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Tag: Madoff
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J. Ezra Merkin to give up control over hedge funds
Financier and philanthropist J. Ezra Merkin assented Tuesday to step down as manager of his hedge funds and to place them into receivership.
The step was demanded by New York Attorney General Andrew Cuomo, who brought civil charges against Merkin last month, accusing him of fraudulent concealment and misrepresentation for steering his clients’ money to Bernard Madoff without their knowledge or permission.
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MAP HINTS: Boxes with + signs can be expanded by doubleclicking. Solid lines are current relations. Dotted lines are former relations. For more options, right-click on a box or click on the map tools to the left. (Requires Flash)Merkin, the former chairman of GMAC and the scion of a prominent Jewish family, funneled $2.4 billion into Bernard Madoff Investment Securities, including millions from prominent institutions like Yeshiva University.
Some of his investors, including New York University, New York Law School and Mort Zuckerman’s charitable trust, have brought suit against him, as has the trustee liquidating Madoff’s firm.
The agreement, announced Tuesday in New York State Supreme Court, means that Merkin will no longer control his three hedge funds, Ascot, Gabriel and Ariel, from which he reportedly collected more than $470 million in fees over the last decade.
“Mr. Merkin is working closely with the New York Attorney General,” his attorney, Andrew Levander, said in a statement, adding that Merkin had agreed in principle to appoint Guidepost Partners as receivers for the funds while he remains available to consult regarding the wind-down.
Justice Richard Lowe gave Cuomo and Merkin until May 28 to finalize the agreement.
Despite his legal and financial woes, the Jewish Week reported that Merkin is the frontrunner expected to be elected chairman Wednesday of the tony Fifth Avenue Synagogue, which his father helped found.
Nobel Laureate Elie Wiesel, who lost most of the funds of his humanitarian foundation, as well as his personal savings, after investing with Madoff, will become one of two honorary chairmen.
Despite consternation in some quarters, the Jewish Week said that Merkin has not been publicly opposed, perhaps because he has been one of the synagogue’s primary benefactors.
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This post is tagged with: , Andrew Cuomo, Ariel, Ascot, Bernard Madoff Investment Securities, Elie Wiesel, Fifth Avenue Synagogue, Gabriel, GMAC, J. Ezra Merkin, Madoff, Mort Zuckerman, New York University, Recent StoriesRead related stories: Madoff · Recent Stories
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Spitzer’s mood darkens during state testimonyMay 21, 2009 at 9:48am
Two sides of former New York Gov. Eliot Spitzer’s personality are revealed in recently released transcripts of two interviews he gave on the same subject under oath last year.
Court-appointed trustee goes after Madoff family’s wealth
It looks like court-appointed Madoff trustee Irving Picard is going after the whole shebang: Not just Bernard Madoff’s Manhattan penthouse and home in the Hamptons, but also a good chunk of the wealth accumulated by his wife, brother and sons.
In his latest filing in U.S. Bankruptcy Court in New York, Picard argues that the convicted swindler used his firm, Bernard L. Madoff Investment Securities (BLMIS), “as his personal piggy bank” to support “a lavish lifestyle” for himself and his wife, as well as for his brother and other members of his family.
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MAP HINTS: Boxes with + signs can be expanded by doubleclicking. Solid lines are current relations. Dotted lines are former relations. For more options, right-click on a box or click on the map tools to the left. (Requires Flash)“Madoff used BLMIS to siphon funds which were, in reality, other people’s money, for his personal use and the benefit of his inner circle,” Picard says in the filing submitted Tuesday evening. “Plain and simple, he stole it.”
Picard, who is charged with returning as much money as possible to burned investors, contends that Madoff used money stolen from investors, for instance, to buy country club memberships for himself, his wife and one of his sons.
He also loaned $9 million to his brother, the firm’s chief compliance officer, in 2007, from one of the firm’s accounts, according to the papers. Picard said there is no evidence the loan was ever repaid. Peter Madoff’s wife, Marion, was also listed on the firm’s payroll with a salary of $163,500 in 2008, although there is no indication she did any work.
The firm also gave money to ventures begun by Madoff family members, including $1.7 million to Madoff Energy Holdings LLC, owned by Madoff’s sons Andrew and Mark, and his niece, Shana Madoff, the filing said.
The firm paid out $4.5 million to support Ruth Madoff’s real-estate-related investments through various entities under the name “Sterling,” with no benefit to Madoff’s firm or his customers, according to the papers.
Madoff placed his boat captain, his maid and his house-sitter in Florida on the firm’s payroll, and used the firm to provided corporate credit cards to his son’s wife and brother’s wife, even though they didn’t work for him, according to the filing.
