Uh oh – a whiff of tax fraud for FGG?

The feds are sniffing out Madoff’s offshore accounts but here’s the bit that might just warm Walt and Monica’s champagne this evening:

Investigators are especially interested in whether Madoff and some of his investors used funds based in offshore tax havens to evade American taxes, the paper said, citing a person who was briefed on the investigation and remained anonymous. 

The paper said, according to the person, the likelihood of charities improperly allowing their donors to shift money offshore and foreign banks withholding American taxes on Madoff accounts were also being scrutinized. 

Regulatory filings indicate the involvement of at least a dozen offshore entities with Madoff’s firm, the paper said.

According to the paper these include funds linked to the Fairfield Greenwich Group, which lost $7.4 billion of its investors’ money to Madoff, Tremont Group Holdings, which had $3.3 billion invested, and several Swiss banks.

On Wall Street, you can usually impoverish little old ladies without incurring much more than a severe frown and perhaps a wrist tap from the regulators but cheating the IRS? I wonder whether orange is Walt’s color?

Update: from the NYT

Fairfield Greenwich operates affiliates in offshore havens like the Cayman Islands. At another affiliate, in Bermuda, Amit Vijayvergiya, Fairfield Greenwich’s chief risk officer, managed flows into Sentry, its largest fund that was a main recipient of money that had been invested with Mr. Madoff. It also runs Fairfield Sentry in Ireland, one of Europe’s largest offshore havens, and a joint venture in Singapore, a leading Asian haven, called Lion Fairfield Capital Management.


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6 responses to “Uh oh – a whiff of tax fraud for FGG?

  1. CEA

    These firms are all such liars. Remember Sandra Mantzke? She founded Tremont, then went on to found MAXAM – which was supposed to be “seeking to provide a new approach” (their words), and offer “women and minority-owned funds”. Really? and then 100% of their money is with Madoff.

    They came into a firm I worked for one day (being a woman and all) and raked us over the coals – our investment methodology, our back office procedures, it was insane. And guess what?

    ONE HUNDRED PERCENT (that’s 100%) of their money was allocated to Madoff, a white man. So all these fund-of-funds people are full of BS, overcompensating for their lax due diligence of Bernie by putting smaller firms through the Wall St. equivalent of the Nuremberg Trials.

    If they practiced what they preached and were honest, they would not now be the full-time employment act for the legal profession.

    Between these guys, and the Noels, it is embarrassing to be in finance, and from Greenwich. I am both now, and it is painful to have to admit. It is like being in a singles bar with your Valtrex prescription pasted to your forehead.

  2. anonymous

    Does anybody have the FGG list of clients/ victims? I’ve seen Blodget’s list of Madoff victims, but I think that would be really interesting especially if there were any local individuals (Greenwich, NY, Southampton)

    Also interesting if it was just European Institutions, I just haven’t seen a comprehensive list if there is one. Just curious…

    • christopherfountain

      The Brazilians aren’t talking because, as pointed out by the WSJ, they don’t necessarily want the taxman to know that they had disposable income to lose. Same with Italians, Spaniards and other countries where the tax laws are loose and Walt’s son-in-laws plied their trade. Then you have Americans who probably don’t want to come forward, either for the same reason as their Brazilian friends or sheer embarrasment – Henry Kaufmann admitted yesterday that he’d lost $2 million but hastened to assure us that that represented “just a tiny portion of my total wealth” – good – I can sleep tonight.
      So eventually we’ll see more names but for now, the list is very much incomplete. If you noticed, even Kevin Bacon lost money here and if you’re a fan of the Kevin Bacon degrees of separation game, you’ll know that half your acquaintences were snookered. My suggestion: go out to Round Hill Club this spring and see who tees off with Walter. Those will be the only ones who didn’t invest with the man.

  3. anonymous

    Got it. Funny, my husband said almost exactly the same thing. By the way, it’s Henry Blodget with one “t” in his case. Usually Blodgett is spelled with two “t”s but not in his case. Don’t mean to be a pain or anything because I think you’re so wonderful. Obviously, please don’t post this.

  4. christopherfountain

    Oops! Posted anyway. But thanks for the correction. I fixed one post and will spell Bloget correctly going forward, I hope.

  5. christopherfountain