Madoff Had Wide Role in Mets’ Finances (Wilpon-Madoff collusion alleged)

Madoff apparently made insider deals with many of his "investors." He would guarantee a certain return if they invested a certain amount. Federal authorities announced a $7.2B deal to settle the largest lawsuit with the estate of "philanthropist" Jeffry Picower---a big backer of Planned Parenthood. Mrs Picower claims her husband did not know Madoff was a crook (as she spent the fraudulent 900% profits). Mr Picower drowned after suffering a heart attack in his Florida swimming pool in 2009.

Keep in mind, Madoff was running simultaneous scams:

(1) a tax evasion scheme for wealthy businessmen ("losing" money is a tax write-off;

(2) a money laundering scam;

(3) a protection racket for affinity groups,

(4) aiding and abetting wealthy tax-exempt foundations to evade US banking laws and the IRS.

(5) hiding money for wealthy businessmen some of which was used for campaign donations (FEC fraud), and foundation fraud (IRS fraud)

THE MADOFF MO The trustee ID'ing his assets found Madoff used the time-tested Wall Street MO----creating a super-secret labyrinth of interrelated international funds, institutions and financial entities of almost unparalleled complexity and breadth......with assets and businesses in multiple places overseas that hid thievery, money laundering and tax evasion.

Keep in mind Bernie‘s investors were savvy, astute successful business people, accustomed to constructing, picking apart and analyzing financial statements. One investor who spoke to reporters was a stockbroker (her family invested with Bernie for generations---the family's patriarch founded the wildly successful Stop and Shop supermarket chain). Other inevstors gave Madoff $100-500 millions to "invest" for years and years.

WILPON ABIDED BY THE CONDONATION LEGAL PRINCIPLE The compelling legal principle of “condonation” is operating here---implied forgiveness for certain behavior. Meaning investors implicitly “condoned” Madoff’s actions over a period of time--sometimes decades.

His investors willingly acquiesced to Madoff's activities in several ways:

(1) Sending Madoff enormous sums of money, sums that were spread out over time (some families invested for generations), even AFTER they had the opportunity to assess their investments;

(2) Referring other investors to Madoff (if the investment was so bad, why did they bring in other investors?);

(3) Taking profits out of the investment, rolling it over, or putting more money in;

(4) Writing PERSONAL checks to Madoff's subrosa spinoff vehicle that was not listed on the Securities Exchange (tax evasion modus);

(5) Accepting, without question, Madoff’s obviously flawed monthly statements.

YEAH SURE---I BELIEVE THIS (/SNIX) The SEC did not have “the slightest clue” about Madoff's financial fraud. Until Madoff confessed.

Earlier news reports say the Mets owners are in a much tighter squeeze than they are letting on. Sterling Equities, which is controlled by Wilpon and son, Jeff, is supposedly worth some $750M and $1B. The Wilpons want to replace roughly $750M,...their losses with convicted Ponzi schemer Bernie Madoff.....and are now in settlement talks with the Madoff estate trustee, who claims they withdrew $48M more than they invested. They are opposing a move to unseal legal papers, saying the papers are attempted "character assassination"..... painting [Mets owners] as persons who should have known that Madoff did no trading".........

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As FReeper ken5050 insightfully posted: Let's assume that the Wilpon's actual investment (cash put IN) with Madoff was say $100 mill, over time...This is the missing number in the article..Further assume that they received fake statements over the years that their "investments" had grown to $750 mill, due to rolling over and reinvesting the profits...and also, they had taken out, i.e. physically received checks for $48 mill..Thus they're claiming that they "lost" $750 mill.

Re the Mets, MLB has capital requirements for team owners. When the bought the team, and also, when the financed the new stadium, they obviously used the "value" of their Madoff accounts in their pwn financial statements. These are now as worthless as the Madoffs statements.

Also, whether or not investors rolled over their profits or took them out as cash distributions, they had tax consequences, and will need to file amended returns. The IRS may have to reimburse some of the revenues collected, but they will fight that..and if, as you state, there were artificial losses generated to clean up the income, then many will have far bigger problems than just losing their money. They could face criminal prosecution for tax fraud.

The trustee is attempting to treat ALL the experienced, knowledgeable BIG TICKET investors the same.. IOW, assume that two different people each put in $100 mill over time.. One let it grow, never took out anything, and had statements showing he was worth $750 mill, then was worth ZERO after the scam was exposed. The other put in the same amount, $100 million, let it grow, had statements showing he was worth $750 mill, but also, over time, had taken out $48 mill.

