Thank goodness that the library offers free ineternet access

So we can continue to hear from Walter Noel after he and Monica remove themselves from the Round Hill cottage and move to a cardboard box in Baldwin Park. News today that thea Madoff trustee has sued a second feeder fund, former GMAC Chairman Ezra Merkin, for $558 million in fees he took out when he “knew or should have known” that Bernie was a fraud. At the rate of one feeder fund every other day, I’d expect Walter and the Fairfield Greenwich Group to be teed up Monday or Wednesday, depending on whether that Rye firm (Trenton? How quickly we forget) goes first.

As trustee, Mr. Picard can sue investors for any money withdrawn from Mr. Madoff’s firm “in bad faith,” including if they knew or should have known Mr. Madoff was engaged in fraud. Mr. Picard is relying on records he collected from the Madoff firm going back to 1995 and, for now, will be able to seek funds withdrawn only in that period.

Mr. Picard, an attorney with Baker & Hostetler LLP, is expected to sue more feeder funds, said lawyers involved in the Madoff bankruptcy case. But even if he wins in court, Mr. Picard may have trouble collecting much of what he is seeking. That’s because most of the money has already been distributed to the funds’ clients [unless, like Walt, you were pulling out $270 million a year for yourself - Ed].  If those clients had no inkling there was fraud, Mr. Picard won’t be able to touch funds they withdrew from their accounts, those lawyers said.

In his first suit alleging bad-faith withdrawals, Mr. Picard targeted the assets of another individual who ran a feeder fund, Stanley Chais. The suit seeks the return of $1 billion that Mr. Chais and his family withdrew from Mr. Madoff’s firm since 1995. Mr. Chais allegedly “knew or should have known” of the fraud because his family’s personal investment accounts with Mr. Madoff averaged annual returns of 40%, in some cases reaping 300% in one year, according to the complaint.

Mr. Merkin’s investments differ from those of Mr. Chais. The returns for Mr. Merkin’s funds averaged 11% to 16% annually. And, unlike Mr. Chais, Mr. Merkin didn’t have personal accounts with Mr. Madoff’s firm. Instead, Mr. Merkin collected a management fee.

In Thursday’s lawsuit against Mr. Merkin, Mr. Picard said that as a sophisticated fund manager, Mr. Merkin should have noticed the myriad warning signs that could have indicated Mr. Madoff was engaged in fraud. Among the clues: Purported trades made by Mr. Madoff, which were listed in account statements sent to Mr. Merkin, could never have taken place, a fact that Mr. Merkin could easily have detected, the suit alleges.

6 Comments

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6 responses to “Thank goodness that the library offers free ineternet access

  1. Picard

    Drats, the money hunt continues.

    http://www.bakerlaw.com/irvinghpicard/

  2. Chances

    Hey, CF, what are the chances Noel & Co will beat this whole wrap? Look forward to your reply.

    • christopherfountain

      Nil. They’ll be bled out by legal fees and the class actions and Madoff trusteesuit will grab what’s left. Maybe no criminal charges but the civil suits will bankrupt them

  3. Bitter end

    You have to ask yourself Noel, do you feel lucky? Well, do you punk.

    My bet is that family will fight to the bitter end.

    Where else could you get a gig for years like Madoff’s that had that kind of payout.

    Fight and then leave. Probably will take years to resolve. Who couldn’t live off the million dollar crumbs the Noel group will still have.

    Does the Judge look for assets with a fine tooth comb or a meat cleaver? Will they have anything left? Look forward to a reply.

  4. cynic1

    AND … will the swiss give them up ….esp since Monica’s brother is/was a big muckity-muck in private banking for one of the big swiss banks, ran Latin America for them if I recall. Perfect, isnt it !

  5. douglASS

    AND…will Robert Sr. or his son ever give up the Noel secrets?…Feds should go after employee Andrew DouglASS until he spills the beans about Noel money hidden in Luxembourg or greater Europe.