Daily Archives: August 11, 2009

Go directly to jail

Madoff’s man Frank DiPascali was sent to jail today, where he’ll stay at least until sentencing in May of next year. As part of the plea bargain, the prosecutors had agreed to let the man stay free on bail but as in all such bargains, the judge doesn’t have to go along. In this case, he didn’t. Good.

Attorneys argued the former chief financial officer should be free on bail to help investigators sift through a mountain of evidence. But U.S. District Judge Richard Sullivan surprised both sides by ordering DiPascali jailed immediately — a rarity for a cooperator in a white-collar case who had pleaded guilty.

Sullivan said he felt compelled to keep 52-year-old DiPascali locked up after hearing the defendant admit that, at Madoff’s direction, he lied to the Securities and Exchange Commission in 2006 when he thought they might discover the fraud. The judge said he was troubled too that DiPascali also lied repeatedly “to people who entrusted him with their life savings.”

Defense attorney Marc Mukasey told Sullivan his client was “completely unprepared for this” and tried several times to persuade the judge to change his mind. He described DiPascali as a genuinely repentant cooperator who won the trust of FBI agents by speaking to them nearly every day since late last year.

But in the end, a dejected-looking DiPascali was handcuffed and led out of the courtroom.

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Batten the hatches

fairYep, it’s that time of year again when the residents of Riverside Proper open the gates and let the mackerel-snappers from Cos Cob and NoPo cross the river and the Post Road to attend a charity fair at St. Catherine’s. We initially permitted this with trepidation but once we learned that an endless supply of cotton candy and anything deep fried (plus armed policemen, mace and strong fencing) kept them docile and relatively well behaved, we relaxed and let the love for our fellow man flow. It’s actually quite charming and educational to watch from the safety of our car while these people behave  just as they would in their natural habitat. Do drive by and see for yourself, and bring the kids. The fun continues through Saturday.

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Conn. Supreme Court lays an egg

Two ancient sisters spend their declining years shuttling off to Foxwoods, shoving their Social Security checks into the slots, enjoying a few adult beverages while ogling the floor show and in general behaving in a manner no proper Baptist would approve of. They also, back in 1995, draw up a contract, stating that if either wins a jackpot, she’ll split the proceeds. Sister Rose, now 87, hits the Lotto to the tune of $500,000 but gives half to another sibling and tells her sister to piss off. Sister sues, naturally. Today, our state Supreme Court rules that the mutual love and affection the sisters (once) held for each other constitutes “consideration” sufficient to make the contract valid on its face. It’s off to a trial court to determine whether the facts will support the contract itself. I don’t know, it’s been 31 years since I faced this kind of question in a contracts class and I could be wrong but I think the Supremos have just extended their streak of applying a desired result instead of the law.

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My God, next we’ll learn that medical care’s expensive and there’s corruption on the waterfront!

Madoff CFO Frank DiPascali confesses that the Madoff Ponzi was a fake all along and he and others knew it.

Mr. DiPascali admitted to helping Mr. Madoff and others engage in a scheme that “hurt thousands of people” between the early 1990s and 2008.

He said Mr. Madoff had amassed a stable of clients as an investment adviser by the early 1990s, but no purchases or sales of securities were taking place in their client accounts. Mr. DiPascali said he learned in the late 1980s or early 1990s that no trading was occurring in those client accounts.

“It was all fake; it was all fictitious,” Mr. DiPascali said. “It was wrong, and I knew it at the time.

The Journal article points out that the total time on all charges, if cumulative, amount to 125 years. No word on who DiPascali’s ratted out but his admission that he helped Bernie “and others” run the scam is going to ruin some people’s sleep tonight. If anyone goes for a one-way swim off the Hamptons early tomorrow morning, I’d understand.

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Another shocker

High fees common in medical care, survey finds.

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Shocker: NYC Waterfront Commission corrupt!

brando Holy Marlon, Batman, who’d ever have guessed? 

The Waterfront Commission of New York Harbor, which was created in the 1950s to break the mob’s grip on the docks, became its own bastion of lawlessness, employing the same corrupt, self-serving methods of the pier-based gangsters it was supposed to pursue, investigators said in a scathing report released Tuesday.

“I couldda been a contango!”

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DiPascali update

Madoff’s CFO is  in court, where the U.S. has presented a 10 – count charging document to which he’s expected to plead guilty later today. (bumped)

The charging document, filed in Manhattan federal court just hours before the scheduled plea proceeding, accuses DiPascali, 52, of conspiracy, securities fraud, investment adviser fraud, falsifying records, money laundering, perjury and other crimes.

