Daily Archives: May 11, 2009

Did you get a letter from Irving? You’re in trouble

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.


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The haves and the don’t haves

I linked to a WSJ column awhile ago in which the author, clearly a man after my own heart, discussed house listings as being divided by the “have to sells” and the “don’t have to sells”, and how that affected their respective pricing decisions. Today a house on Oneida Drive that was originally listed in January for $7 million was dropped to $5. And also today, 5 Lindsay Drive, land, was renewed at $4.950 million, where it has been, unsold, for the past year. One of those houses is owned by a serious seller, the other by someone indulging in a Zillow “make me move” fantasy. I won’t be bothering the owner of the latter.

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Testing the waters

120 Field Point Circle sold as land for $9.5 million back in 2000 or thereabouts. The buyers built a 10,000 square foot house on the place and listed it today with David Ogilvy for $35,000,000. That’s an attention-getting price; will they get it? It’s direct waterfront with fabulous views from the priciest neighborhood in town so if anything will command a huge price in this market, this one should. My guess is, just as I have buyers with several million dollars available to buy in Greenwich, there are even bigger fish out there with the wherewithal to grab this place. It will be fascinating to see what happens.


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Another spec job shuffles off to renters’ hell

56 Milbank, one of two new condos that haven’t sold, was rented today for $14,000, down from its first price of $20,000. I wish the builder well in hanging on and waiting for a better market but I doubt $14,000 will cover his expenses.


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Is there anyone in Greenwich who’s still sane and not under indictment?

Stay away from me with that purse, Peter. Peter!

Stay away from me with that purse, Peter. Peter!

Round Hill Road resident and Walt Noel neighbor Frederic Bourke feared that his business partner Peter Doone was trying to “inject him with harmful substances”.

May 9 (Bloomberg) — Jurors may be told that Frederic Bourke, the co-founder of handbag maker Dooney & Bourke who faces international bribery charges, believed business partner Peter Dooney was secretly injecting him with a “harmful substance.”.

Bourke goes on trial June 1 in New York federal court on charges that he helped Czech expatriate Viktor Kozeny pay bribes to government leaders in Azerbaijan in 1998 in a failed bid to take over the former Soviet republic’s state oil company.

Assistant U.S. Attorney Harry Chernoff said in court papers on May 7 that proof of Bourke’s “fears” may be relevant at the trial and that he may offer evidence that Bourke believed Dooney’s “agents” were “secretly injecting” him with “a harmful substance.” He also wants to show that Bourke and Kozeny “obtained the services of two prostitutes” while they were scouting for investments, demonstrating “the close relationship” between Bourke and Kozeny, Chernoff wrote.

U.S. prosecutors in 2005 said Kozeny, who had a home in Colorado, paid millions of dollars in bribes to Azeri leaders in attempt to buy a controlling stake in the state oil company in Azerbaijan, known as Socar. Bourke, one of Kozeny’s American investors, is alleged to have conspired with the Czech in violation of the Federal Corrupt Practices Act, the U.S. anti- bribery law, prosecutors said.

Kozeny now lives in the Bahamas and has successfully fought extradition to the U.S. in the case. Kozeny is also wanted by authorities in the Czech Republic, where he’s accused of stripping Czech companies of $1.1 billion.

Bourke invested $8 million with Kozeny. Other investors included hedge fund Omega Advisors Inc. and American International Group Inc., which haven’t been accused of wrongdoing. Dooney was not an investor in the deal.

Dooney laughed when told of Bourke’s alleged fear.

“I haven’t seen the guy in years and years,” Dooney said in an interview yesterday. “No secret injections. Categorically denied.”

Well of course, he would say that, wouldn’t he?


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Going down?

Roger that

Roger that

This house on Roger Drive (off Baldwin Farms) sold new in November 2002 for $4.595 million. The new owner marked it up and put it back on the market and after several price cuts, sold if for $5 million in 2005. It’s back on today for $4.995 which may be a tad overpriced for a Mariani building, but it’s refreshing to see a seller who isn’t pretending that the past year hasn’t happened.