More than $11.5 million was used to buy two yachts for the Madoff family, the filing said. Another $4.4 million appears to have been used by Andrew Madoff last October to purchase an Upper East Side apartment, while $6.5 million was loaned to Mark Madoff and his wife, Stephanie, last spring to purchase property on Nantucket, again with no evidence that any money was repaid.
Bernard Madoff, 71, was arrested Dec. 11 and pleaded guilty March 12 to running a $65-billion Ponzi scheme in which early investors were paid with the money of new clients. He is in jail, awaiting sentencing, and faces as much as 150 years in prison for various counts of securities fraud and other crimes.
Picard made the allegations in connection with his attempt to consolidate the bankruptcy proceedings of Madoff’s companies with those filed against Madoff by a group of investors.
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This post is tagged with: Andrew Madoff, Bernard L. Madoff Investment Securities, Bernard Madoff, Irving Picard, Madoff, Madoff Energy Holdings LLC, Mark Madoff, Peter Madoff, Recent Stories, Ruth Madoff, Shana MadoffRead related stories: Madoff · Recent Stories0 Comments
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Judge rejects hardship plea from ex-Detroit mayorMay 8, 2009 at 6:36pm
Convicted felon and former Detroit mayor Kwame M. Kilpatrick today lost a hardship bid to reduce $6,000 in monthly restitution payments to the city for his crimes.
J. Ezra Merkin sued for civil fraud in Madoff probe
J. Ezra Merkin, who steered more than $2 billion of investors’ money into Bernard Madoff Investment Securities – including millions from prominent institutions like Yeshiva University and New York University – was sued Monday for civil fraud.
In a 54-page complaint, New York Attorney General Andrew Cuomo charged the financier, philanthropist and former GMAC chairman with fraudulent concealment and misrepresentation, saying that Merkin steered money to Madoff without his clients’ knowledge or permission.
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MAP HINTS: Boxes with + signs can be expanded by doubleclicking. Solid lines are current relations. Dotted lines are former relations. For more options, right-click on a box or click on the map tools to the left. (Requires Flash)The complaint charges that Merkin was not the “investing guru” he claimed to be, but instead a “master marketer,” pocketing hundreds of millions in fees from his investors and failing to disclose his own conflicts of interest. The complaint said he earned an estimated $470 million in fees from his clients for essentially diverting all their funds to Madoff.
“Merkin profited enormously from Madoff’s scheme, reaping huge commissions while investors lost all their money,” Cuomo said.
Merkin began the Ascot fund in 1992 exclusively as “feeder” fund for Madoff, according to the complaint. Ascot grew to hold $1.7 billion from 300 investors by the end of December, 2008 – earning Merkin about $25.5 million a year in fees, the complaint said.
Over 10 percent of the funds came from non-profits, including New York Law School, Bard College, and charitable trusts set up by Holocaust survivor Elie Wiesel and New York Daily News owner Mort Zuckerman. Several of those investors have separately brought suit against Merkin.
Cuomo alleges that in conversations with investors, and in his quarterly reports, Merkin concealed the role Madoff played. In one presentation to a nonprofit investor, for instance, Merkin said that only 15 percent of Ascot was invested with Madoff, the complaint said. In reality, the entire fund was invested with thim.
“Merkin duped individual investors, non-profits, and charities into believing he was responsibly managing their investments, when in actuality he was dumping them into history’s largest Ponzi scheme.” Cuomo said.
Merkin sat on several prominent boards, including those of Carnegie Hall, the UJA-Federation, Yeshiva University and the Fifth Avenue Synagogue. Besides being a chairman of GMAC, the auto lender, he was a director of Cerberus, the private equity company.
The complaint contends that Merkin was aware of red-flags related to Madoff going back at least a decade, but persisted in investing with him nonetheless.
In the early 1990s, Victor Teicher, a money manager who had worked for Merkin, told him not to invest with Madoff because his steady returns were impossible, according to the complaint.
Merkin also allegedly knew of the tiny suburban New York accounting firm, Friehling & Horowitz, with one active accountant, that Madoff used – a red flag to many investors.
In his files, Merkin kept two 2001 news articles questioning Madoff’s returns – one published in Barron’s and one by a hedge fund newsletter called MARHedge, according to the complaint.
Merkin’s lawyer, Andrew Levander, released a prepared statement late yesterday, saying he was disappointed that Cuomo had filed what he called a “hasty and ill-conceived civil lawsuit, against which we intend to defend vigorously.”
Cuomo’s complaint is the second to charge a so-called Madoff feeder fund with fraud. Massachusetts regulators last week charged Fairfield Greenwich Group.
