It seems that Bernie Madoff may not make the full 150 years

 

Same scam, different results

Reportedly had a heart attack last month, although he’s now back in his cell.

The Madoff family has not come out of this well, unlike the Walter Noel clan, which just celebrated another Christmas / New Years on Mustique.

His only surviving son, Andrew Madoff, 47, is currently receiving treatment for stage-four cancer. Son Mark Madoff, 46,  hanged himself in his SoHo apartment on Dec. 11, 2010, the second anniversary of his dad’s arrest.

His ex-wife, Ruth, 71, now lives in [Old] Greenwich, Conn.

Oops! Another Madoff co-conspirator arrested in Greenwich

Feds showed up at Paul Konigsberg’s home on 19 Pinecroft Road at 6:00 AM this morning and hauled him away.

FBI agents arrested Paul Konigsberg at his Greenwich, Conn., home around 6 am Thursday. Konigsberg, 77, a longtime friend of Madoff, is expected to appear in Manhattan federal court later on Thursday.

“Konigsberg helped recruit new investors to Madoff’s Ponzi scheme,” a law enforcement source said.

The money man was a founding partner of Konigsberg Wolf & Company, a midtown accounting firm no longer in operation.

The five-count indictment that will be unsealed Thursday charges Konigsberg with conspiracy to falsify records of a broker-dealer and an investment adviser, falsifying such records, fraud, and conspiracy to commit fraud.

Konigsberg, the feds say in the indictment, directed the creation of false books and records at Madoff Securities, where a decades-long multi-billion investor ripoff was underway.

“… By December 2008, [Konigsberg’s firm] handled various accounting assignments in connection with more than 300 of Madoff Securities investment advisory accounts,” the indictment alleges.

Konigsberg through his arrangement with Madoff Securities also arranged for a relative to get a $20,000-a-year no show job that included benefits, the indictment alleges. The relative, listed as an unnamed co-conspirator, pocketed $320,000 plus health benefits from 1992 until 2008 when the firm collapsed.

Reed Brodsky, a lawyer for Konigsberg, did not immediately respond to requests for comment.

Well we can do that for you, Mr. Brodsky: “My client is completely innocent, and looks forward to his day in court”. Uh huh. My only question is, how come Walter Noel is still enjoying his pool up there at 175 Rond Hill Road?

Where’s Walter?

Walter’s Playhouse

The media has lost track of Walter Noel this summer and I can’t find him. Is he summering in Southampton? Anyone know?

And can you figure out how he’s allowed to stay in his beach cottage (last rented out, summer of 2009, for $375,000 per month) when he’s on the hook for a couple of billions of dollars? And how, four years on, is he still free?

Just asking.

Noel, Noel, Noel, Noellll?

"Everything I am today I owe to Bernie" (actual quote, July, 2008)

Where’s Walto? No, not our Walt but the Round Hill Road guy with all that money. I’ve heard complaints from his neighbors that nothing has changed at the Noel residence. The expensive cars still come and go, parties are held (who would attend such an affair except from morbid curiosity?) and Monica hasn’t conducted a single tag sale.

So, Mustique for Christmas? Vail? Inquiring minds want to know.

Has Bernie Madoff really stashed away $9 billion?

So says a fellow inmate, and if you can’t trust a con then who can you believe? Supposedly, friends are hiding it for him and if so, I might want to make a late night visit to the Noel household on Round Hill Road and do some digging in the flower garden. But I wonder how much good even $9 billion will do a person after 150 years.

Did Greenwich Bank & Trust do the dirty with Bernie Madoff?

That’s what our aspiring senator but still, to his intense frustration, Attorney General Richard Blumenthal says he is investigating. In fact, he’s poking around GB&T’s parent, Westport National Bank, but same thing; all are owned, mostly, by Greenwich’s William Berkley, he with the huge spread up on Doubling Road and the insurance building on the corner of Steamboat Road.

NEW YORK, April 6 (Reuters) – The Connecticut Attorney General said on Tuesday he was looking into whether Westport National Bank and a Connecticut pension consultant aided and abetted Bernard Madoff in his $65 billion Ponzi scheme.

Connecticut Attorney General Richard Blumenthal said in a statement that his office and the Connecticut Department of Banking have been conducting “a wide-ranging investigation” into federally chartered Westport National Bank, pension consultant PSCC Services Inc and its owner Robert Silverman.

“Our investigation is focused on allegations that Westport National Bank, PSCC and Mr. Silverman operated investment funds that fed cash into Madoff’s massive fraud, skimming millions of dollars in fees for themselves,” Blumenthal said in the statement.

“I expect to make a decision soon regarding possible legal action.” Legal action could be aimed at recovering money for investors as well as fees.

Madoff is serving a 150-year prison sentence after pleading guilty to running the Ponzi scheme in which scores of investors were defrauded.

Connecticut Governor Jodi Rell said in a statement on Tuesday that the probe suggested that clients of the bank had invested some $59 million with Madoff, but received statements from the bank showing that they had invested in “shares” or “units” with specific market values.