The bankruptcy master is claiming, and IMHO, correctly, that the latter can't keep the $48 mill..since the whole thing was a sham...it must be clawed back..

Almost everyone who invested with BErnie was dirty in oine way or another. The bigger the investor - the more they knew it was wrong.

Bernie had protection from the Senators in NJ, NY and CT. They made sure the top managers at the S*C never looked to closely at Bernie.

Almost everyone who invested with Bernie was dirty in one way or another. The bigger the investor - the more they knew it was wrong. Bernie had protection from the Senators in NJ, NY and CT. They made sure the top managers at the S*C never looked to closely at Bernie.

N-i-c-e take. Deserves a repeat.

THIS WAS BLOGGED ON THE NYT WEB SITE. Chilling.

BLOGGER Wilpon and others were aware of what Madoff was really doing: this was not a Ponzi Scheme but espionage....Madoff was a 'front' and was funding a vast Israeli espionage operations thru his clients...he also flowed money thru foundations, religious charities, et al..."Ponzi Schemes" do Not last decades (with the exception of Social Security)...The Fed's love to shut down ponzi schemes....Madoff has been trading since the 60's...how can a ponzi scheme, dealing in billions,last for decades right under the Fed's nose here in NY and they not know about it?...Madoff and his espionage network were on 'cruise control' until a major event occurred: Obama's election victory in November, 2008...Madoff was busted by Obama's forces a month later!...this is no 'coincidence'...This was not a ponzi scheme...they don't last decades and certainly not in the billions!....Wilpon knew Madoff was doing legitimate high-yield investments...it's the 'other half' that was the interesting part... This was espionage....and Obama busted him!......

I always wondered who was protecting Bernie. My guess is the Senators in NJ, NY and CT. I am sure they control the S** in NY/NJ/CT. Who approves the S*C’s budget? Bernie had protection. I would bet Schumer, Lautenberg and Joe Liebrman and slimy Dodd in CT made sure no one looked closely at Bernie.

Chelsea had a hedge fund gig. They all grift off wall street, banks and insurance companies. All the senators get a cut of the “skim.”

Bernie also helped his investors cheat on taxes with sham foundations and offshore accounts.

This might explain why it lasted so long. Hey Liz - you know who supposedly pulled the credit line or their investment on Bernie for I think about $4 billion? This was the tipping point. JP Morgan.

It was either an investment or clearing account where JP Morgan clients had investments with Bernie. This supposedly caused “the run.”

I am not sure if there is still a Morgan family behind Morgan but the Chase part of JP Morgan Chase is The Rockefellers.

SEC Official Married into Madoff Family

http://abcnews.go.com/Blotter/WallStreet/story?id=6471863&page=1

JP Morgan pulled the plug on Bernie? So that's why Daley got the WH job. Read on.

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Remember when Goldman Sachs had a Friend in the WH named Rahm Emanuel? J.P. Morgan also has a friend in the WH by the name of Chicago Bill Daley.

Obama's tapping Chicago Bill Daley for WH COS was part of Ohaha's "No-Chicago-Sleazeballs-Left Behind initiative" (to paraphrase Malkin). The first Obama admin----Jarrett, Axelrod, Gibbs, Rahm Emanuel---was top-heavy with people having a personal history with Obama, direct access, and a strong, political bent.

Bill "Let's Count the Ballots Again in this Locked Room" Daley is the new Ohaha COS ......... Daley headed the Chicago Branch of The Daley Family Vote Mfg Division. The Daley family motto is "When We Fix Elections, They Stay Fixed."

NOTE During the 2008 Democratic presidential primaries, Daley was a prominent supporter of Barack Obama. On November 5, 2008, Daley was named to the advisory board of the Obama-Biden Transition Project.

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MORE DALEY TIDBITS: Bill Daley (brother of Chi/Mayor Richard Daley), is former Commerce Secy under Clinton and long-time executive at Wall Street’s JP Morgan Chase.

REFERENCE Lehman's Bankruptcy Estate Sues J.P. Morgan
WSJ | 5/26/2010 | BY MIKE SPECTOR And SUSANNE CRAIG
FR Posted May 26, 2010 by markomalley

Lehman's Bankruptcy Estate Sues JP Morgan Chase & Co., alleging that JP Morgan illegally siphoned billions of dollars from Lehman in the days before the investment bank filed the largest bankruptcy in US history.

The lawsuit, filed Wednesday in US Bankruptcy Court, New York, alleges that JP Morgan Chief Executive James Dimon and other top executives used inside knowledge to take advantage of Lehman as its financial state worsened.