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Murtha seeks earmarks for PMA clients; Visclosky steers clearApril 8, 2009 at 1:41pm
Consider it a tale of two congressmen in the crosshairs.
Is the noose tightening around Peter Madoff?
Peter B. Madoff, the younger brother and business partner of convicted felon Bernard Madoff, is under increasing scrutiny from investigators, as well as victims of the $65 billion investor fraud.
The latest indication of the younger Madoff’s possible exposure comes from the report of one investor, who said that he withdrew a small sum entrusted to Bernard Madoff in July 1985, and received a $10,000 check drawn on the older Madoff’s bank account – but signed by Peter Madoff.
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The timing could prove crucial. In his guilty plea, Bernard Madoff stated that he had begun the fraud in the early 1990s “to the best of my recollection.” Authorities, however, date the scheme to the early 1980s, although they have not publicly revealed any evidence.
John R. Wing, a lawyer for Peter Madoff, 63, has said his client, who was the firm’s senior managing partner and chief compliance officer, had no knowledge of the fraud and has not been charged with any wrongdoing.
But yesterday, a New York State Supreme Court Justice Stephen A. Bucaria, sitting in Nassau County, imposed a temporary asset freeze on Peter Madoff’s accounts at the request of a law student from Dix Hills, NY. The law student, Andrew Ross Samuels, had been the beneficiary of a college trust fund, which was entirely lost to Madoff’s Ponzi scheme.
The freeze prohibits Peter Madoff from moving money from any bank, brokerage firm or other financial institution or from selling or borrowing against his physical assets. It also requires him to disclose the location of any assets he has “secreted” so far, and directs any financial institution to take “reasonable precautions” to ensure that he complies with the order.
Steven R. Schlesinger, a lawyer for Samuels, said that his client was the beneficiary of a $478,000 fund set up in 1997 by Samuel’s grandfather, Martin J. Joel Jr. and Peter Madoff as the trustees.
When Joel died in 2003, Peter Madoff became the sole trustee, and the entire fund was invested with Bernard L. Madoff Investment Securities, according to Schlesinger.
Besides investing the trust fund in what turned out to be a Ponzi scheme, Peter Madoff also did not notify Samuels that he could have terminated the trust in 2007, when he turned 21, the complaint says.
The lawsuit is at least the second brought against Peter Madoff since his brother’s arrest.
Last month, two children of N.J. Senator Frank Lautenberg filed an action against the younger Madoff, saying that as the firm’s senior managing partner and chief compliance officer, he either failed to spot “obvious, material red flags” of fraud, or covered them up.
The Lautenbergs, who had invested a family philanthropy as well as individual savings with Madoff’s firm, say they lost $7 million as a result of the scheme.
Peter Madoff joined his brother’s firm in 1970 after completing law school, and together they helped pioneer the computer-driven trading methods that culminated in the development of the electronic trading network known as the Nasdaq market.
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This post is tagged with: Andrew Ross Samuels, Bernard Madoff, Bernard Madoff Investment Securities, Frank Lautenberg, Madoff, Peter Madoff, Recent Stories, Stephen SchlesingerRead related stories: Madoff · Recent Stories1 Comments
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The common thread amongst Madoff, Standford and Charles Ponzi is (i) they all offered returns to investors that was higher than the competition’s and was seemingly too good to be true, (ii) they had outsized reputations for business acument and (iii) they “looked the part”. Corporate swindlers succeed within Corporate America because they have what is known as “executive presence” and they prey on corporations’ penchant for looking only at the surface of things. If a group of innercity kids can figure this out then I know adults can. To learn more go to http://www.newyorkshockexchange.com/content/view/85/37/
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Ruth Madoff got $2M from husband’s UK officeMarch 27, 2009 at 2:05pm
British investigators said Friday that Ruth Madoff got a $2 million payment from the London division of her husband’s securities firm just weeks before he was arrested for securities fraud.
Feds to go after Ruth Madoff’s money too
Ruth Madoff will not get any breaks: Federal authorities plan to go after more than $100 million in real estate, cash, art, autos, boats and other property owned by her and her husband Bernard Madoff, who pleaded guilty last week to running the largest Ponzi scheme in history.
The government said in a court filing Sunday that it intends to seize all the assets, including the Madoffs’ Upper East Side penthouse, which is in Ruth Madoff’s name, as well as their homes in Montauk, New York, Palm Beach, Florida, and France, whose combined worth has been put at $22 million.
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Madoff, 70, pleaded guilty March 12 to defrauding investors of as much as $65 billion and faces 150 years in prison. His attorneys filed a request with the U.S. Court of Appeals in New York that he be freed until his sentencing June 16.
