Between suggestions I run for Congress (sleep well – ain’t gonna happen), accept ads (see previous comment) and go for a 100,000 daily readership log from my present 10,000, the latter sounds like the most fun. So here you go:
Tag Archives: Mark Madoff
Greenwich police probe burglary hits near Mark Madoff’s home on 21 Cherry Valley Road. Probe indeed. Just sayin’ ….
It won’t provide much financial relief for the scam victims but these guys kept the game going for at least fifteen years and should have tales to tell. Will this bring down the boys? Want a house on Tomac? Cherry Valley?
Markie Madoff cracks under stress, storms away from his apartment on a Vespa. Has anyone seen him at his Cherry Valley house recently? Where’s Scusie when we need her?
Maybe, although each Greenwich home, Andy’s at 57 Tomac, Mark’s at 21 Cherry Valley Road (or vice versa – does it matter?) is attached to the tune of $2.5 million already so probably can’t move readily. In any event, Irving Picard, Trustee of Papa Madoff’s bankruptcy, is going to sue the boys and their uncle and their cousin for $200 million. Picard sounded positively gleeful that his suit might drive the Madoffs into bankruptcy and, interestingly, also opined that there are “millions” stashed away just waiting to be discovered. I’ll volunteer to go to Mustiqe and look there, assuming Irv will front my expenses.
While you lick your chops and wait for Walter Noel’s cottage at 175 Round Hill Road to go on the sheriff’s auction block, you might want to start considering living at 21 Cherry Valley Road or 57 Tomac Avenue, the locations of Bernie Madoff’s kid’s weekend homes. (Ex-wife Susan has the best place, actually, in Lucas Point, but I think she grabbed the divorce proceeds in cash and got away long before the fraud was exposed. I don’t think she can – or should – be touched). Madoff’s bankruptcy trustee Irving Picard has just announced that he’s going after the boys (he’s already got his teeth buried in Walt’s shank). First up for examination is the Nantucket house that either Andy or Mark bought in the spring of 2008 with Madoff funds, but while Nantucket’s a fine place to visit, surely Picard’s ears will prick when he hears, “Greenwich real estate”.
The feds are supposedly closing in on the Madoff boys, Andy and Mark, and may indict them after Labor Day (even prosecutors like to take the last two weeks of August off). Real estate mavens may want to start focusing on the boys’ Greenwich homes on Cherry Valley and Tomac, liens and all, but I’m thinking that Andy’s girlfriend Catherine Hooper may finally be ready to dump the fellow – fishing sucks in Ossining, from what I hear.
With Bernie put away for good and Ruthie out on the street (without her fur coat) prosecutors are turning their attention to the feeder funds that made so much off of Bernie while their clients earned so little. Today it’s former penny-stock fraudster Sonja Kohn and her Austrian operation with the deceiving name of Bank Medici (Kohn is no Medici and barely a banker), but the allegations: $20 million payments for “research” and still more payments for funneling investors into the Madoff maw sounds like what might turn up during an investigation of Fairfield Greenwich Group. I have every hope that that investigation is proceeding as I write this.
As for the remnants of the Madoff family, a source tells me that he spoke with one of the boys and the two of them are convinced their lives are over and they’re facing a life of destitution. For what it’s worth, this source believes the boys were just doofs who play acted at running Daddy’s business and never learned or even questioned how it was that they could get so rich when their company turned no profits. Oh well, that’s too bad, but I’ll reserve my sympathy for more deserving victims.
Here’s what prosecutors are looking at in Austria:
U.S., U.K. and Austrian prosecutors are investigating a former Austrian fund manager they believe was paid more than $40 million in kickbacks to funnel billions of dollars of investments to Bernard Madoff.
Prosecutors from all three investigations believe Mr. Madoff paid kickbacks to Sonja Kohn while she was chairwoman of Austria’s Bank Medici AG via separate companies she controlled, according to affidavits detailing the investigations and hundreds of documents collected by Austrian prosecutors that were reviewed by The Wall Street Journal.In exchange for the kickbacks, prosecutors allege, Ms. Kohn turned three Bank Medici funds into “feeder funds” that supplied Mr. Madoff with an estimated $3.5 billion from European investorsThe three investigations, which are separate and at an early stage, offer a picture of how Mr. Madoff may have persuaded fund managers abroad to find investors for Mr. Madoff. The investigations don’t claim that Ms. Kohn knew the nature of Mr. Madoff’s $65 billion Ponzi scheme.
