M loan to Peter Madoff, cash transfers for a $4.3M Manhattan apartment for Andrew; a $6.5M Nantucket home for Mark; and a $2.2M home in ritzy Mantoloking, NJ, for employee JoAnn Crupi.
SIL Marion Madoff was paid $163,500 although there is "no evidence" she did any work for the company......
Also on the company's payroll were Madoff's NY and Fla housekeepers, boat captains for himself and company CFO Frank DiPascali.... nearly $1M in corporate payments went to Trump Golf Club, the Breakers and Palm Beach Country Clubs, and Atlantic Golf Club, Bridgehampton, for Bernie and Peter and their wives.
Bro Peter Madoff agreed to surrender a $235,000 vintage Aston-Martin bought by the London-based securities firm.
How much of it is off-shore?
And the head of the Ponzi scheme who sends a 747 low flying over New York and takes a fleet of aircraft on date night is somehow different because his Ponzi scheme is well intentioned.
I'd give them 50-50 odds on that!
Wonder how many clients are going to be found knowing too.
Realtime story contributed by a FReeper: A friend innocently got caught up in a Ponzi one and lost everything even though he himself was a victim. A scum bag 'Investment Manager' targeted Business Owners and after the Ponzi fell apart the 'Investment Manager' and his secretary/lover skipped town and my friend who got in early was then indicted by the FEDS because early on he received 'some' cash profits from the phony investments that never took place. Besides the 'profit money on paper' my friend was originally a Millionaire, or very close to one, and the FEDS took every penny he had, and he had to sell his business, all to pay off 'investors' who got in late. It was like my friend was running the Ponzi scheme.
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REFERENCE It was recently uncovered that Madoff kept detailed notes about his activites and that some "investors" made deals, demanding specific returns on investments.....meaning they were in on the scam. Some investors also wrote Madoff personal checks......evidence of tax evasion and money laundering.
Madoff Investors Probed by U.S. Prosecutors
May 18, 2009 | Reuters
FR Posted 05/18/2009 by CutePuppy
EXCERPT U.S. prosecutors have broadened their criminal investigation of the Bernard Madoff case to at least eight investors and associates, The Wall Street Journal reported......named as under investigation by the U.S. Attorney's Office, are Jeffry Picower and Stanley Chais, two philanthropists who are the target of lawsuits brought by the trustee liquidating the Madoff firm. Carl Shapiro, a women's clothing entrepreneur and close friend of Madoff, is also under criminal investigation....... Investigators have gathered evidence of Picower and Chais telling Madoff how much in returns they wanted and that their accounts would reflect the amounts, the paper said. It said investigators were also reviewing evidence suggesting Shapiro knew his returns were fraudulent. (Excerpt) Read more at cnbc.com ...
$12B was pulled out of Bernard L. Madoff’s firm in 2008, and $6B just three months before he was arrested last Dec..... BVI's Vizcaya Partners Ltd. and Gibraltar-based Banque Jacob Safra Ltd. got $150M (that we know of) about six weeks before Madoff was exposed.
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HOW'D HE DO THAT? To pull off a $65 billion scheme, the Madoff cabal would have had to involve investors, relatives, associates, co-conspirators (and/or subsets of them), businesses and tax-exempt organizations........all with similar goals.
HUGE RED FLAG Some investors were writing personal checks to Madoff.
Madoff may have routed his scheme through telephone lines with a maze of complex telecommunications' systems equipped with call-forwarding and voice mail systems, and numerous postal and commercial mail boxes..........and perhaps money-transfer systems that operate in ethnic enclaves and places like NYC's Diamond District.
The "investment" monies could have been disguised (to evade the IRS) by routing through a network of domestic and international bank accounts using counterfeit checks.....opening commercial bank accounts in the name of bogus businesses and wire-transferring and/or depositing "investment" checks into those accounts.
Madoff's phony checks could have had invalid bank routing numbers, forged endorsements, or been drawn on the proceeds of other counterfeit checks deposited in other bank accounts. Before banks discovered the fraud, the funds might have been transferred out of the accounts……probably offshore----leaving banks unable to recoup their losses.
