Category: Crime

  • Madoff adjusts to life in a gilded jail – his neighbors not so much

    Disgraced trader Bernard Madoff may be relieved not to have to trade in the comforts of his $7 million East Side penthouse for a jail cell, but his neighbors are none too happy.

    Residents like Today show host Matt Lauer and Barclays director Diego Gradowczyk now have to contend with throngs of cameramen and angry demonstrators every time they want to dash out to nearby Madison Avenue to do some Christmas shopping.

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    This was not what life in an exclusive Lenox Hill coop was supposed to be.

    But Manhattan Federal Magistrate Judge Gabriel Gorenstein, who originally demanded four co-signers to back Madoff’s $10 million bail, changed his mind after the trader came up with just two – his brother and wife.

    Instead of locking him up, Gorenstein ordered Madoff confined to his 12th-floor apartment at 133 E. 64th St, where he is required to wear an electronic ankle bracelet to monitor his every move. The apartment was used as collateral to secure the bond, along with Madoff’s mansions in Montauk, New York and Palm Beach, Florida.

    But why is the mastermind of a $50-billion fraud getting such kid-gloved treatment?

    The New York Daily News cites unnamed sources that Madoff has been the target of numerous death threats.

    Another theory has it that he is providing valuable help to the agents digging through a morass of books to trace the scope of the alleged Ponzi scheme.

    In any case, the apartment, as well as the other properties, are likely to be liquidated in the future to pay back Madoff’s legions of swindled investors. Little is known about the apartment. But a story in the Jewish Daily Forward recalls a grand foyer and living room lined with Greek and Egyptian statues and gold sconces, which were glimpsed during a visit five years ago.

    Madoff’s firm, meanwhile, has also been put into receivership, and the Securities Investor Protection Corp., a government fund, has begun fielding calls from investors seeking remuneration.

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    • Lymphoma foundation escapes Madoff wrecking ball

      December 20, 2008 at 7:08pm

      One charity with Madoff connections has managed to emerge unscathed.

    • Trading legend Bernard Madoff charged with ‘massive’ securities fraud

      Bernard L. Madoff, the founder of Bernard L. Madoff Investment Securities and a former NASDAQ governor, was arrested Thursday morning and charged with multi-billion-dollar criminal securities fraud.

      A complaint filed by the Securities and Exchange Commission alleges that Madoff told two senior employees Wednesday that his business was “a giant Ponzi scheme” that had lost $50 billion over a period of years, that he had “absolutely nothing” and “it’s all just one big lie.”

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      The disclosure came after the 70-year-old founder had tried to hand out early bonuses to employees. When questioned by the senior employees, he reportedly said he had a couple of hundred million dollars left and wanted to distribute it before turning himself in to authorities.

      The senior employees understood him to be saying that he had been paying returns to certain investors out of the principal received from other, different investors, according to the SEC complaint filed in federal court in Manhattan.

      “We are alleging a massive fraud — both in terms of scope and duration,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement. “We are moving quickly and decisively to stop the fraud and protect remaining assets for investors, and we are working closely with the criminal authorities to hold Mr. Madoff accountable.”

      The SEC is seeking emergency relief for investors, including an asset freeze and the appointment of a receiver for the firm.

      Regulatory filings show the Madoff firm had more than $17 billion in assets under management as of the beginning of 2008. It appears that virtually all assets of the advisory business are missing, the SEC complaint said.

      Madoff Investment Securities is one of the largest independent trading firms in the securities industry. The company web site says that its clients include “scores of leading securities firms, banks and financial institutions from across the United States and around the world.”

      Madoff appeared this afternoon before U.S. Magistrate Judge Douglas Eaton and was charged with a single count of securities fraud. He was released on a $10-million bond guaranteed by his wife and two others, according to Bloomberg News.

      “Bernard Madoff is a longstanding leader in the financial services industry,” said defense attorney Dan Horwitz. “We will fight to get through this unfortunate set of events. He’s a person of integrity.”

      Madoff started his firm in 1960 with $5,000 of savings and took advantage of securities-law changes in the 1970s designed to spur competition in U.S. stock markets, according to a profile posted on the web site Finance Tech.

      He was chief of the Securities Industry Association’s trading committee in the 1990s and early this decade, where he represented brokerage firms in discussions with regulators about new stock-market rules as electronic-trading systems and networks gained prominence.

      He was also a member of NASDAQ Stock Market’s board of governors and its executive committee and served as chairman of its trading committee.

      The firm’s web site boasts of the firm’s “high ethical standards.”

      “Clients know that Bernard Madoff has a personal interest in maintaining the unblemished record of value, fair-dealing, and high ethical standards that has always been the firm’s hallmark.”

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      3 Comments

      • #1.   P Roberts 12.11.2008

        amazing; the tragic thing to think about is the loss in total human life that it will take to make up for this guy’s Madoff’s thievery

      • #2.   Stu 12.12.2008

        I keep wondering where all the money went? If it was a ponzi scheme then I guess the early investors made out and the later folks will be getting screwed. $50b is a lot of bananas!