The government’s “notice of intent to seek forfeiture” is not a seizure, but rather, alerts U.S. District Judge Denny Chin and the Madoffs that prosecutors intend to go after the possessions.
Lawyers for the Madoffs have previously argued that Ruth Madoff is the rightful owner of $69 million worth of cash and bonds, in addition to the Manhattan apartment, which they say are “unrelated” to her husband’s fraud.
To date, she has not been accused of any wrongdoing. However, her withdrawal of $15 million from a brokerage account a short time before her husband was arrested has increased the suspicion that she knew something of her husband’s crimes.
According to court documents filed Friday, the Madoffs had nearly a billion dollars in personal wealth at the end of last year which is now being eyed by defrauded investors trying to recoup the money they lost in Madoff’s scam.
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The Judicial system is missing the boat on this one. There is a deal that should be made with Madoff.
http://pacificgatepost.blogspot.com/2009/03/deal-to-make-with-madoff.html
The objective is NOT revenge, but Restitution and Reconstruction.
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Henry Kravis is at the door, knocking politelyMarch 18, 2009 at 9:17am
Buyout king Henry Kravis has been humbled, if only slightly.
Charges against Madoff leave many unanswered questions
Barring a change of heart, Bernard L. Madoff will plead guilty tomorrow to running a massive Ponzi scheme for at least a quarter century that defrauded thousands of people in virtually every corner of the globe.
Based on 11 charges unveiled for the first time last night, the disgraced financier would face a maximum sentence of 150 years in jail, and required restitution and fines of as much as $170 billion. That is the amount prosecutors believe moved through his accounts during the years he conducted the fraud, although there is no indication that Madoff has anywhere close to that sum.
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Lev L. Dassin, the acting United States attorney in Manhattan, said Tuesday that his staff was still unraveling the fraud to determine who besides Madoff might have helped.
“The filing of these charges does not end the matter,” Dassin said in a statement.
Dassin said he has made no agreement to seek leniency in return for Madoff’s guilty plea or his cooperation in the investigation.
The prosecutor’s release of charges offered some fresh information about how they believe Madoff conducted his scam. For starters, they up the total pricetag from his $50-billion estimate to nearly $65 billion – the amount that thousands of customers believed they had in their accounts at the time of his arrest.
And they date the fraud to as far back as the early 1980s, when they allege that Madoff assembled an ill-trained and inexperienced clerical staff, directed them to “generate false and fraudulent documents,” told lies and supplied phony records to regulators and shuffled hundreds of millions of dollars from bank to bank to create the illusion of active trading, according to the criminal information.
For the first time, they disclose that some investors were treated differently – a select group were offered returns as high as 45 percent, according to the criminal information
And they raise questions about the supposed separation between Madoff’s 17th-floor investment operation and the supposedly legitimate wholesale stock trading operation that his sons ran. Prosecutors charge that from at least 2002 through 2008, more than $250 million from investors in the Ponzi scheme was transferred into the operations of those other businesses.
They also allege that Madoff transferred money from his firm’s London office “to purchase property and services for the personal use and benefit” of himself, his family members and associates.
Madoff has been free on $10 million bail, but confined to his apartment, since his arrest in December. It is not clear whether the government will seek to have his bail revoked if he pleads guilty on Thursday.
The charges against him include securities fraud, investment adviser fraud, mail fraud, wire fraud, three counts of money laundering, false statements, perjury, false filings with the U.S. Securities and Exchange Commission, and theft from an employee benefit plan.
Even if Madoff pleads guilty as expected, the judge said he will not be sentenced for several months.
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Harvard Law ensconced at 1600 Pennsylvania Ave.March 12, 2009 at 11:55am
To save on travel expenses, the Harvard Law School Class of 1991 might as well have its reunion this year at the White House.
Madoff aide said to have ordered up fake trading tickets
Fresh details about the alleged billion-dollar Ponzi scheme run by Bernard L. Madoff are emerging as the accused swindler prepares for a possible guilty plea in federal court Thursday.
Annette Bongiorno, a longtime aide to Madoff, allegedly instructed two assistants to create trading tickets, now believed to be bogus, using research of daily share prices for blue-chip stocks, the Wall Street Journal reported today.
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The information comes from two assistants who were interviewed by federal authorities last month through so-called proffer agreements, in which prosecutors agree not to use their statements against them as long as they tell the truth, according to the Journal.
Such fact-gathering doesn’t mean that prosecutors will determine there was any criminal liability. To date, no one save for Madoff has been charged with a crime. The Journal report notes that large-scale fraud investigations often begin with lower-level employees to find out what they knew about the work of their supervisor or other managers, then continue to climb up the ladder
Bongiorno, 60, was once Madoff’s personal secretary and later oversaw some of the firm’s oldest accounts.