JP Morgan coerced Lehman to turn over $8.6 billion in collateral in Sept 2008, triggering a liquidity squeeze that contributed to Lehman's collapse, the suit said. The estate is hoping to recoup billions in collateral the bank demanded, and other damages. (Excerpt) Read more at online.wsj.com ...

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Daley became associated with Amalgamated Bank of Chicago, where he was first vice chairman (1989–1990) and then president and chief operating officer (1990-1993). Daley returned to the practice of law, as a partner with the firm Mayer Brown (then Mayer, Brown & Platt) from 1993 to 1997, where he served on the board of Fannie Mae.

In December 2001, he was appointed President of SBC Communications Inc. to help reform the company's image.

In May 2004, Daley was made Midwest Chairman of J.P. Morgan Chase and Bank One Corp. to oversee post-merger operations from Chicago. (See JB Morgan billion dollar looting reference above--circa 2008.)

Daley currently serves on the Boards of Directors of Boeing, Merck & Co., Boston Properties, Inc., and Loyola University Chicago. He is also a trustee of Northwestern University and sits on the Council on Foreign Relations.

In 1993, he served as special counsel to the President on issues relating to the passage of the North American Free Trade Agreement (NAFTA). In 1997, Daley became Secretary of Commerce in the second administration of President Bill Clinton, and he remained at that post until July 2000, when he resigned to campaign for the Vice President.

After he resigned as Commerce Secretary he became chairman of Vice President Al Gore's presidential campaign. He was portrayed in the HBO film Recount, about the Florida election recount of the 2000 presidential election, by actor Mitch Pileggi.

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NOTO BENE Daley currently serves on the Boards of Directors of Boeing. Boeing's Corporate HQ moved to Chi-town in Sept of 2001. Boeing was "offered multi-million dollar tax breaks" b/c other cities were wooing Boeing.

So guess what Chicago Mayor facilitated the Boeing FREEBIES - which shifted a huge tax burden to Homeowners for decades to come?

Yup----it was Richard M. Daley, Bill's brother. And then Bill Daley gets picked to be on Boeing's Board of Directors. Watta coincidence.

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JPMorgan overcharged thousands of military families, improperly foreclosed
Housing Wire | by JON PRIOR / FR Posted by DeaconBenjamin

JPMorgan Chase overcharged roughly 4,000 troops on their mortgage and improperly foreclosed on 14 of the families, a spokesperson for the bank said Mon.

Under the Servicemembers Civil Relief Act amended 2003, lenders can be required to lower mortgage rates for active-duty military personnel to 6% and cannot pursue a foreclosure, but according to the report, Chase was slow to make the change for many of the families, charging Marine Capt.

Jonathan Rowles as much as 10% and hounding him with debt collection calls for as much as $15,000 in arrears, according to NBC news. The Rowles case against Chase is still pending, but the bank said it had made the mistakes and is trying to correct the problem.

In a statement sent to HousingWire, Chase said it will be sending roughly $2 million in refunds to families that have been overcharged and will give back the homes that were improperly foreclosed.

Major servicers are under investigation from regulators and the 50 state AGs for other problems in the foreclosure process. Iowa AG Tom Miller said in a statement sent to HousingWire that Chase disclosed the overcharges to him "very recently." "I m concerned and troubled over JP Morgan Chase's disclosure," Miller said. "Our deployed men and women should focus on their deployment.

Neither they, nor their families, should have to endure this kind of financial distraction back home."In Dec, he did say a settlement compensating homeowners was one of many options on the table. "We made mistakes here and we are fixing them," a Chase spokeswoman Kristin Lemkau said. The bank said it is reviewing how it services loans to military personnel, and it has implemented a team that works only for these borrowers.

A NYT BLOGGER posted that Wilpon and other investors were aware of Madoff's secret activities: not a Ponzi Scheme but espionage. Madoff was a 'front,' funding a vast Israeli espionage operations thru his clients...he also flowed money thru foundations, religious charities, et al...

Man, that is chilling to contemplate.

ITEM Some observers also note that the building wherein Madoff carried out his fraud--- the so-called "Lipstick Building" in Manhattan---is owned by Bronfman, his partner Rubin Schron, and the Israeli govt.

Would be easy to launder money into Israel through leasing deals.

Landmark Lipstick Bldg, Third Avenue, NYC.

After his fall, Bernie's three-floors was crawling with feds trying to unravel what happened.