“I am actually the greatest Madoff victim. It is a tragedy for my family, my company and for me personally,” Ms. Kohn said by phone on Wednesday. She declined to discuss details of the allegations against her.
Ms. Kohn, a 60-year-old Viennese former Wall Street penny-stock broker, has repeatedly denied prior knowledge of Mr. Madoff’s $65 billion fraud or any wrongdoing. A judge sentenced Mr. Madoff to 150 years in prison on Monday.
According to an April affidavit from the Justice Department filed with Vienna prosecutors, Ms. Kohn is under investigation in the U.S. for potential criminal charges of conspiracy, fraud and wire fraud in connection with the alleged kickbacks.
Regulators have filed civil, but not criminal, charges against several fund managers who steered their clients’ money to the Madoff firm.
Two streams of alleged payments are under investigation. Early this year, U.S. investigators noticed a flow of payments totaling about $32 million over 10 years from Mr. Madoff’s advisory firm, Bernard L. Madoff Investment Securities LLC, to Infovaleur Inc., a New York company that was “owned by Sonja Kohn personally,” according to a U.S. affidavit filed on April 6.
The U.S. affidavit said U.S. prosecutors were unable to locate a registration for Infovaleur Inc.
“It does not appear that Kohn, or Bank Medici, ever disclosed to investors in the feeder fund that Kohn was personally receiving payments from Madoff at the same time as she was investing the feeder funds with [Mr. Madoff's fund],” the affidavit says. Mr. Madoff was “actually in full control” of Bank Medici’s investments, according to the affidavit.
Prospectuses for the Bank Medici funds that Ms. Kohn oversaw claimed they were investing in a basket of 35 to 50 Standard & Poor’s 100-stock index shares, as well as in U.S. Treasurys, the affidavit says.
The prospectuses didn’t mention Mr. Madoff or his company, when in fact all of the funds’ money was being forwarded to Mr. Madoff, the affidavits say.
Meanwhile, Grant Thornton U.K. LLP, the accounting firm liquidating Mr. Madoff’s London-based unit, Madoff Securities International Ltd., discovered a bank receipt that triggered a U.K. investigation, according to a March 24 affidavit filed with Austrian prosecutors by the Serious Fraud Office, a U.K. government agency responsible for prosecuting complex fraud cases.
The bank receipt referenced a check that Madoff International paid to a company called Erko Inc. and which was deposited in a Vienna bank account, according to the U.K. affidavit.
The affidavit said the Serious Fraud Office had determined that both Erko and the bank account were controlled by Ms. Kohn. The fraud office also said in the affidavit it was unable to locate a registration for Erko.
The U.K. affidavit alleges that Mr. Madoff’s London subsidiary paid about £7 million ($11.5 million) over five years to Erko. A British prosecutor alleges in the document that Mr. Madoff attempted to hide payments to Ms. Kohn by “falsely” declaring them in his company accounts as payment for research reports.
“It is suspected that the research papers were completely worthless and that the reports were never in fact used by [Madoff Securities International] for business decisions,” the affidavit said.
The Serious Fraud Office is investigating Ms. Kohn in connection with potential criminal charges of money laundering and falsifying documents to receive kickbacks, according to the affidavit.
U.S. prosecutors say Mr. Madoff depended on feeder funds run by investment advisers such as Ms. Kohn to recruit the large numbers of new investors needed to sustain the fraud.
The general supposition among Madoff scandal fans has been that Mark and Andy, Bernie Madoff’s sons, were too busy fishing and playing kissy kissy with beautiful women to trouble their dura matter with deep questions like the meaning of life or the source of dad’s money. Now two ex-Madoff traders have sued the kids, alleging that they were in on the scam. Truth or fiction? We don’t know, but the fact that they’ve signed up Ric Bourke and Walter Noel as character witnesses suggests that their homes on Tomac and Cherry Valley may soon be on the market.
The Daily Beast reports that Madoff friends and family members withdrew $735 million from Madoff Investments in the 90 days before the Ponzi fellow confessed all, leading that trustee, Irving Picard, to suspect that Bernie wasn’t the only person who knew about the fraud. So he’s sent out claw back letters to those active customers.
The timing of those withdrawals prompted Irving Picard, the bankruptcy trustee, to send “clawback letters” in mid-April to 223 people among the more than 8,000 investors who had accounts with Madoff. What this shows is that the bankruptcy trustee is not randomly trying to recover money from every Madoff investor—he’s looking for people who may be culpable.