State and federal tax authorities could have been swindled, if the scheme involved filing hundreds of phony tax returns in real or fictitious names, falsely claiming federal EITC credits (meant to benefit low-income earners).
In an international scheme with offshore ties, the Madoff co-conspirators or subsets of them might have obtained hundreds of taxpayer identification numbers for phantom citizens with worldwide addresses, and used the information, along with phony passports, to claim hundreds of bogus tax refunds.
Investigators poring over Madoff's books have discovered he routinely falsified documents in a fraud that could take months to unravel. In a classic fraud MO, Madoff kept two (or more) sets of books. One set keeps track of losses at Bernard L. Madoff Investment Securities LLC's (his investment advisory arm), while the other set consisted of "investors" writing Madoff personal checks.
Madoff's methods may have included limited-recourse loans to artificially inflate "asset value," so that he could fraudulently borrow real money based on “assets” that didn’t really exist.
Madoff's Web site claimed the firm was technologically-advanced, however investigations found the firm sent paper confirmations of trades via US mail at the end of each day, rather than providing electronic access to this important information. Paper copies provide a hedge-fund manager with the end-of-the-day ability to manufacture trade tickets that confirm the investment results.
It could be postulated that most of his investors figured Madoff was doing something illegal---Wall Street was whispering Madoff was laundering proceeds from Russian mob activities.
If Madoff was helping gangsters steal, some investors might have figured they could make a profit on the deal.
THIS IS HOW DO-GOODER LIBERALS AVOID PAYING TAXES AND LIFE THE HIGH LIFE TAX-FREE Madoff's operation included many tax-exempt "charities and foundations." The IRS has pinpointed foundations as the locus classicus of tax evasion. There's a zillion ways one can evade taxes within a foundation or charity---and live the high life---tax-free. People running them pull money out as salaries, expenses, travel, employ relatives, etc. Checks one foundation or charity wrote to another foundation or charity should be scrutinized..... could involve the biggest frauds, in the form of tax evasion, money laundering, etc. Phony line items might include PR, maintenance, admin, legal fees, etc. This is how do-gooder liberals evade taxes and live the high life tax-free.
This is interesting. The story says that these two guys are suing Madoff’s sons for deferred compensation they are due. Even if the claims are legitimate, and I expect they are, from where do they expect to recover. If they prove their case, that the sons knew of the fraud, then everything the sons ( and all the rest of the family) have in th way of assets will be recovered by the bankruptcy trusteee, and go back into the estate to reimburse those investors who lost funds. You’d think their lawyer would tell them there’s no “there, there”..unless..they know somehting we don’t..
Thanks for that summary.. it neatly ties up a lot of information. BTW I seem to recall that Rahm Emanuel put his house into a non-profit foundation, and he lives there with his huge house off the property rolls since it is the home of a non-profit.
Crooks hand in hand with crooks making sure they get their money by scamming others. They all should be in jail.
According to the Cook County Assessor’s website multi-millionaire Rahm Emanuel's home doesn’t exist. There seems to be no public record of Emanuel ever paying property taxes on this home. The Cook County Assessor’s and Cook County Treasurer’s online records indicate Emanuel’s neighbors pay between $3,500-$7,000 annually.
However, Illinois Review researchers have been unable to locate any evidence that Emanuel--- a multi-millionaire--- is paying taxes.
REFERENCE Obama's COS Rahm Emanuel, and his wife, run a tax-exempt foundation from their Chicago residence: The Rahm Emanuel and Amy Rule Charitable Trust was formed in 2002, when he was elected to Congress. Emanuel’s 4228 North Hermitage home is one of the largest in the neighborhood. Other nearby homes are valued in the $500,000 plus range.
The Emanuel Foundation gets income tax write-offs by Rahm's $25,000 donations to his Synagogue and to his Foundation....and lets Rahm expense personal outlays.