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ITEM US regulators fined the Israel Discount Bank of New York $12 million for violating federal and state laws designed to thwart money laundering. The Israel Discount Bank of New York (controlled by the mega-rich Bronfman’s--and founded by the father of J. Ezra Merkin---who had billions w/ Madoff) had failed to set up an adequate program to identify and report money laundering, according to federal and state regulators.

A "substantial" part of $35.4 billion in third-party wire transfers during the year ended March 2005 showed traits common to laundering operations, the US complaint said.

According to The Jerusalem Post’s November 2, 2006 edition, the scale of money-laundering going on at The Israel Discount Bank of New York was much larger than the infamous Brazil case reported in the New York Times.

NOTE Israel Discount Bank opened a branch in Switzerland in 2000.

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ITEM New York University University filed a lawsuit claiming J. Ezra Merkin turned over his investment responsibilities to Madoff thus losing $24 million of the school's money.

The suit names as defendants Merkin's Ariel Fund Ltd.; the fund's investment manager, Gabriel Capital Corp.; and Fortis Bank. NYU had invested $94 million in Ariel, a partnership between Merkin and Fortis, in the mid-1990s. A lawyer for Mr. Merkin said the school only invested $30 million and made $60 million. Ariel plans to liquidate due to Madoff-related losses, but a temporary restraining order prohibits assets from being transferred out of the fund.

ITEM Martin Rosenman, managing member of Rosenman Family LLC, NY-based heating oil distributor, wired $10 million to Madoff via a JPMorgan Chase Bank account on Dec. 5, just six days before Madoff's arrest. The funds weren't supposed to be touched until Jan. 1, according to a suit filed in bankruptcy court, but Mr. Rosenman received a statement Dec. 5 explaining the money was used to sell short $10 million in U.S. Treasuries. There is no record that the Treasury short ever occurred.

Great finds and great job at connecting the dots. JP Morgan, Goldman and their Obama cronies plus hedge funds set in motion events in the late summer of 2008. The Sandlers dumped their crap World Savings on a clueless Wachovia. Rahm and Gorelnick plus others knew the garbage Fannie And Freddie had stuffed the banks with.

So you have Goldman, JP Morgan and Buffett/Wells Fargo picking up many nuked companies that were competitors for nothing. Lehman, Bear, Wachovia and the cronies latter got Indy Mac.

Here’s another point to ponder. The Mets were bought in the 80’s by a partnership of Nelson Doubleday and Fred Wilpon. In 2002, Wilpon suddenly bought out Doubleday. Everyone in NY was surprised by this...it happened very suddenly, and I wonder if Wilpon’s ties to Madoff, and I assume some ofthe Mets’ monies being invested with Madoff, led to the dissolution. I wonder if Doubleday had an idea all wasn’t kosher..

DOUBLDAY WANTED OUT Wilpon bought a one-percent stake in the Mets in 1980 when Charles Shipman Payson sold the team, with Doubleday & Co. holding the remaining interest. In 1986, Doubleday president Nelson Doubleday, Jr. sold off his company, and he and Wilpon each bought a 50 percent stake in the Mets to become full partners. In 2002, after a bitter feud, the Wilpon family purchased the remaining 50% of the Mets from Doubleday for $135 million.

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EXCERPT FROM ARTICLE: “Madoff was an investment vehicle that existed for Fred and the Mets organization,” one former Mets employee said.

.......the breadth and depth of investing w/ Madoff by the Wilpon and Katz families and their financial holdings, including the Mets, are remarkable. Picard’s lawsuit seeking hundreds of millions of dollars from the two, takes aim at roughly 100 accounts held by Wilpon, Katz, their families or business operations.

According to an analysis of Mr. Madoff’s 15,000 clients, more than 500 accounts can be tied to Wilpon and Katz. Wilpon had at least 17 accounts just under his name........

---substantial aspects of the Met’s financial operations seemed to flow through, or wind up with Madoff — annuities set up for players, cash generated by sponsorship deals, and more. The team regularly discussed investing deferred money from long-term player contracts in Madoff accounts. Bobby Bonilla was among the players who had their deferred money put with Mr. Madoff, one former employee said. In those cases, the players would agree to take less money up front and be paid over a number of years, earning interest.

The Wilons profited when the Mets kept any money earned over that agreed rate......When disability insurance costs piked, the Mets began to self insure....investing premiums with Madoff. Madoff continued to "produce" returns that outdid prevailing interest rates.

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CONCLUSION Collusion looms large here----appears the Wilpons and his BIL Katz were engaged in massive money-laundering and tax evasion---and were an unlicensed feeder fund to Madoff, suckering in a lot of people, including Mets players.