“If you were a close relative of Bernie or Ruth, you got a letter,” said David Sheehan, who is a leader of Picard’s legal team at Baker, Hostetler.
In an exclusive joint interview with The Daily Beast, Sheehan and Picard explained that the clawback letters asked for a return of the cash and an explanation of why the withdrawals occurred. “People who got the letter are in one way or another” related to people somehow linked to Madoff’s investment advisory service, said Sheehan.
The rapid pace of withdrawals in the three months prior to Madoff’s arrest Dec. 11, 2008, “raised our level of concern that the monies were paid purposefully,” said Sheehan.
Well yes, I guess it would. Then, for Walter fans, there’s this:
Picard and Sheehan also said they expect to file more lawsuits this week seeking recovery of hundreds of millions of dollars from some of the major money managers who had billions of dollars invested with Madoff. The bankruptcy trustee is clearly not buying the argument that the money managers are victims, too.
Among those in Picard’s sights, but not yet sued: the Fairfield Greenwich group, which lost $7.5 billion with Madoff; Tremont Group Holdings, which dropped more than $3 billion; and Maxam Capital, a $280 million loser.
He passed out investors’ money to all his family and spent most of it on himself. No sign yet of the Madoff boys’ houses on Tomac or Cherry Valley being put up for sale, but my guess is that they’ll be just behind Walt’s Round Hill cottage. Maybe a “Madoff real estate tour” should be organized for this fall?
Mr. Madoff listed family members, boat captains, housekeepers and others as employees of Bernard L. Madoff Investment Securities, even though they never actually worked for the firm, newly released documents show. Mr. Madoff also used his firm’s money to pay for real estate, yachts, private planes and country club memberships, according to court filings by the trustee charged with liquidating the Madoff firm and recovering money for victims of Mr. Madoff’s multibillion-dollar Ponzi scheme.
The documents back up a previous assertion by lawyers for the trustee, Irving H. Picard, that Mr. Madoff used his business as a personal “piggy bank.”
In January, Mr. Madoff, his wife, Ruth, and other family members spent more than $100,000 on his firm’s American Express Corporate Card. Among the charges were $1,564 at Bistro Chez Jean-Pierre in Palm Beach, Fla.; $2,000 at Georgio Armani in Paris; and $2,813 at the Apple computer store in New York.
Mr. Madoff, the mastermind of the world’s biggest Ponzi scheme, doled out more than $7 million to various companies owned by his wife, Ruth, his two sons and his niece Shana. Peter Madoff’s wife, Marion, was paid a salary of $163,500 by the Madoff firm last year, even though investigators found no evidence that she actually worked there.
Mr. Madoff also paid out $471,000 to a marina in Long Island and nearly $1 million to a number of exclusive country clubs including the Breakers, the Atlantic Country Club on Long Island, the Palm Beach Country Club and the Trump International Golf Club.
If the IRS never audited this guy, who were they auditing? Just asking.
Never rely on newspaper reporters to get court dockets right – use the judicial system’s web site, instead. Checking that site, I’ve learned that there will not be a hearing today on the defendants’ motion to dissolve the liens filed against Walter and the Madoff boys’ property in Greenwich. Well darn – I was looking forward to watching the action and reporting on it here. If it doesn’t go forward soon, I’ll just make something up. But for now, we wait.
Manhattan co-op prices drop 22%, volume down 48%. Just when these poor kids need every dime they have to pay lawyers fees, fines and disgruntled victims, here comes the mean old real estate market to drive them further underwater. Jesus weeps.
Attorney David Golub, representing the town of Fairfield as it seeks to recover the millions it lost with Madoff feeder fund Maxam of Darien (yes, the fund that was run by a women to “empower women and minorities” turned out to have sunk every penny entrusted to it with Bernie – it closed the day Bernie was arrested), has persuaded a judge to grant a temporary restraining order freezing all the Madoff players’ assets until a full hearing on April 13th.
The restraining order granted by the judge is a “who’s who” of players in the Madoff scandal: Madoff, his wife Ruth, brother Peter, and son-in-law Andres Piedrahita; sons Andrew and Mark Madoff and Walter M. Noel Jr., a partner in the Fairfield Greenwich Group, all of whom live in Greenwich; Sandra L. Manzke, the founder of Maxam Capital; Robert I. Schulman, the former chairman of Tremont Group Holdings; and Jeffrey H. Tucker, the co-founder of the Fairfield Greenwich Group.