The role of another Madoff employee, chief financial officer Frank DiPascali, is also being examined as part of the ongoing probe, the Journal reports.
Bongiorno and DiPascali were longtime neighbors in the Howard Beach neighborhood of Queens, and she is said to have introduced him to Madoff, according to a Bloomberg News report.
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Harvard Law ensconced at 1600 Pennsylvania Ave.March 12, 2009 at 11:55am
To save on travel expenses, the Harvard Law School Class of 1991 might as well have its reunion this year at the White House.
Madoff to face his victims in court Thursday
This is the week that Bernard Madoff, the former NASDAQ chairman accused of perpetrating the biggest fraud in U.S. history, will confront his victims for the first time – and perhaps even acknowledge his own culpability.
On Thursday, at the second of two court hearings this week, the 70-year-old will come face to face with some swindled investors who until now, have had no place to air their fury and devastation.
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Last week, the trader waived his right to have a grand jury review the charges against him, setting the stage for a possible guilty plea Criminal-defense experts say a trial is unlikely in cases where prosecutors don’t seek a grand-jury indictment.
Should Madoff enter a guilty plea this week, it would be turned inside out for clues as to whether his wife, sons or business associates may also face prosecution. If, for instance, he tells the court that other people ‘known and unknown’ were involved in the fraud, that would increase their exposure.
Likewise, should he be charged with, or plead guilty to conspiracy, that would suggest that prosecutors plan to go after others, former federal prosecutor Steven Frankel told Newsday.
After his arrest Dec. 11, Madoff told authorities he acted alone in setting up a Ponzi scheme said to have involved tens of billions of dollars. But many have expressed skepticism that he could have pulled off a fraud on that scale without the notice, if not the assistance of others.
As for Madoff’s possible prison term , that would be a function of the crimes to which he pleads.
The charges are expected to include securities fraud, mail and wire fraud, and money laundering, Newsday reported. Securities fraud alone carries a maximum sentence of 25 years.
Federal prosecutors have also signaled they intend to go after Madoff’s assets, and filings indicate they will challenge defense attorney Ira Sorkin’s claim that Ruth Madoff should be entitled to keep $62 million in assets, in addition to their penthouse Manhattan apartment, valued at $7 million.
It’s not clear how many investors might attend the court hearing after U.S. District Judge Denny Chin invited victims late Friday to address the court.
Chin’s invitation was in response to papers filed by prosecutors asserting that victims had the right to be “reasonably heard at any public proceeding in the district court involving release, plea, sentencing, or any parole proceeding.”
Thousands lost money, among them many charitable institutions and schools. Prosecutors have asked anyone wishing to be heard to send an e-mail to usanys.madoff@usdoj.gov. by 10 a.m. Wednesday.
“There will be some fireworks,” Brad Friedman, a New York lawyer representing dozens of people who lost hundreds of millions of dollars, told the Associated Press. “But it’s not going to be blistering because it’s a courtroom. People will stand up in a respectful but forceful manner.”
Friedman said none of his clients have asked to attend next week’s hearing, and he’d advise them not to go.
“I just don’t think it accomplishes a lot,” he said. “You’re not going to make him feel bad.”Madoff is also scheduled to appear in court Tuesday when the judge to explore whether there is a conflict of interest involving defense attorney Ira Sorkin. Sorkin’s now-deceased father had an account with Madoff, and in 1992 the lawyer represented a Florida investment firm, Avellino & Bienes, that invested with Madoff.
Madoff is expected to tell the court he understands the potential conflicts and has decided to stick with Sorkin anyway, according to people familiar with the case.
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Prince Charles burnishes green credentialsMarch 11, 2009 at 4:51pm
Call him the Green Prince. Britain’s heir apparent is on a 10-day tour of Latin America to promote measures to combat climate change – and to raise his profile as a national ambassador.
Ruth Madoff seeks to keep NY penthouse, $62M in assets
The wife of accused swindler Bernard Madoff is arguing that their $7 million Manhattan penthouse and an additional $62 million in assets belong to her.
In court papers filed Monday in U.S. District Court in Manhattan, Ruth Madoff and her lawyer claim that the Upper East Side apartment, $45 million in municipal bonds and $17 million more in a separate account, all belong to her, rather than to her husband, who was charged with a $50 billion scheme to defraud investors.
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The papers were filed in connection with a U.S. District Court judge’s order Monday to partially lift a freeze on Madoff’s assets so that he could cooperate with a court-appointed trustee overseeing the liquidation of his firm to recover money for bilked investors.