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Why doesn’t Dido Dent wear a zipper on his kilt?

Dent family calesthenics

Dent family calisthenics

It frightens the beavers, of course. Dido’s off to Scotland, where beavers are returning after 400 years. “If they’re back, then the Dents are too,” the Harvard grad declared over several single malts at Augie’s. “We were driven out of our foggy homeland in 1736 for certain unspeakable acts committed by great great gran papere, but surely all is forgiven by now. Besides, I’m suddenly finding the heat here in Greenwich quite unbearable.”


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Dented dignity

Ah, this is better. After a few hours of lag time, Greenwich’s most recently-famous citizen, Steven “Dido” Dent, is heading for the natioal prominence he so richly deserves. Here’s New York Magizine chiming in:

Some people don’t learn lessons. Other people are very good at learning lessons. The story of Stephen Dent, a 54-year-old multimillionaire DuPont heir, includes both groups. Primarily, Dent is the one here who doesn’t learn. After getting blackmailed by a woman he met on the sugar-daddy website SeekingArrangement.com (sample testimonial: “Unlike other cash strapped students, I am pampered with expensive gifts. My sugar daddy is the sweetest man I know. He is my mentor, my benefactor and my lover”), the married Dent went back on the site only to get blackmailed again. And then once more again. And this was after the FBI and private investigators were involved the first time around. All told, Dent spent about $200,000 on women from the site, and was blackmailed for $150,000 more.

So, here’s the guy who wasn’t learning his lessons. Who was?

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So now is he serious?

73 Dearfield Drive is an okay colonial that has been up for sale since June, 2005. It started at $2.295 and now, three brokers, four years and numerous prices reductions later, it’s listed at $1.595 million. I hope the owner enjoyed exposing his home to strangers all that time because I can’t think of any other reason to keep it over-priced and unsold for so long.


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Oh my God, what’s happening to newspapers?

You’ve got a story involving a Greenwich millionaire, Stephen Dent of Riverside, a DuPont fortune, a hedge fund business, hookers, breast implants and blackmail, and the best the New York Post can come up with is this inadequate bit of print? Where are the Posts of yesteryear?  Where is the National Enquirer, for goodness sakes? No wonder John Kerry declared the newspaper business to be in crisis – it is!

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Buy this house

951 Lake Avenue is a 1720 antique on four acres of land at the intersection of Lake and Lower Cross Road. It was purchased for $1.335 million in 2002 and brought back to life with the installation of modern wiring, refinished floors, and the exposure of the original beams. A remarkable job but obviously not the house for everybody, because it was listed for sale in 2007 at $2.8 million and went nowhere. Today it’s been marked down, again, to $1.595. A little further negotiation and you’ve got yourself a fine, one-of-a-kind house. Neat.


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Brainwashing our children

The New York Times reports on a 21 minute video, “stuff” that is taking our classrooms by storm. Its a “lesson” put out by a self-described Greenpeace activist that denounces capitaism, disparages corporations and is filled with gross misstatements of fact. Naturally, the brain-dead people we graduate from teacher college love it and are exposing their students to this “truth”

What do you think the role of government is? I thought it was to defend our borders and possibly keep the peace. Nope. According to the video, “the government’s job is to watch out for us, to take care of us – that’s its job.”

How much of our budget is spent on national defense? If you said 21% , you’d be right. If you parroted this liar’s line and guessed 50%, you’d get an A from the communist in the front of your classroom.




No where is it mentioned in the video that that 21% compares to the 44% spent on Social Security, Medicaid and Medicare. Ad so on. Animals are the earth’s friends, people its enemy, corporations  are out to rob us, a $4.99 radio is not the wondrous result of world trade but a blatant rip off of poor people everywhere, etc. etc. As I said, teachers love it.

The video is a cheerful but brutal assessment of how much Americans waste, and it has its detractors. But it has been embraced by teachers eager to supplement textbooks that lag behind scientific findings on climate changeand pollution. And many children who watch it take it to heart: riding in the car one day with his parents in Tacoma, Wash., Rafael de la Torre Batker, 9, was worried about whether it would be bad for the planet if he got a new set of Legos.