The restraining order prevents not only the sale of any real estate owned by any of the defendants, but also extends to all accounts at any financial institution and all personal property. That includes, but is not limited to, stock certificates or certificated securities and “any other assets in any of the defendants’ possession, custody or control,” according to court documents.
The motion, filed by David Golub, a lawyer hired by the town for the Madoff case, states there is probable cause the town’s pension programs could receive a $75 million judgment and seeks to secure that sum by attaching Andrew Madoff’s home at 57 Tomac Ave., Mark Madoff’s home at 21 Cherry Valley Road, and Noel’s at 175 Round Hill Road home, all in Greenwich, as well as garnish all of the defendants’ accounts at financial institutions.”There is a reasonable likelihood that the defendants Andrew H. Madoff, Mark D. Madoff and Walter M. Noel Jr. are about to remove themselves or their property from this state, or are about to fraudulently dispose of or have fraudulently disposed of their property, with intent to hinder, delay or defraud their creditors,” the motion states.
I think highly of David Golub and I wish him luck in chasing down everyone who profited from Bernie Madoff’s fraud but in this instance, I don’t see how he reaches the Noel’s property. The town didn’t have any direct dealings with FGG, at least none are reported in the article, so it’s stuck with the rather weak argument that FGG and its partners were an integral part of the fraud and made it all possible. Maybe so, but freezing assets on so tenuous a claim seems a bit dubious. Still Connecticut’s judges, perhaps harkening back to the days when they passed out these ex parte orders like candy bars, still grant them with far more alacrity than judges in other states, and God bless them: it makes suing people so much more fun. And notice,by the way, that the judge granted the full $75 million invested. Fairfield invested $22 million, watched it “grow” to a phony $41 million and still got a $75 million attachment, no doubt to cover Goleb’s fees. I do like judges who protect litigators!
Bernie Madoff is unlikely to contest this order on April 13th – why should he care? – but Walt’s lawyers, Andres’ and Mark and Andy Madoff’s should all be in Bridgeport Superior Court that day. I may go up myself just to watch the fun.
Boies tried and failed to persuade a judge to freeze Walter Noels assets, leaving our Greenwich hero and his charming wife Monica free to redistribute their wealth in more hospitable climes. A Brooklyn law student had better luck today and convinced a judge to freeze Peter Madoff’s assets. Maybe Boies can bring this kid on staff and try again, this time going after Mark and Andy’s loot, if, that is, they left anything to grab after having free rein with Dad’s jet all these months. My guess? Bernie didn’t raise no dummies.
Lucinda Franks has an interesting interview with an ex-Madoff employee, up today on The Daily Beast. Creepy company, in many odd ways. But Bernie paid them huge salaries while the legitimate business lost money and no one wanted to leave such a sugar daddy. The most interesting question for the future is how much Mark and Andy Madoff knew. If their trading firm never made enough profit to pay them such huge salaries, how did they think they were getting paid? The employee Franks interviews says they all wondered how Bernie could be making 8-12% while they were lucky to be cranking out 3-4%. Wondered, but never asked. Were the boys onto the scam? This man thinks so:
Ruth was the firm’s bookkeeper: “But I only saw her walk through once or twice,” Some friends of the employee, in hindsight, have said that Andrew and Mark must have known or suspected that things were not kosher. “They were educated guys, one of them had gone to Wharton, I think. They saw the balance sheets. We were making no money, some years losing it, and the brothers, I heard, were getting $4 million annually. That just didn’t track.”
“But I don’t want to believe that they knew or were involved,” the employee said. “I believe they’re innocent. They were really nice guys, they looked very straight. They treated me well even though as a computer programmer, I didn’t command the respect the hotshot traders did. When I told them I wanted to leave, Andrew tried to persuade me to stay and when I declined, he let me work only four days a week so I could start up my computer business.
I hope Franks will divert some of her investigative energies into Walter Noel’s operations. The woman is a talented writer (well, that might explain her Pulitzer prize) and is great at digging. Maybe if I promise her a gold-plated shovel she’ll come out to Round Hill and ask around.
My favorite bit from the interview?
“We all joked that the motto of the place was that ‘it was good to work for Bernie.”
You bet. Tough luck if you invested with him, too.
No mention of their Greenwich homes but the feds are looking for at least $31 million from the boys, an amount loaned to them by papa to buy houses in NYC and Nantucket. Cherry Valley and Tomac Avenue next?