To date, the trustee has said the Manhattan penthouse apartment and other properties in Montauk, N.Y. and Palm Beach, FL, which were used to secure Bernard Madoff’s bail, were off limits. But if there’s a conviction, those assets might be seized to help pay victims’ claims.
“We are looking at every member of the Madoff family,” David Sheen, an attorney representing the trustee said regarding the personal property.
Cohmad Securities, where Ruth Madoff says her account holds municipal bonds, had an office in Madoff’s headquarters in midtown Manhattan. The firm was part-owned by Bernard Madoff and has been alleged by the Massachusetts Securities Division to be a “feeder fund” to his investment firm.
Last month, Massachusetts regulators said Ruth Madoff withdrew $15.5 million from Cohmad Securities in November and December, including $10 million on the eve of her husband’s arrest for securities fraud.
She has not been charged with any wrongdoing, however, and is represented by the same attorney as her husband.
Bernard Madoff was arrested Dec. 11 and charged with securities fraud after authorities said that he confessed to his sons that he had carried out a Ponzi scheme for years, using new money from investors to pay off early investors, while issuing bogus statements claiming investment gains. He has been under house arrest in their Manhattan apartment.
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She does not deserve ANY of the money or properties unless she can prove beyond a shadow of doubt that it belongs to her and did not come from her husband or one of his numerous companies, which she probably can’t. of course she is one of the rich so normal rules do not apply.
If I had stolen lets say about $100,000.00 from my bosses and clients, would I be allowed to stay home? no my butt would be in jail so fast..
on the TV today, it was mentioned that Barack Obama is trying to get rid of prosperity… let me tell you prosperity is not 2% of the population making more money than they can EVER spend and the rest of us watching them complain about their lot in life. I am hopeful that his efforts will be successful but even if he fails, at least he tried to do something!! remember the last guy?!? seemed to spend most of his time with his head up his butt, telling everyone that thing were going well….
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FCC pick Genachowski is longtime Obama friend, adviserMarch 4, 2009 at 6:04pm
He is a law school friend of Obama’s and a successful, high-tech entrepreneur who looks to expand broadband service to rural and underserved areas, and to promote an open Internet and diverse media ownership.
‘Bag Lady’ Penney spins Madoff losses into gold
The Bag Lady may get to keep her expensive jewelry and her West Palm Beach cottage after all.
Alexandra Penney, the former editor-in-chief of Self magazine who has written about her travails as a rich-girl victim of Bernard Madoff’s in a blog called The Bag Lady Papers may have found a path out of penury.
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While her first-hand account of her financial devastation on Tina Brown’s Daily Beast website (”yesterday, I took my first subway ride in 30 years” ) exasperated some readers, it struck a chord with editors at Hyperion who apparently share some of her fears (”How am I going to iron those shirts [without Yolanda the maid] so I can still feel like a poor civilized person?”).
Hyperion Publisher Ellen Archer acknowledges that Penney’s blog resonated deeply with her.
“There are a lot of us, even those of us with paychecks, who are worried that we can end up on the streets,” Archer said. “Even those of us who haven’t invested with Bernie Madoff have taken a lot of financial hits and watching her navigate these difficult waters provides a lot of people with reassurance.”
To be fair to Penney, she does not pull any punches. She writes of growing up privileged – her mother was Greek royalty, her father was a Harvard lawyer – in “a WASPy Connecticut suburb.” But after leaving her husband, she says she made her own way, primarily by writing bestsellers such as How to Make Love to a Man.
Despite that success, she was haunted by the fear she would end up a bag lady on the streets – and after confiding that to a friend, got turned onto Madoff as a sort of financial insurance policy. Until the devastasting news of Madoff’s arrest on Dec. 11, that had seemed to be working for her. She was living as an artist with her own New York studio, doing the work she loved and, yes, diniing at the Four Seasons whenever she felt like it.
Now, thanks to her old network in publishing – and her resolve to go back to writing for a living – she may get to keep Yolanda the maid to iron all those shirts.
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There is a proverb in Japan that states “Nanakorobi Yaoki”.
Nana = Seven
Korubi = Fall Down
Ya = Eight
Oki = Stand Up
The proverb translates to, “Seven times down, eight times up”. It derives its origins from okiagari dolls, paper-mache toys than when knocked down, always return to an upright position. The dolls have no arms or legs and are also known as Daruma dolls.
Daruma (also known as Bodhidharma) was the first patriarch of Zen. He traveled from India to China in the sixth century. Legend has it that he sat in a cave meditating for nine years without moving, in order to obtain enlightenment. In the process, his legs withered to nothing and his hands shriveled away from lack of use. But he remained steadfast and seemed to get healthier with the passing years. Folklore suggests he finally died after vitally living eight hundred thirteen years.