DiPascali worked for 33 years in the investment advisory arm of Bernard L. Madoff Investment Securities in New York, many of them as chief financial executive, before the 2008 economic decline exposed a fraud of as much as $65 billion (39.3 billion pounds).

Madoff, who swindled large and small investors worldwide over at least 20 years, admitted in a guilty plea in March to having operated a classic Ponzi scheme, a fraud in which early investors are paid with the money of new clients.

DiPascali faces a maximum sentence of 20 years for several of the crimes with which he is charged.

The man is 52. Wanna bet he’d like to get out of jail before he’s 70? I hear the first stirrings of a canary concert.

Update: Aha! Now the WSJ is following the story. They reach the same conclusion I do, which is that Frankie’s singing. Cool!

The new name you’ve gotta know: Frank DiPascali. [obviously written by someone not reading this blog – Ed.] He’s the former CFO of the Madoff investment-advisory business. We blogged about him last Friday, here, when word broke that he’d be charged by the U.S. in connection with the multibillion-dollar Ponzi scheme.

Today, however, come the charges themselves. Click  here for the government’s filing; here for the WSJ story; here for the Bloomberg story. The charges are ten-fold. Among the crimes allegedly committed by DiPascali: mail fraud, wire fraud, securities fraud, investment-advisory fraud and perjury. But the big one: Conspiracy.

Of course, we have no idea who else the government thinks may have conspired with DiPascali, aside from Bernie himself, but the very notion is pretty intriguing given that DiPascali has decided to plead guilty — today, as a matter of fact. Also new news: according to the government (here), DiPascali has a plea agreement with the government. Bernie, as you’ll recall, didn’t.

In a letter to the court dated Monday, prosecutors recommended that DiPascali be released on a $2.5 million bond secured by his sister’s home.

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I’m not wrong, the market is!

416 Davis Avenue is back, this time listed with Engles & Volker, who seem to be specializing in lost causes these days. This is a beautiful house, extremely well made, to my untrained eye, anyway, and in a good location across from Bruce Park on a tidal inlet (although I never did understand the original listing’s promise that one could “walk to the beach”. What beach? Tod’s? It’s six miles away!). But it has remained on the market for well over two years, starting at $6.975 and still today asking $6.3 million. I’d think that if $6.9 was the wrong price at the peak of the market then $6.3 isn’t going to work any better now. But this builder is determined to get his price; he turned down $5.5 a year ago and I’m pretty sure a little math would show that that was a mistake, financially, but what price pride? Anyway, nice house.

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The camel’s nose under the tent

Turns out, Westchester County was vulnerable to the government’s imposition of low-income housing in its towns because it has accepted Community Redevelopment Grants. Under the new administration, the focus will be on zip codes when choosing whom to sue and except for that Beverly Hills one featured on TV, I’ll bet 06830 is the most prominent. So I don’t know: has Greenwich accepted these funds? I’m hoping we were too wealthy to qualify for them but if we did any time in the past 35 years, brace yourself, Bridget.

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Contango!

oil tankerWe’re back to oil futures being worth more than current prices so oil is being stored for future delivery.

With the long-dated oil futures prices surging past near-term one (contango), we’re back to oil being hoarded at sea in VLCC (very large crude carrier) tankers as traders arbitrage near-term vs. longer-term futures contracts. But just how much oil is currently adrift as a result of such arbitrage? Well it seems no one really knows for sure.

Reuters: ICAP Shipping estimated 29 VLCCs were storing crude globally, rising from 24 VLCCs two weeks ago. It estimated that 10 VLCCs were holding crude in the U.S. Gulf, 10 off the coast of Northwest Europe, seven off West Africa, one in the Mediterranean and one in the Far East. [FYI – Each VLCC can carry about 2m barrels]

Frontline (FRO.OL), the world’s biggest independent oil tanker shipping group, told Reuters on Thursday around 50 VLCCs were storing crude oil, particularly in the U.S. Gulf and off Europe.

A crude oil trader at a large independent trading house estimated between 70 million and 100 million barrels of crude were stored globally.

The message is simple, expect higher oil prices as your base case.

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Too late for Bob Tate to think of this

That darned cat: Florida man blames pet for downloading child pornography on his computer. “Bad, Pussy!”