      • #3.   Mike 12.13.2008

        How can this man be allowed to make bail at 10 million dollars (by his wife!!???) … Isn’t that money the investors – who he stole? I

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      • Bailout’s toughest critics were Republicans from states with foreign automakers

        December 13, 2008 at 8:29am

        Longtime House Speaker Thomas “Tip” O’Neill once declared, “All politics is local.” So it should come as no surprise that the loudest opponents to the bailout plan for the Big Three automakers were Republican senators whose states are home to factories run by Detroit’s foreign competitors.

      • In final days, Bush likely to pardon more than turkeys

        The headline in The Onion may have nailed it: “In Thanksgiving Tradition, Bush Pardons Scooter Libby In Giant Turkey Costume.”

        Skip the turkey costume, and the reality may not be far off: Many are betting that Vice President Dick Cheney’s former chief of staff will be among those granted clemency before the president steps down.

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        Bush had already commuted Libby’s prison sentence after his conviction for perjury and obstruction of justice in the outing of CIA operative Valerie Plame. But wiping Libby’s record clean would enable him to practice law again.

        Libby is unlikely to be the only last-minute pardon. Other top prospects, listed by ProPublica, are said to include:

        • Michael Milken, the 1980s junk bond king whose pardon application is being handled by former U.S. Solicitor General Theodore B. Olson – a close friend of the president’s, and the lawyer who successfully argued Bush v. Gore before the U.S. Supreme Court.

        • James Tobin, Bush’s 2004 New England campaign chairman who raised more than $200,000 for the president’s re-election bid. Tobin was indicted in October for making false statements to the FBI in connection with the bureau’s investigation of the plot to jam Democratic Party phones in New Hampshire in 2002;
        • Brent Wilkes, the defense contractor who was sentenced to 12 years in prison in February for furnishing former California Congressman Randy Cunningham with yachts, vacations and other luxury items in exchange for lucrative contracts, because of his cooperation with federal investigators;
        • J. Steven Griles, a deputy Interior secretary during Bush’s first term who pleaded guilty to obstruction of justice charge sin connection with his 2005 Senate testimony regarding the Jack Abramoff political corruption scandal.

        Presidential pardons are a long political tradition, embraced by both parties. In his final days, for instance, George H.W. Bush pardoned former Defense Secretary Caspar Weinberger, along with 10 others who had been convicted in the Iran-Contra scandal, an arms for hostage program during the Reagan administration (when Bush was vice president).

        That raised eyebrows, but nothing like the reaction to Bill Clinton’s pardon of fugitive financier Marc Rich, whose ex-wife Denise Rich had been a major contributor to his presidential library and to the Democratic Party.

        The Rich decision, which became the subject of Congressional and criminal investigations, is likely to come up again in the confirmation hearings for Eric H. Holder Jr, Barack Obama’s choice for attorney general, given Holder’s involvement in the decision.

        (One interesting historic footnote: Rich’s attorney from 1985 until the spring of 2000 was Scooter Libby.)

        By comparison with his predecessors, the younger Bush has been downright niggardly in his use of pardons, granting clemency to only 171 people over eight years.

        Most of those have been for penny-ante crimes. For instance, Leslie O. Collier – one of 14 people he pardoned last week – was pardoned for his conviction for the unauthorized use of a pesticide in killing bald eagles.

        Bush’s most significant clemency to date was commuting Libby’s prison sentence. But of course, he still has almost two months to make up for lost time.

        Among those who have submitted applications are disgraced Olympic gold medalist Marion Jones, suspended National Football League quarterback Michael Vick, home living doyenne Martha Stewart, former Enron executives Jeffrey Skilling and Andrew Fastow, jailed lobbyist Jack Abramoff and convicted former California Congressman Randy Cunningham.

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        • Small donors played comparable roles in Obama and Bush campaigns

          November 30, 2008 at 7:28am

          A new study by the Campaign Finance Institute shows that Barack Obama received about the same percentage from small donors in 2008 as George W. Bush did in 2004.

        • AIPAC case: DC grapevine or espionage?

          What’s a little information-swapping between friends?

          America’s most powerful pro-Israel lobby says that’s the currency of everyday life in the nation’s capital. The Justice Department, however, is calling it espionage, and will finally get to make its case next month when two former officials of the American Israel Public Affairs Committee (AIPAC), go on trial in federal court in Alexandria, Va., for allegedly passing classified information about Iran and Iraq to Israeli officials, colleagues and the media. (Story continues below interactive map.)

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          Steven J. Rosen, former policy director for AIPAC, and Keith Weissman, the lobby’s former Iran specialist, are charged with violating a World War I-era espionage act for sharing what the government calls national defense information “with persons not entitled to receive it,” according to an August, 2005 indictment. The names of the recipients are not disclosed in the indictment, but media reports have identified them as Washington Post reporter Glenn Kessler and Naor Gilon, minister-counselor for political affairs in the Israeli Embassy in Washington.

          The trial is expected to produce embarrassing revelations about the tight relationships between influence peddlers and government officials. AIPAC, which fired the two officials in 2005, has a particularly close relationship with the Bush White House. The president himself addressed AIPAC members in Washington on May 18, 2004, and Vice President Dick Cheney spoke to the group last year.