The armless, legless Daruma dolls are weighted so they always pop up after being pushed down. They represent the resiliency and perseverance of Daruma. They stand for success after misfortune. Daruma dolls inspire you to rise no matter how many times you stumble or fall down. “Nana” in Japanese has a double meaning. It means “seven” but is also used to denote “many”.
So, “Nanakorobi Yaoki”, or “Seven times down, eight times up”, is a call to never give up. It is a celebration of your spirit, determination, and ability to not only land on your feet, but to also evolve, enjoy, and thrive.
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Feds probe firms close to Rep. John MurthaFebruary 13, 2009 at 10:46am
Another possible pay-to-play arrangement appears to be unraveling under public scrutiny – this one involving Rep. John Murtha, the powerful defense appropriator from Pennsylvania.
Ruth Madoff withdrew $15M before husband’s arrest
The wife of accused Wall Street swindler Bernard Madoff pulled millions out of a brokerage account only days before her husband was charged with securities fraud – including $10 million on the eve of his arrest, Massachusetts’ top securities regulator said Wednesday.
Massachusetts Secretary of State William Galvin said Ruth Madoff withdrew $5.5 million on Nov. 25 and $10 million on Dec. 10, according to reports produced by Cohmad Securities, a firm co-owned by her husband.
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Attorney Ira Sorkin, who represents both Madoffs, has said the financier admitted to his wife and their two sons only on Dec. 10 that his multibillion-dollar hedge fund was an elaborate Ponzi scheme. The 70-year-old mogul was arrested and charged with securities fraud on Dec. 11. Madoff told authorities he acted alone in confessing to the fraud, prosecutors have said.
But the revelation of Ruth Madoff’s withdrawals raises fresh questions about what she knew and when she knew it.
The information about her withdrawals was made public today as part of a lawsuit that Calvin brought against Cohmad Securities in an effort to revoke its Massachusetts brokerage license.
For years, Cohmad Securities, partly owned by Madoff, was a major conduit into his Ponzi scheme and received monthly payments from him for “professional services”, “brokerage services” and “fees for account supervision,” Galvin’s office said.
The payments totaled $67 million and made up 84 percent of Cohmad’s total income over the last eight years, the documents show.
That sum does not include commissions paid to broker Robert M. Jaffe, according to the complaint, because Cohmad did not respond to requests for that information.
Jaffe – a member of the wealthy Shapiro clan, major philanthropic donors in Boston and Palm Beach, Fla. – appeared under subpoena before Massachusetts regulators last week, but invoked his rights under the Fifth Amendment, declining to answer questions about his business, Cohmad, or his connection to Madoff Investments, according to the complaint.
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This post is tagged with: Bernard Madoff, Cohmad Securities, Ira Sorkin, Madoff, Recent Stories, Robert Jaffew, Ruth MadoffRead related stories: Madoff · Recent Stories1 Comments
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That’s right – follow the money – doesn’t it make you wonder how much money Ellen Jafee, wife of Robert Jaffee, withdrew in the days leading up to the Madoff confession? How about withdrawals by the wife of the head of Fairfield Securities in Conn?
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Judd Gregg withdraws as commerce secretary nomineeFebruary 12, 2009 at 5:23pm
Republican Sen. Judd Gregg of New Hampshire withdrew his nomination as commerce secretary Thursday, citing “irresolvable conflicts” with President Barack Obama over his stimulus plan and handling of the 2010 census.
Cohmad Securities, Robert Jaffe face tough questions about Madoff ties
Investigators probing Bernard Madoff’s alleged $50-billion scheme are looking at the role played by an investment firm that he co-founded with an old friend from Long Island that recruited hundreds of investors from New York, Boston and Florida.
Cohmad Securities and its vice president, Robert Jaffe of Palm Beach and Boston, have already been subpoenaed by Massachusetts regulators in connection with the federal investigation of Bernard L. Madoff Investment Securities.
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Cohn, a benefactor of Long Island’s North Shore-Long Island Jewish Health System, owns about 80 percent of Cohmad, according to the Wall Street Journal; Madoff is a minority stakeholder, along with Cohn’s daughter, Marcia, and Madoff’s brother, Peter.
Another stakeholder is Jaffe, a debonair philanthropist who helped recruit dozens of investors from his stomping grounds around the Palm Beach Country Club and the suburbs of Boston.
Jaffe, who is listed as Cohmad’s vice president, has another major tie to Madoff: He is married to Ellen Shapiro Jaffe, daughter of 95-year-old apparel mogul Carl Shapiro, a decades-old friend of Madoff’s who was one of his earliest and largest investors. By the end, Shapiro is said to have had $545 million with Madoff.