“The probe found information indicating that Silverman and PSCC Services allegedly steered clients toward pooled investments for which Westport National Bank served as the nominal custodian and which were to be managed exclusively by Madoff’s company,” Connecticut Department of Banking Commissioner Howard Pitkin said in a statement.

Silverman and PSCC received more than $14 million in fees and Westport National Bank got $2.5 million in fees for managing the investments, the governor’s statement said.

UPDATE: Silverman seems to be a Wilton residence with a “pension consulting” practice  a half block from Westport National.

And there’s this, from the (February 9, 2009) New York Times:

The arrangement seemed odd to specialists on bank custodial services.

Custody accounts typically involve an array of specific services, explained Marshall N. Carter, the retired chairman and chief executive of State Street Bank, one of the largest custodial banks in the world. Those include settling customer trades, insuring safekeeping of the securities, servicing customer transfers and providing information about the portfolio.

In this case, no customer trades were settled and the safekeeping of securities was apparently left to Mr. Madoff. Finally, although the bank said it provided record keeping, tax reporting and “other ministerial services” to the custodial clients, Mr. Silverman was also being paid a “record keeping” fee.

Together, the fees paid to the bank and PSCC Services were almost 4 percent of the customers’ assets — well above normal levels for those services, according to Charles Ruffel, founder and director of Plan Sponsor, a financial information business serving institutional investors.

The bank’s custody fee was about three times the going rate, Mr. Ruffel said, and he called the record-keeping fee paid to PSCC “unconscionable.”

Being John Malkovich isn’t as much as it once was, I guess

"Gimme back my money, you bastard!"

Malkovich sued Irving Picard, the Madoff trustee yesterday, claiming he’s entitled to the full $2.2 million he had “invested” with the man in November ’08, and not just the piddling $670,000 Picard has awarded him. I haven’t read the suit, but it sounds like another investor claim that they shouldn’t have their previous return of capital credited against them. If so, as Warner Wolf likes to say, “YOU LOSE!”

Catching up on email

I’ve been sort of swamped lately and if I haven’t responded to your message, please try me again. In the meantime, here’s an interesting missive from someone who wasn’t impressed by Helen Davis Chaitman a self-proclaimed Madoff victim:

Saw your article about Helen you were so right I hired Helen in 1998 she took $100,000 from me just to review my case then filed numerous litigation against Chase Manhattan Bank and a bankruptcy trustee and then in 2002 abandon me (when my money ran out) to be put into a collusive fraudulent involuntary bankruptcy by a law firm she was supposed to be suing. She left me and my 3 children homeless and destitute. She is definitely NOT A VICTIM and absolutely knew what she was doing when she invested with Madoff. Donna Sturman

Links to various law suits attached. Contact me if you need them.

My dream date with Hooper draws nearer

Sorry, little fellow, but I have to let you go

Madoff boys agree to asset freeze. I’m sure Hoops is an understanding sort of girl, but you can’t do much Seychelles fly fishing on five hundred bucks a month.

Feb. 5 (Bloomberg) — Andrew and Mark Madoff, whose father Bernard is serving 150 years in prison for the largest-ever Ponzi scheme, agreed to restrict movement of their own personal assets, not incur debt beyond $1,000 and give a monthly accounting of their expenses.

Peter and Shana Madoff Swanson, Bernard’s brother and niece, signed similar agreements with the trustee liquidating the con man’s estate, Irving Picard, according to documents filed today in U.S. Bankruptcy Court in Manhattan.

Picard, who is unwinding Madoff’s defunct investment firm and gathering assets to help pay customers, sued Andrew, Mark, Peter and Shana in October, claiming they spent almost $199 million of victims’ money and treated the investment firm as their personal bank.

The Madoffs said in court papers that they deny Picard’s allegations and dispute his right to restrict their assets. They are consenting to the asset freeze to avoid “the potential costs and expenses of the instant dispute,” which could prove “substantial,” according to the filings.

The asset restrictions prevent the Madoffs and their representatives from selling, leveraging, wasting or moving all their property that is worth more than $1,000, “except for wearing personal clothing and jewelry in the normal course.” The must also take “reasonable” steps to preserve the value of their possessions, according to the filings.

30 Days

In addition, they agreed to disclose their finances to Picard within 30 days. Their monthly accounting of expenses requires them to document all items costing more than $500.

UPDATE: Pappa Bernie’s NYC penthouse is reported under contract. All that’s left to get rid of is the Florida property, and that’s going to take awhile.

Perfect

Going once ...

Scam artists auctioning “Genuwyne Madoff art work” slapped upside the head by Blumenthal. “I checked with my  neighbor and good friend Walt,” Blumenthal told FWIW’s Scusie, “and he admitted to me that none of this crap ever hung on his pal Bernie’s walls. So he promised to stop doing it.”

 Phew! Another bunch of suckers saved from disappointment.

“It’s a scam within a scam,” said Philip Eliasoph, professor of art history at Fairfield University, who complained to Blumenthal’s office Thursday about the scheduled auctions. Eliasoph, who teaches about museums, auctions and the art market, said it’s a classic bait-and-switch tactic.