The Sandlers dumped their crap World Savings on a clueless Wachovia. Rahm and Gorelnick plus others knew the garbage Fannie And Freddie had stuffed the banks with. So you have Goldman, JP Morgan and Buffett/Wells Fargo picking up many nuked companies that were competitors for nothing. Lehman, Bear, Wachovia and the cronies latter got Indy Mac.

The money-hungry Sandlers invented the “Pick-A-Pay” mortgage-- borrowers paid less than interest due each month---which increased the total amount owed. While most legit mortages are paid down (and off) over time ---the Sandler's toxic mortgages increased over time. Analysts place the blame on the near-failure of Wachovia on the “Pick-A-Pay” garbage acquired from the Sandler’s firm----from which the toxic duo walked away with $2B.

SNL backed off satirizing them; CNBC mentioned “Pick-A-Pay” mortgages in "House of Cards"--the epic 2-hr documentary on the housing collapse----but protected the Sandler's identity.

The self-absorbed, left-loving Sandlers. Thanks to these two---we are stuck with:

ACLU
Moveon.org
ProPublica
America Votes
ACORN
Center for American Progress
Human Rights Watch

CAMPAIGN CONTRIBUTIONS:

Sandler, Marion O, SAN FRANCISCO, CA 94111 $2,300 08/30/2008 P OBAMA FOR AMERICA - Democrat

Sandler, Marion O, SAN FRANCISCO, CA 94111 $-2,300 08/30/2008 P OBAMA FOR AMERICA - Democrat

Sandler, Marion O, SAN FRANCISCO, CA 94111 $2,300 08/30/2008 P OBAMA FOR AMERICA - Democrat

Sandler, Marion O, SAN FRANCISCO, CA, 94111 $2,300 08/18/2008 G OBAMA FOR AMERICA - Democrat

Sandler, Marion, OAKLAND, CA 94612 World Savings & Loan Assoc./Executi $2,300 05/30/2007 P NANCY PELOSI FOR CONGRESS - Democrat

Sandler, Marion, OAKLAND, CA, 94612 World Savings & Loan Assoc./Executi $2,300 05/30/2007 G NANCY PELOSI FOR CONGRESS - Democrat

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GOOD READ

Inside the Head of a Bank CEO (Down The Rabbit Hole-Must Read)
Fox Business ^ | February 13, 2009 | Elizabeth MacDonald
FR Posted on Sunday, February 15, 2009 by khnyny

In covering the hearing of the nine bank chief executives on Capitol Hill, it didn’t take long for me to see that Wells Fargo CEO John Stumpf was having a hard time of it, valiant effort though he did make to defend his bank’s lending practices.

Because to look inside Wells Fargo, you will find the worst of the mortgage lenders housed in this bank, Wachovia, which Wells Fargo bought last fall for $15.4 bn, and housed within Wachovia is Golden West Financial, which Wachovia bought for a stupefying $25B, Golden West, the purveyor of some of the worst junk mortgages in the country. Wachovia Corp.’s disastrous $25.5B acquisition of Golden West Financial in May 2006, two months before the peak of the housing bubble (see blog “Dumb Bubble Deals”), is a portrait of the housing crisis in miniature.

At bottom you will find a revealing–and impenetrably absurd–transcript of a presentation given by Wachovia management defending the Golden West deal at an analyst-investor conference a week after Wachovia made this disastrous acquisition in May 2006. The transcript provides a roadmap for why this country is facing the worst housing and banking crisis since the Great Depression. And watch how obsequious Wall Street analysts behave, the smartest guys in the room who are supposed to catch the fire engine red flags. Kudos to footnoted.org for catching this one, the best footnote digging site in the country.

Golden West was a mom and pop shop that went berserk rubber stamping reckless loans for the worst of California’s borrowers, as the country’s biggest purveyor of the option ARM, which lets borrowers set which payments they want to make, in many cases, interest-only payments on no-doc loans. These ARMs are the worst of the lot... (Excerpt) Read more at emac.blogs.foxbusiness.com ...