“When driving by a big-box store, you could see he was struggling with it,” his father, David Batker, said. But then Rafael said, “It’s O.K. if I have Legos because I’m going to keep them for a very long time,” Mr. Batker recalled.

The video was created by Annie Leonard, a former Greenpeace employee and an independent lecturer who paints a picture of how American habits result in forests being felled, mountaintops being destroyed, water being polluted and people and animals being poisoned. Ms. Leonard, who describes herself as an “unapologetic activist,” is also critical of corporations and the federal government, which she says spends too much on the military.

Ms. Leonard put the video on the Internet in December 2007. Word quickly spread among teachers, who recommended it to one another as a brief, provocative way of drawing students into a dialogue about how buying a cellphone or jeans could contribute to environmental devastation.

So far, six million people have viewed the film at its site, storyofstuff.com, and millions more have seen it on YouTube. More than 7,000 schools, churches and others have ordered a DVD version, and hundreds of teachers have written Ms. Leonard to say they have assigned students to view it on the Web.

Environmental education is still a young and variable field, according to Frank Niepold, the climate education coordinator at the National Oceanic and Atmospheric Administration. There are few state or local school mandates on how to teach the subject.

The agency is seeking to change that, but in the interim many teachers are developing their own lesson plans on climate change, taking some elements from established sources like the National Wildlife Federation and others from less conventional ones like “The Story of Stuff.”

Home schooling looks more and more like the only answer to state-sponsored idiocy. I’m not a conspiracist; I don’t think bad people deliberately designed a system that would dumb down successive generations by creating state certification for morons and have dimwits take charge of our children. It’s all been done with the best of intentions, but the results are as disastrous as if it had all been planned.


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This could all work out if we can keep the government away

Dark times for solar energy industry, the WSJ reports. But that’s not bad – as prices for solar equipment fall, demand will rise and solar draws closer to conventional fuel in cost. It seems to me the market is working here, and if our saviors in Washington can just do nothing for awhile, we might get something going. Of course the chances of Congress sitting idle while there are subsidies to hand out and friends to reward are nil, but we can dream, can’t we?

In environmental terms, there may be a silver lining in the industry’s woes. The drop in prices for solar-power gear could make solar energy more competitive with burning fossil fuels to generate electricity, even if oil prices stay at around $50 a barrel. Today, less than 1% of the world’s electricity comes from solar power.

“The dramatic cost reductions now happening in solar will be good for the industry and the environment in the long term,” said Sven M. Hansen, chief investment officer of Good Energies LLC, which invests in renewable energy. “But in the short term, the outlook for solar companies has never looked more difficult.”

World-wide shipments of solar cells to companies that install rooftop solar-power systems and build fields of solar panels for commercial energy production grew 85% to almost 6,000 megawatts in 2008, according to research firm Collins Stewart LLC. This year shipments are expected to fall to 5,575 megawatts.

First-quarter sales at SunPowerCorp. fell 22%, and the California solar-cell producer cut its revenue forecast for 2009 by 17%. Last month, Taiwan’s Motech Industries reported its worst quarter since 2003 with revenues down 15% and net income down 80% to $1.4 million.

Some industry watchers think the current downturn is more than a bump in the road. Dan Reis, analyst at investment-research firm Collins Stewart, says falling solar-cell prices could herald an era of lower profits and thinner margins. Sales of solar panels will boom in volume terms, Mr. Reis said, but since prices will be much lower, companies with low costs, such as Chinese manufacturers Trina Solar Ltd. and Yingli Green Energy, will have an advantage.

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22% off from 2007 price

31 North Porchuck sold new for $7.850 million in July, 2007. Beautifully constructed on four acres of land, with pond, the new owners added a pool and other improvements and must have had, conservatively, $8 million into the place. It sold Friday for $6.250. Maybe if they’d staged an art show they’d have done better.