          But the group’s ties extend across party lines. A 2005 National Journal survey of lawmakers ranked it No. 2 in a list of the 25 most powerful lobbies in Washington – ahead of the AFL-CIO and the National Rifle Association, but behind the American Association of Retired Persons.

          And the trial may be even more politically radioactive coming after publication of The Israel Lobby and U.S. Foreign Policy, a book which argued that the pro-Israel lobby distorts the public debate about Middle East policy and which has stirred bitter debate.

          There’s no denying the list of potential defense witnesses is a Who’s Who of administration officials. Over Justice Department objections, Judge T.S. Ellis III ruled the defense may call Secretary of State Condoleezza Rice; National Security Adviser Stephen J. Hadley, deputy National Security Adviser Elliot Abrams, former Deputy Secretary of State Richard L. Armitage, former Deputy Defense Secretary Paul Wolfowitz; and a dozen other Bush administration foreign policy officials.

          The defense aim is to show that information-sharing is a routine part of Washington life, and that the material passed on by Rosen and Weissman was already known by Israeli officials.

          It will argue that the two men simply listened to Franklin, and repeated information they heard, doing nothing more than “what members of the media, members of the Washington policy community, lobbyists and members of congressional staffs do perhaps hundreds of times every day,” according to a defense memorandum.

          The prosecution plans on calling top and former intelligence officials, including Dale Watson, who headed the FBI’s investigation of the Sept. 11, 2001, terror attacks; William McNair, the former information review officer for the CIA’s directorate of operations; and Brig. Gen. Paul A. Dettmer, assistant deputy chief of staff for intelligence, surveillance and reconnaissance in the U.S. Air Force, according to court filings.

          The prosecution argues that Rosen and Weissman received sensitive information from a mid-level Defense Department analyst, Lawrence A. Franklin, a U.S. Air Force Reserve colonel, whom they met in a series of DC-area restaurants.

          Franklin, a Catholic father of five who worked in the office of Douglas Feith, was a minor player in neocon circles who sought to build pressure for a more aggressive administration policy towards Iran, according to The New Yorker. His efforts included meetings with Rosen and Weissman, officials at the Israeli Embassy and efforts to reach out to Iranian dissidents.

          In 2001, he and Michael Ledeen, a prominent figure in the Iran-contra scandals of the Reagan administration, met secretly with the Iranian arms dealer Manucher Ghorbanifar in Italy, the man who had brokered Israeli missile sales to Iran in exchange for efforts to free American hostages in Lebanon in the deal that came to be known as Iran-Contra.

          Franklin had pleaded guilty to passing government secrets and was given more than 12 years in prison – a sentence likely to be reduced as a result of his cooperation after the upcoming trial. He is being represented by Plato Cacheris, the attorney who represented Fawn Hall, the former secretary to Oliver North, a key player in the hostages-for-arms deal, as well as CIA turncoat Aldrich Ames.

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          • #1.   Institute for Research 03.05.2008

            It is difficult to believe that a trial, which is fair to the defendants, and thorough on the part of the prosecution team, will actually move forward next month.

            1. AIPAC and founder Si Kenen came under extreme scrutiny by the Senate Foreign Relations Committee for operating as unregistered foreign agents in the 1960s, but nothing happened.

            2. AIPAC was found by the FBI to have negotiated the first ever US free trade agreement with purloined International Trade Organization documents; the agreement was signed anyway. FBI did not move forward.

            3. AIPAC was found to be coordinating political action committees in violation of its tax exempt status. AIPAC was found to be acting as a PAC, without disclosing donors, the case made it to the Supreme Court, but no action was taken and even that decades old case is still in limbo.

            4. Co-prosecutor Kevin DiGregory has just abandoned the case to take a job in the private sector (reminiscent of the golden parachute of Carol Lam in the US attorney firing scandal).

            5. AG Mukasey has been lobbied publicly by the Wall Street Journal to toss this prosecution, and likely privately from many different sides. The case may already be hobbled and “damaged goods” in the DOJ, which, like the administration, would probably rather see this all go away.

            History would indicate that this is the type of subject that doesn’t get a fair hearing in America. (data cited from the book “Foreign Agents: The American Israel Public Affairs Committee from the 1963 Fulbright Hearings to the 2005 Espionage Scandal”

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        • Linda Stein’s assistant accused of murder

          New York City police arrested the personal assistant to celebrity real estate broker Linda Stein today, charging her with murdering her boss by bludgeoning her with yoga equipment.

          Natavia Lowery, 26, confessed to killing Stein after Stein refused to stop blowing marijuana in her face, police said. Lowery told investigators that Stein had verbally abused her and that she had snapped. She said she repeatedly struck Stein with a yoga stick.

          Stein, former co-manager of the Ramones and real estate agent to the stars, was found dead last week in her apartment on Manhattan’s Upper East Side. Her many clients included Billy Joel, Sylvester Stallone and Debra Winger.

          Longtime friend Elton John is preparing a memorial service.

          Related story: Linda Stein, celebrity real estate agent, found murdered