Apparently, some "facts" in this NYT article may be inaccurate. Also, lawyers for Sterling Equities are more aggressive than many other "clawbacks" and came up with a monkey wrench defense:

From Lawyers: Sterling Defendants Don't Owe Madoff Trustee Money - CNBC, by Darren Rovell, 2011 February 03

Lawyers representing Sterling Equities, whose principals Fred Wilpon and Saul Katz also own the New York Mets, said Wednesday that the lawsuit that is being built against their clients by Madoff bankruptcy trustee Irving Picard is without merit.
The attorneys, David Caplan and Karen Wagner, from the law firm at Davis Polk & Wardwell, told CNBC that Wilpon and Katz knew nothing of Madoff's $65 billion scheme, as it has been alleged. Caplan and Wagner also say that more than 700,000 pages they turned over to Picard failed to show a connection. ..... < snip >
..... "The customer of the broker is not subject to clawbacks, even if the broker has engaged in fraud," Wagner said. "Since customers no longer hold physical securities, they rely on the broker to provide them with accurate account statements. The law is clear, even inside of bankruptcy, that the statement provided to the customer constitutes a legal obligation of the broker to pay that amount."
Wagner says that even if it turns out that the money isn't being really earned, as was the case in the Madoff Ponzi scheme, the customer is still owed the amount that the broker said the customer was due and has the right to withdraw whatever is reflected in the statement. Mets LLP, owned by the defendants, reportedly profited off its Madoff accounts. ..... < snip >
..... Other ponzi schemes have resulted in clawbacks, but Wagner said that they are argue that those ponzi schemes involved being an equity investor in a product. That wasn't the case here, they say, because Madoff was a registered broker and the account statements are legal obligations that the broker promises to the customer. ..... < snip >
..... A story by the New York Times that was published on Tuesday suggested that the Mets ownership sometimes put money that was owed to players in future years into Madoff's fund to grow until the deferred payments were due. That is inaccurate, a source close to the team, said. ..... < snip >

Lawyers representing Sterling Equities (the investing entity), whose principals, Fred Wilpon and his BIL Saul Katz, also own the Mets say Wilpon and Katz knew nothing of Madoff's $65B scheme, as has been alleged.

Mmmmmmm........typical lawyerly defense. The legal team is paid to deny, deny, deny.

Collusion looms large here----appears Wilpon and his BIL Katz were engaged in massive money-laundering and tax evasion---and were an unlicensed feeder fund to Madoff, suckering in a lot of people, including Mets players.

.......the breadth and depth of investing w/ Madoff by the Wilpon and Katz families, their financial holdings, including the Mets finances, are astounding.

Trustee Picard’s lawsuit seeking hundreds of millions of dollars from the two, takes aim at roughly 100 accounts held by Wilpon, Katz, their families or business operations. An outside auditor's analysis of Madoff’s 15,000 clients, found more than 500 accounts tied to Wilpon and Katz. Wilpon had at least 17 accounts under his name alone........

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EXCERPT FROM ARTICLE: “Madoff was an investment vehicle that existed for Fred Wilpon and the Mets organization,” one former Mets employee said.

---substantial aspects of the Met’s financial operations seemed to flow through, or wind up with Madoff — annuities set up for players, cash generated by sponsorship deals, and more. The team regularly discussed investing deferred money from long-term player contracts in Madoff accounts. Bobby Bonilla was among the players who had their deferred money put with Mr. Madoff, one former employee said. In those cases, the players would agree to take less money up front and be paid over a number of years, earning interest.

The Wilpons profited when the Mets kept any money earned over that agreed rate......When disability insurance costs piked, the Mets began to self insure....investing premiums with Madoff.

For his part, Madoff continued to "produce" returns that outdid prevailing interest rates........on paper.

NICE TAKE, FRANTZIE Chelsea Clinton grifted at a hedge fund. The pols all grift off Wall Street, banks and insurance companies. All the senators get a cut of the “skim.” Also explains why Bill and Hillary who did not even own a home in Ark, are now worth about $100 million.

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Bernie helped investors cheat on taxes with sham foundations and offshore accounts. You got that right. Bernie was running several simultaneous scams. Read on.

The trustee ID'ing his assets found Madoff used the time-tested Wall Street MO----creating a super-secret labyrinth of interrelated international funds, institutions and financial entities of almost unparalleled complexity and breadth......with assets and businesses in multiple places overseas that hid thievery, money laundering and tax evasion.

Keep in mind Bernie‘s large investors were savvy, astute successful business people, accustomed to constructing, picking apart and analyzing financial statements.

One investor was a stockbroker whose family invested with Bernie for generations---the family's patriarch founded the wildly successful Stop and Shop supermarket chain. Other investors gave Madoff $100-500 millions to "invest" for years and years.