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Here’s a novel idea: let’s not bail Chavez out as he ruins his country

Chaves spent the weekend seizing and expropriating oil rigs from the private sector, guaranteeing that Venezuela’s oil output, already down 20% as the result of earlier state seizures, will plummet further. We’re sure to Jimmy Carter and Sean Penn down there shortly, befriending this dictator and blaming Cheney for his woes. Why not revoke their passports while they’re visiting?

A fresh round of expropriations in Venezuela has raised fears that the Opec producer’s already declining oil output could sink to its lowest level in the past 20 years.

Troops were mobilised over the weekend to assist Venezuela’s state-owned oil company, PDVSA, in seizing the assets of some 60 oil service companies, after a law was approved last week that paves the way for the state to take increasing control over its all-important oil industry.

“Today we also say: to the people what is the people’s,” the socialist leader said to roars of approval from red-clad supporters on the shores of Lake Maracaibo, the heartland of the nation’s oil production.

This move forms part of a broader assault against the private sector, which Mr Chávez has increasingly blamed as Venezuela slides into recession. Simultaneously he is engaging in what opposition leaders say is a campaign of persecution of his political foes.

Manuel Rosales, a former presidential candidate, has been granted asylum in Peru to escape arrest over corruption charges, while congress has removed almost all the spending powers of Antonio Ledezma, the anti-Chávez mayor of Caracas. Other opponents have been jailed or gone into hiding.

The move is the latest sign of the deepening cashflow crisis that has bedeviled the state oil company for at least two years as it has become overburdened with responsibilities far removed from its core business – in particular funding and running the massive social programmes that have become the bedrock of Mr Chávez’s support.

But analysts say that by shifting its problems onto its suppliers, PDVSA is storing up even bigger problems for the future. Not only does it lack the ability to operate as efficiently as the service providers, but it sends a grim signal to companies considering investing in Venezuela. Consequently, future oil production is under threat.

Taxes and royalties have been hiked four times since 2004, with an 85 per cent windfall tax introduced last year, while companies were ordered to give up operational control over four multibillion-dollar projects in the Orinoco two years ago, prompting Exxon Mobil and ConocoPhillips to exit the country and opt for international arbitration.

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Is this what Noel’s boy Andres is up to?

Listen do you want to know a secret? Doo wha doo

Listen do you want to know a secret? Doo wha doo

Business Insider reports that Allen Stanford, the Little Madoff of this year’s crop of Ponzi artists, has been a DEA informant for the past ten years, ratting out his Colombian and South American drug dealer banking clients. It’s suggested that this is why he has yet to be arrested and I wonder whether Walt Noel’s son in law, Andres Piedrahita isn’t working the same vein. He’s got the connections, the same rumors about money laundering are swirling around him and yet there he sits, tanned, happy and just a little bit pudgy. It’s a good strategy for fending off the feds, I suppose, but my understanding of Colombian drug lords is that they’re very sensitive to slights on their honor and really get pissed off when people turn them over to the U.S. Government for prosecution. If so, Walt better invest in a good alarm system for his Round Hill cottage – these guys go after the extended family, I read.


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Art shows for buyers?

The New York Times real estate section yesterday ran a story about over-priced houses in Greenwich and the various dog and pony shows agents are putting on to try to draw potential buyers. I understand the frustration of sellers who missed the market – Eight Copper Beech, for instance, one of the houses featured in the article, watched its neighboring spec house sell in late 2007 after that owner, but not this one, dropped his price and grabbed a buyer. Now eight is below where that one sold, but being late to the party is never any fun.

I have plenty of buyers and I imagine most other agents do too. I haven’t checked with mine but in our conversations over the past months they have expressed no interest in art shows – after all, most of them live in the City, where I understand art shows are plentiful – but do have a keen interest in price.  That would suggest where sellers might profitable or unprofitably, as the case may be, direct their energies and marketing strategies. But heck – they want to pass out hors d’oeuvres all summer in a staged, vacant house, who’s going to stop them? Keeps their agents busy, I suppose.

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Greenwich: More crooks than perverts, but we do have both – what a town!

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