BACKSTORY January 2007 USA Today reported on Emanuel and his wife’s tax-exempt "foundation" (operated out of their Chicago residence). The tax-exempt "Rahm Emanuel and Amy Rule Charitable Trust" was formed in 2002, when the Chicagoan was first elected to Congress. Rahm and his wife, Amy Rule, are its only donors. The Emanuels do not pay real estate taxes b/c their residence is the tax-exempt foundation's office.
Heh----betcha they know plenty. "Somebody" had to be helping ol' Bern wire-transfer all that money offshore.
Madoff claimed he acted alone and kept the others in the dark. Lawyers for Ruth and the others have denied the family knew about Madoff's fraud. SIPC has so far identified 8,848 victims of Madoff's scam, and expect to have paid out $61.4 million to 125 people claiming $368.3 million in losses. The payouts are expected to swell to $100 million by Memorial Day.
Under the legal principle of "fraudulent conveyance, " one cannot profit from a fraud. Those who took money out as the fraud progressed have to return it.
Because this was an undeniable financial scam, SIPC (as the insurance agent) has the right of a first-in-line DIP party and thus an obligation to collect the money from Madoff "estate" to pay off on insurance. This could set up an interesting confrontation between SIPC and the court-appointed trustee for the liquidation of "estate" Irving H. Picard. If some “investors” are found to be complicit in the fraud---that’s a whole other ball game.
Interesting.
Kanjorski, chairman of the House Financial Services capital markets subcommittee, sent SEC Inspector General H. David Kotz a letter today telling him “the time has come for you to act.” Kotz, in January testimony before Kanjorski’s panel, said he hoped to produce some findings in “a matter of months” and that some results may be released on a rolling basis.
“Six months have now passed since you began your investigations,” Kanjorski wrote in his letter. “To the best of my knowledge, the only information that your office has made public” is a one-page overview that didn’t include any findings, the Pennsylvania Democrat said. .....
U.S. Regulators Step Up Exams of Firms That Resemble Madoff’s - BL, June 17, 2009
The Securities and Exchange Commission is conducting a nationwide “sweep” of investment advisers that hold client assets and hedge funds that have “smooth or outlier returns,” Lori Richards, who heads the agency’s inspections office, said today in a St. Louis speech. The SEC also is scrutinizing money managers that employ an “unknown auditor,” she said. ..... U.S. regulators have stepped up examinations of money managers and brokerages that share characteristics with Bernard Madoff’s firm after his $65 billion Ponzi scheme went undetected for at least a decade.
The Banco Santander settlement is not the end of that story:
Geneva Probes Santander Madoff Links as Investor Alleges Scam - BL, June 18, 2009
Prosecutor Dario Zanni said he appointed a magistrate to investigate the complaint filed by Franck Berlamont, head of Geneva Partners, an independent asset manager. Optimal clients lost about 2.3 billion euros ($3.2 billion) on investments with Madoff, who pleaded guilty to 11 counts of fraud after running a $65 billion Ponzi scheme and is awaiting sentencing on June 29. Geneva’s public prosecutor has opened a criminal probe into allegations that Banco Santander SA’s Optimal Investment Services defrauded clients by misrepresenting its relationship with Bernard Madoff.
I think you'll find this interesting:
Madoff Victims Ask for Phony Profits, Not Just Principal - BL, June 8, 2009
A suit, filed Friday in U.S. Bankruptcy Court in New York, claims the court-appointed trustee Irving Picard has incorrectly calculated the money due to Madoff’s victims as the amount of their principal invested minus any withdrawals. The investors, led by 73-year-old New Jersey widow Mary Albanese, claim federal law requires Picard to ensure they are paid the amounts reflected in their account statements, minus any charges owed to Madoff. If successful, the claim would increase the victims’ claims against the Securities Investors Protection Corp., the agency liquidating Madoff’s firm. ..... A group of investors fleeced in Bernard Madoff’s $65 billion Ponzi scheme are asking a bankruptcy court to give them the money they would have earned if they had been invested in the stocks Madoff said they were.