“The whole pretense is, it’s coming out of Uncle Bernie’s Montauk mansion,” said Eliasoph, a member of the state Commission on Culture and Tourism.

“People are so stupid,” he said. “This one in particular is egregious because they’re playing on the whole pretense of the Madoff fraud. It’s a fraud encrypted in a fraud. Most of what is being auctioned, if you showed up with it at the door of Christie’s or one of the other major auction houses, you wouldn’t even get in to see one of the specialists in modern or contemporary art.”

Bidding war in Montauk

(Ankle monitor excluded)

The good news for Madoff investors: Bernie’s Montauk home sold for $9.41 million, nicely above U.S. Marshal’s asking price of $8.750. The bad news: winning bidder was Raj Rajaratnam.

Walt Noel should be so lucky

Bernie Madoff’s Montauk house, asking $9 million, has already sold after “a fast and furious bidding war” to an all-cash buyer. That’s excellent news for most of his victims but can his biggest loser, self-described Madoff victim himself, Walter Noel, expect the same kind of action when he’s forced to sell his Round Hill home? Not a chance, for several reasons: first, he lacks the notoriety – Bernie was an evil genius, or at least evil, while Walt’s claim to be just a bumbling idiot is beginning to ring true. Second, the Madoff place is direct ocean waterfront. Sure it will be washed away in ten years or so, but there’s no way you could build in such a vulnerable location today and, until the sea does its work, the new owner will have the best views in town. Walter’s place is a tired old dump with a view of the road, period.

So sorry, Walt, but I don’t think you can count on the proceeds from 175 Round Hill doing much to get you out from under this mess. Have you checked the extradition treaty of Mustique?

A must-read review of Bernie Madoff’s Montauk love nest, now for sale by federal marshals

Dealbreaker’s Bess Levin, the funniest financial writer (I suppose that’s what she is) working today, has a take on Bernie’s Montauk digs that you really should read. Levin uses some salty language that I don’t often use on this blog (so that readers won’t identify me when they hear me in public), but if your delicate eyes can stand it, feast on this.

Madoff sparks a new industry- books

Lots to come, and I hope one of them will be mine (I’m concentrating more on the Walter/ Greenwich side of the story because it’s more fun) but the Journal excerpts “Madoff With the Money” today. I particularly like this part where Peter Madoff, having known about the scam for at least 24 hours and spent that time discussing things with his lawyers and the FBI, announces that, to his shock and amazement, Bernie’s been arrested. It’s such a nice scene I may lift it and use it for when I have Walter admitting to his Round Hill Club investors that their money is gone.

Around 10 o’clock that morning, the boss’s younger brother, Peter, the number two in charge of the family-run firm— Bernie’s sidekick for some four decades— entered the trading room on the 18th floor and called for everyone’s attention.

His hands were trembling, and he needed to lean against a desk to steady himself. His voice was tremulous.

“I have some bad news,” he told the gathered workers. “Bernie’s been arrested.”

“He looked scared, teary-eyed, and everyone was suddenly in a state of shock,” vividly recalls one of those standing there, listening in utter disbelief. “Someone asked Peter what happened, and he said he did not know why Bernie was arrested, or for what reason—or whether it was personal, or whether it was business. He said he didn’t know whether it was for good, and he didn’t know whether it was for evil. (This was a claim that would later turn out to be untrue.) And he said, ‘Don’t discuss this with anyone.’

“When we found out later that day what Bernie had done, I remembered how sincere Peter had sounded that morning, and I thought, ‘In his next career he could win an Oscar.'”

Help Wanted

U.S. Marshal’s Service seeking brokers to sell off Bernie Madoff’s New York (Manhattan, Long Island) and Florida (Palm Beach) properties. It’s an intriguing opportunity, but I’m holding out for Walt’s cottage at 175 Round Hill. When you’re operating with a limited supply of talent, it doesn’t pay to spread it too thin.

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.

It’s Frank DiPascali Day in federal court

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.

Bernie might welcome it but Walter Noel’s damn lucky he wasn’t born Chinese

Sunrise on Mustique

China executes two con artists

Bernie Madoff gives first interview

It’s his first because no one wants to visit him. But this lawyer who’s suing the Madoff clan did, and Bernie opened up. Here’s a big d’oh: Bernie says he got away with it because the SEC was so dumb. You think? Fun article, for Madoff fans. Myself, I’m waiting for Walt Noel to fess up but judging from all his comments on this board, we’ll be waiting a long time for that.

When does 175 Round Hill Road hit the market?

Madoff trustee Picard in settlement talks with Fairfield Greenwich Group. As noted earlier today, Noel’s Fairfield Sentry Fund was dissolved yesterdayin the British Virgin Island, Attorney Boies is just one of dozens of lawyers clawing their way up the road to Walter’s house and, all in all, things look bleak for Walter and the Fabulous Five. Will they discover that “tomorrow is another day”? Will they have to leave Tara? Tune in, as the world turns.