"Philanthropist" Robert Jaffe of Palm Beach was one such node. Jaffe, 64, known for his vintage MG convertible, his consummate golf game and an heiress wife, was a fixture of the Palm Beach Country Club where many investors were recruited. Jaffe, who started out as a stock broker, is a vice president of Cohmad Securities, a firm co-owned by Madoff that helped attract investors to his fund. As a fixture of the Palm Beach and Boston social circuits, along with his wife, Ellen, Jaffe brought dozens of investors to Madoff. Among them was his father-in-law, Carl Shapiro, the clothing tycoon who launched Kay Windsor Inc., which he sold to Vanity Fair Corp. in 1971. Shapiro has said he lost more than $400 million personally.

At a party at The Mar-a-Lago country club, it was reported that Jerome Fisher, co-founder of Nine West shoes, confronted Jaffe, saying, “You’ve got a lot of nerve showing up here!” Earlier, the Jaffes stepped down as co-chairs of the annual fund-raising gala the Dana-Farber Cancer Institute holds every year in Florida. Robert Jaffe has also resigned from his post as chairman of Palm Healthcare Foundation, a West Palm Beach group that funds nonprofits. Through a spokesman, Jaffe said he “had absolutely no knowledge of the fraud, and like so many others is a victim of these tragic events.”

Another node is Jeffrey Tucker, the son of a Queens accountant who spent several years as an attorney for the Securities and Exchange Commission in the 1970s. Tucker met Madoff through his father-in-law, and then introduced him to his partners at the investment firm, Fairfield Greenwich Group, where he had gone to work in the late 1980s. In 1990, the firm introduced the Fairfield Sentry fund, which gave all of the money to Madoff to manage and charged clients a 1% management fee plus 20% of the fund’s profit.

Fairfield Greenwich was at least in part a family business like Madoff’s, and it helped extend Madoff’s reach to Latin America and Europe. The firm’s founder Walter Noel Jr., who maintained homes in Greenwich, Southampton and Palm Beach, employed several of his son-in-laws, including Andres Piedrahita. Piedrahita and his wife, Corina Noel Piedrahita, moved to London, then Madrid, becoming ambassadors for the fund among Europe’s wealthiest families.

The Journal reports that Piedrahita was wooing more investors just days before the alleged pyramid scheme collapsed. At the time Madoff was arrested, Fairfield Greenwich had $7.3 billion invested. In a statement posted on its website, the firm said it was a victim of fraud and was considering legal action to protect its clients.

Another node was Stanley Chais, a private investor from Beverly Hills whose investors were mostly from well-to-do Jewish families on the West Coast. Originally from the Bronx, Chais, 82, lived in Beverly Hills for many years before recently moving to Jerusalem about six months ago. Touting himself as a financial whiz kid, Chais boasted about his investment pool called The Arbitrage (later found to be unlicensed), which received returns of about 10 to 15 percent every year. Chais charged substantial fees - 4.5% of clients’ assets, according to paperwork given to news organs. Four of his investors told the Journal that they had never heard of Madoff until his arrest when they received a letter from Chais’ accountant, saying that all their money had been invested with Madoff.

“Mr. Chais was shocked to learn of what appears to be a Ponzi scheme of unprecedented proportions operated by Bernard Madoff, an individual whom he had known for decades,” Eugene Licker, a lawyer for Mr. Chais, said in a statement to the Journal. “If the allegations are true, Mr. Chais and his family, like others, have watched personal wealth evaporate overnight.”

Another node was Robert Schulman, 62, the recently retired chairman of Rye, N.Y.-based Tremont Group Holdings. During his 14 years running Tremont, Schulman is said to have boasted of his close relationship with Madoff, saying they were in contact on a weekly basis. Tremont also touted its track record of bringing investors “the industry’s most experienced and proven investment talent.”

Tremont attracted a wide range of investors, according to the Journal, including wealthy individuals who made their money selling businesses or who wanted a safe place for their children’s trust funds. It was also a conduit for professional money managers running funds that invested in other hedge funds. Investors in Tremont’s Rye Select Broad Market funds run by Madoff paid annual fees to Tremont of 1% to 1.75% of assets, according to 2008 marketing documents. In all, Tremont’s investors lost an estimated $3.3 billion with Madoff, the firm said.

THE MADOFF CONNECTIONS----INTERACTIVE AT WEB SITE

Madoff facilitator, Stanley Chais, Beverly Hills, operates the Chais Family Foundation and is a private investor, and like most of Madoff investors, from well-to-do Jewish families on the West Coast. Originally from the Bronx, Chais, 82, lived in Beverly Hills for many years before recently absconding to Israel.

Stanley Chais offers remarks at the Weizmann Institute of Science.