“The woman’s on fire,” Markopolos said yesterday in a speech that opened an investment conference at Boston College’s Carroll School of Management. He singled out Schapiro’s effort to create legislation encouraging whistleblowers. ..... Schapiro, who was appointed by President Barack Obama to head the SEC, told the Senate Banking Committee in March that she needed congressional authority to give whistleblowers financial rewards when they provide valuable information about wrongdoing. Currently, the SEC can only reward informants for tips about insider trading. Markopolos said Schapiro remains handicapped by a staff that he described in his February testimony as suffering from “financial illiteracy.” “She’s making changes at a speed that is unimaginable,” Markopolos said in his speech. “Her problem is she has the wrong staff -- 3,500 chickens trying to chase foxes.” Harry Markopolos, whose warnings of fraud at Bernard Madoff’s company went unheeded, praised U.S. Securities and Exchange Commission Chairman Mary Schapiro for quickly seeking changes aimed at preventing similar schemes.
Paris Investor Seeks Probe Into Citigroup, PwC Over Madoff Role A Parisian placed money with Kingate Euro Fund Limited on the understanding that, with Citigroup’s hedge-fund unit as administrator and PricewaterhouseCoopers’s Bermuda unit as auditor, the fund was sound, the investor’s lawyer, Julien Visconti, said. While the complaint doesn’t name specific targets, it details allegations against the companies, he said. ..... A French investor who lost money on a Bermuda-based fund linked to Bernard Madoff asked prosecutors to investigate the way Citigroup Inc. and PricewaterhouseCoopers LLP described work they did for the fund.
Nice finds——Bernie’s getting nailed from all sides.
Just what WERE those auditors doing?
"...ay, there is the rub! ...that is the question"! To me, this question and exposure of Madoff's links and political relationships, and likely interference into investigation[s] and coverup are more important than Madoff himself or what happens to him personally. Unfortunately, that aspect has been minimized, in my opinion deliberately, by the powers that be from the very beginning of Madoff's unraveling.
A little aside, but here is the lively article about Ruth Madoff, comparing her (unfavorably) with other wives of high profile financial wheeler-dealers caught in a scandal (Boesky, Milken, Rich)
Ruth Madoff: The Loneliest Woman in New York - CNBC, June 15, 2009 "She's perceived as the succubus to Bernie's incubus," said Prof. Richard A. Shweder, a cultural anthropologist at the University of Chicago. "She was inside a circle of people whose wealth has been sucked out of the system."
BTW, Marc Mukasey, son of former AG, who represents Madoff's Frank DiPascali, is defending another, minor schemer Matthew Weitzman of AFW Wealth Advisors:
AFW Advisers Matthew Weitzman Is Charged With Fraud - BL, June 10, 2009 Marc Mukasey, an attorney for Weitzman, declined to comment. Bob Buehler, a lawyer for Purchase, New York-based AFW Wealth Advisers, said the firm is "extremely upset and feels betrayed by Weitzman's actions," and is cooperating with authorities.
PLUS ------if the truth be told-----many of these sucked-out people are also under investigation b/c it was recently uncovered that Madoff kept detailed notes about his activities and that some "investors" made deals, demanding specific returns on investments.....meaning they were in on the scam. Some investors also wrote Madoff personal checks......evidence of tax evasion and money laundering.
REFERENCED ABOVE-----Madoff Investors Probed by U.S. Prosecutors
May 18, 2009 | Reuters
YOUR FR Post 05/18/2009
EXCERPT U.S. prosecutors have broadened their criminal investigation of the Bernard Madoff case to at least eight investors and associates, The Wall Street Journal reported......named as under investigation by the U.S. Attorney's Office........
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This is how do-gooder liberals evade taxes and live the high life tax-free. Madoff's operation included many tax-exempt "charities and foundations." The IRS has pinpointed foundations as the locus classicus of tax evasion. There's a zillion ways one can evade taxes within a foundation or charity---and live the high life---tax-free. People running them pull money out as salaries, expenses, travel, employ relatives, etc. Checks one foundation or charity wrote to another foundation or charity should be scrutinized..... could involve the biggest frauds, in the form of tax evasion, money laundering, etc. Phony line items might include PR, maintenance, admin, legal fees, etc.
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