And, bye the bye, spoke with someone today who knows the Noel family quite well. Walter does not have Alzheimer’s, according to this source. Of interest is that the son in law, Andres Piedrahita, was long rumored within the family to be laundering money for his Colombian friends. He “was forced to leave Greenwich” in 1997, fled to England where something else happened to cause him to pull up stakes and flee again, this time to Spain. Anyone have details on these sudden departures?
Walter, this person says, is a harmless straight arrow, known to say such harsh things as “golly gee, Monica” when perturbed. You can believe it or not, but this story is that the guy was on the straight and narrow until son-in-law Andres insisted, based on the money he was pulling into the fund, on being made a partner at Fairfield Greenwich Group. It was downhill from there. Andres, not from wealth originally, suddenly had Bentleys, jets and mansions. Of course, Walter didn’t seem to be doing so badly either, until December 12th.
Update: as I was writing this, Guest of a Guest was sending me a link to its own article on Andres’ father. Not a nice guy, apparently.
The NY Post reports that brokers have been asked by the trustee overseeing the unwinding of all affairs Madoff has asked for price opinions on the penthouse in preparation for its sale. Bernie wil have to have a place to stay while awaiting trial if he’s evicted from the apartment however – could he be coming to Andy’s place at 20 Cherry Valley? Or Mark’s place n Tomac Avenue in OG? That would be fun.
I have no news on any impending sale of Walt’s and Monica’s digs. To my surprise and disappointment, I have not been asked up for a tour and to give a price opinion. But the year is young.
Surprise! Feeder funds fed Madoff because they thought he was front running. As I’ve suggested before, if you’re participating in a fraud, make certain you know who the victim is.
New York-based Fairfield Greenwich, which was founded by Walter Noel in 1983 and named after the county and city where he lives, was an international money machine. Its Fairfield Sentry Ltd. fund channeled all of its $7.3 billion in assets to Madoff, taking a cut of 1 percent of the total and 20 percent of the gains each year.
Noel, who declined to comment, built his global business in part on marriage. Three of his five daughters — who were profiled in a 2002 Vanity Fair piece titled “Golden in Greenwich” –married husbands who took Fairfield Greenwich’s business to far-flung lands.
One husband, Yanko Della Schiava, based in Lugano, Switzerland, was responsible for selling Fairfield’s offshore funds in Southern Europe, according to the firm’s Web site.
Another, Colombian-born Andres Piedrahita, led the European and Latin American businesses, working out of London and Madrid.
The third, Philip Toub, son of Swiss shipping magnate Said Toub, marketed the group’s funds in Brazil and the Middle East.
A fourth son-in-law, Matthew Brown, worked for the firm in New York.
For Madoff, the feeder funds weren’t only a way to gather money. They also enabled him to distance himself from individual investors. He didn’t like to socialize or hustle or answer questions, friends say.
The feeders were the gatekeepers, and they qualified for royal treatment. A money manager for a family office recalls accompanying Sonja Kohn, whose Vienna-based Bank Medici AG funneled $3.2 billion to Madoff, to a meeting with Madoff in New York in 1991.
He says Madoff treated her as if she were the Queen of England. The money manager also says Madoff wouldn’t answer any questions about his strategy.
A delegation from Credit Suisse Group AG, led by Oswald Gruebel, then head of private banking, had a similar experience in 2000. Gruebel, whose bank had about $500 million invested in Madoff funds at the time, wanted to know why the firm had an obscure auditor, why Madoff didn’t have a third-party custodian hold his clients’ assets and how much money he was running.
After the fifth or sixth query, people who were at the meeting say, Madoff ended the session.
“You guys, if you are not happy with the returns you are getting,” he said, “you can take your money.”
Gruebel, 65, who retired as chief executive officer of Credit Suisse in 2007, urged clients to withdraw from Madoff’s funds, according to three people familiar with the matter.
Only about half of the money was taken out, the people say, indicating that many clients preferred Madoff’s returns to Gruebel’s advice.
That’s why it’s hard to weep for some of Madoff’s victims, says James Walsh, author of You Can’t Cheat an Honest Man (Silver Lake, 1998), a study of Ponzi-scheme perpetrators and victims.
“We’ve become a nation of investors, but nobody wants to do the work of applying Benjamin Graham’s analysis tools,” Walsh says, referring to the father of value investing. “They want a genius to give them a shortcut. That’s what made it a target-rich environment for Madoff.”