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Why you always want to have a $10 million non-refundable retainer on deposit with your lawyer

Poor old Allen Stanford, he of the $7 billion scam, is sweating away the summer in a hot airless Texas jail cell with ten other men while his “dream team” defense lawyers are scrambling for the exits. The reason? The feds froze every penny the guy’s stolen and he has nothing to pay lawyers with. Although known for their compassion, criminal defense lawyers take a skeptical view of working for nothing, and Stanford’s looking at a defense provided by the Public Defender’s office, which is sort of the Jos. A. Banks to the law world’s Brooks Brothers. Not that there’s anything wrong with that, mind you, but most Texas inmates used the same service. If that tells you anything.

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It’s Frank DiPascali Day in federal court

The Noels flee Round Hill

The Noels flee Round Hill

Bernie Madoff’s CFO, Frank DiPascali, is in court this morning pleading out. The feds have had eight months to squeeze this guy dry and, while Bernie may have chosen to clam up and take the rap, there’s no chance DiPascali’s done that – he’s talked, guaranteed. How do I know this? Because if he hadn’t, the prosecuters wouldn’t be accepting his plea.

It’s not just the Noels who must be spending a nervous day today, but Andy, Mark, and everyone who gave Bernie other people’s money in exchange for a fee.

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Greenwich Time: we’ll spike a story on Antares, but if we can slam a kid, we’re all over it

Greenwich Time’s expose of Antares developers seems to have disappeared off the table while their lawyers figure out if they might get sued. But the death of a 23-year-old Greenwich girl who my daughter Sarah tells me was universally loved as a warm, generous, loving girl, is treated as a crime story:

By Frank MacEachern
Staff Writer
Posted: 08/10/2009 05:48:04 PM EDT

 

A Greenwich woman was speeding, talking on a cell phone and not wearing a seat belt when she lost control of her car and slammed into a telephone poll last Wednesday, Vermont police said.

Hannah Smith, 23, was pronounced dead at the scene of the 10:30 p.m. accident on Todd Hill Road in Winhall, Vt., about 35 miles northwest of Bennington.

Chief Jeffery Whitesell of the Winhall Police and Rescue Department said not wearing a seat belt may have been the major factor in her death.

“Had she been belted in, it may have been a different story,” he said. “She was partially ejected from the vehicle.”

Police said Smith was also speeding, but said the exact cause of the accident may never be answered. “I don’t know if we are every going to definitively ever know,” he said.

I understand that our local paper relies mainly on AP stories for its  filler but when it assigns one of its few remaining reporters to write on the death of a young Greenwich girl, I’d hope for a more restrained approach. I don’t object to recounting her errors, but to use them as the lede is pretty appalling.

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What liberal media?

In a story that has been amply reported all over the Internet but deemed not fit to print in, say, the New York Times, (white) union thugs pummelled a (black) conservative at a Town Hall meeting, putting him in the hospital. This was not a racist incident because the guy was a conservative. Nothing to see here, move along, move along.

But now comes a new liberal slant to the story: the sorry son of a bitch was uninsured and has to seek donations to pay for his medical care. That wouldn’t be necessary under ObamaCare – he could be beaten, kicked and stomped for his views but Uncle Obama would makes sure his bills were paid. Pretty good deal, eh? So shut your yap.

In an updat, buried at the end of the article, the writer concedes that the guy was insured, but that’s irrelevant, to him – and to me, come to think of it.

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Heh

guantanamo“Guantanamo Bay Come for the Beaches, Stay for the Waterboarding”

Delight your children and buy them each a T shirt here. Remember, it’s about clan consciousness.

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It’s open house Tuesday!

Looks like I’ll be doing my part to reduce my carbon footprint today. There’s just not much to see out there, at least so far – additions can show up for the next thirty minutes.

We have 38 Dairy Road, a 1960 builder’s colonial on 2 acres, asking $3.595 million; assessment is $2.417 and I’m with the assessor on this one.

14 Glen Road, a nice renovation of another builder’s special, is still at $2.150, an improvement over the $2.650 they were asking in 2006 but three years on, I’m still not enthusiastic.

15 Quail, on the other hand, is definitely getting there. It too started out in 2006, but at $6.250 million. It’s down to $3.9 million today, with an assessed value of $3.5.

In the new listing department, we have that old perennial 12 Mountain Wood Road making a return appearance, still at the same price of $9.750 million. Funny thing, that was the price asked for it way back in January, 2004 and it sold 500 days later, in 2005, for $8.4 million. It’s been asking $9.750 since something like 2006, I believe, while the assessor’s pegged it at $6.205. Your call – nice house.

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