MADOFF FEEDER FUND Brighton Co Investments is headed by Stanley Chais, Beverly Hills, a "philanthropist" who served on "charitable" boards with Madoff. Chais (pronounced Chase) told the Jewish Journal of Los Angeles that he personally invested with Madoff but also "facilitated" others who wished to do likewise. However, spokesmen for the SEC and the California Dept of Corporations said they could find no record of Chais registering as an investment advisor or a broker.

Touting himself as a financial whiz kid, Chais boasted about his investment pool called The Arbitrage (later found to be unlicensed), which received returns of about 10 to 15 percent every year. Chais charged substantial fees - 4.5% of clients’ assets, according to paperwork given to news organs. Four of his investors told the Journal that they had never heard of Madoff until his arrest when they received a letter from Chais’ accountant, saying that all their money had been invested with Madoff.

“Mr. Chais was shocked to learn of what appears to be a Ponzi scheme of unprecedented proportions operated by Bernard Madoff, an individual whom he had known for decades,” Eugene Licker, a lawyer for Mr. Chais, said. “If the allegations are true, Mr. Chais and his family, like others, have watched personal wealth evaporate overnight.”

SOCIAL LINKS WHO "INVESTED" W/ MADOFF---interactive at web site.

There are lots of inaccuracies in the statements regarding Mets deferred compensation agreements and possible links to Madoff. I can address this on two levels - first, as a CFP, I have an excellent understanding of deferred comp, and more importantly, during the 80's and 90's several Mets senior executives were clients of mine, so I've seen and reviewed their existing deferred comp agreements.

In order to correct, we first have to understand the basics of deferred comp. It is a NON-QUALIFIED plan, as opposed to a pension plan..in that the participant has NO rights or protections under ERISA. Here's a simple example that explains it.. Say an executive earns a bonus of $5 million. If it's paid to him in a lump sum, and living in NYC, he'll pay about 50% in taxes to fed, state and city. He doesn't really need the money. He's age 60, looking to retire in 5 years, so he enters into an agreement with his employer to "defer" the pay out until age 65, at which time he will receive 5 equal payments of $1 million. The agreement may, or may not, stipulate that he will earn interest on the money at a specified rate, which would result in a larger payout. The employee is a general creditor of the employer, and may stand behind senior bondholders. If the employer goes belly up, the employee is stuck. Just recently, A-Rod was owed $250 mill by the group that owned the Texas Rangers. They filed for bankruptcy, and A-Rod was ultimately made whole, but he was at risk. The employer may, or may NOT decide to set aside funds now against the future obligation. The employer does NOT get a tax deduction for the funds set aside, unlike payments to a qualified pension plan..only when the $$ is actually paid to the employee.

As owners of a baseball team, where players salaries are the single biggest expense, deferred comp can be a very attractive management tool. If the player is willing to sign now, with substantial money deferred, then the team has far greater financial flexibility. And if they can somehow assume, or count on, extravigant rates of return via Madoff investment accounts, then that makes it much easier for ownership.

Taking the earlier example, let's assume that management wanted to fully fund the deferred comp agreement, now, and that they could earn 5% in a T-bond, if they set aside today (this is using round numbers) about $3.7 mill, then in 5 years they would be able to withdraw $1 mill for the next 5 years and send it to the player. However, suppose that they "knew" that they would earn, say 30% on their money each year via Madoff, well, then, the amount they would have to set aside today would be about $1.2 million, and the agreement is fully funded.

That's a HUGE difference, and it could explain why the Mets were willing to enter into several player contracts that at the time seemd to make NO financial sense whatsoever..

Many thanks for the expert analysis. That all makes sense.......when all the principals are honest. You have to factor in that the Wilpons were shady----and knowledgeable about Ponzi schemes, having been nailed once before.

They were obviously in collusion with Madoff.

From all we know now, the Wilpons clearly had insider deals that their players who were offered deferred deals were completely unaware of. The players might rightly conclude that they were deceived by the Wilpons.

ARTICLE EXCERPT Picard’s lawsuit seeking hundreds of millions of dollars from the two, takes aim at roughly 100 accounts held by Wilpon, Katz, their families or business operations. According to an analysis of Mr. Madoff’s 15,000 clients, more than 500 accounts can be tied to Wilpon and Katz. Wilpon had at least 17 accounts just under his name........

"Madoff was an investment vehicle that existed for Fred and the Mets organization,” one former Mets employee said. .......the breadth and depth of investing w/ Madoff by the Wilpon and Katz families and their financial holdings, including the Mets, are remarkable.