It’s a strange turnabout for Jaffe, a 64-year-old bon vivant who was sought out in Palm Beach high society, at least in part because he could deliver access to Madoff whose legendary fund guaranteed steady, if unremarkable returns.
A champion golfer with multiple country club memberships, Jaffe seems to have done many of his deals on the golf course or on the party circuit.
He is also a fixture of the philanthropic worlds of both Palm Beach and Boston, where he rubbed shoulders with prospective investors on boards ranging from the Palm HealthCare Foundation, which he chairs, to the American Cancer Society’s Palm Beach chapter to Boston’s Beth Israel Deaconess Medical Center.
“He was a very fastidious dresser. Never had a hair out of place,” Richard Rampell, a Palm Beach accountant told Reuters. “He stands ram-rod straight and has sort of a dashing presence,” Rampell added, likening him to characters found in novels by F. Scott Fitzgerald, author of The Great Gatsby.
But if Jaffe helped Madoff recruit an ever-expanding list of high-net-worth clients, he is now a target of fury.
At the ritzy Mar-a-Lago Club, an angry investor who lost millions with Madoff confronted Jaffe at a party last month. His son’s engagement party at the Palm Beach Country Club was abruptly canceled. And after he failed to show up for an interview with Massachusetts regulators Tuesday, the secretary of state filed suit to force Jaffe to testify.
A spokesman for Jaffe said he is under a “doctor’s care” and that he had no knowledge of the alleged fraud and was a victim himself.
“Was he out selling Madoff? Yes. Did he use his contacts to sell the product? Yes. But he’s as much a victim,” Lawrence Sperber, a Boston lawyer who has a home in Palm Beach and has known Jaffe for more than 40 years, told the Boston Globe. “I don’t think he had any idea. And he’s messed up his relationship with the rest of the world.”
Cohmad’s filings show that the company, which had fewer than 650 client accounts, made 99.7% of its sales from brokerage services to Madoff’s larger broker-dealer, according to the Journal.
In its audited financial statements for the 12 months ending June 30, 2008, Cohmad said revenue from Madoff Securities totalled $3,736,829. Its total sales for the same period were $3,748,397.
Steven Paradise, a Vinson & Elkins lawyer representing Sonny and Marcia Cohn, denied that either of them knew of the alleged fraud or solicited investors for Madoff – and that both had lost money with him. “To the extent Mr. Jaffe was soliciting investors for Madoff, he was not doing so through or for Cohmad,” he said, adding that Cohmad paid rent to Madoff to lease its space.
Madoff, 70, was charged Dec. 11 with securities fraud for allegedly running a Ponzi scheme — paying one set of investors with money from another. He is free on $10 million bail, pending trial.
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Apple’s Timothy Cook steps up – againJanuary 16, 2009 at 11:14am
The news that Steve Jobs will be taking medical leave from Apple Inc. has once again thrust Timothy D. Cook, Apple chief operating officer, onto center stage.
Are Madoff’s attorneys cutting a deal?
Bernard Madoff may be negotiating a guilty plea.
Federal prosecutors acknowledged in a court order released Monday that Madoff’s lawyer, Ira Sorkin, is “engaging in discussions concerning a possible disposition of this case,” the New York Times reports.
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Sorkin declined to discuss his strategy but several former prosecutors told the Times that the language indicated that the discussions were about a deal in which Madoff would agree to plead guilty in exchange for some type of leniency.
“He’s trying to cut a deal,” said Marvin G. Pickholz, a former securities regulator. “The only other possible ‘disposition’ that could be negotiated would be for the government to drop the whole case – and that’s not going to happen.”
However, Newsday’s Anthony Destefano cited an unnamed source saying that any discussions were in the early stages and that no plea deal was imminent.
The information about the discussions was contained in an order, signed by the U.S. Magistrate Ronald L. Ellis, that approved a 30-day delay in a hearing on Madoff’s case. That order also denied prosecutors’ request that Madoff be jailed until he can be tried because they deem him a flight risk. Prosecutors said they plan to appeal.
The judge’s ruling allows Madoff to remain free in his Manhattan penthouse, wearing an electronic monitoring device and being watched by a security team paid for by his wife.
Ellis wrote that he was not satisfied that the government had proved “by clear and convincing evidence” that jailing Madoff was necessary to ensure he did not flee or obstruct justice. He added several requirements to the bail conditions, among them, requiring Madoff to compile an inventory of all “valuable portable items” in his Manhattan apartment.
A security firm that is already watching him around the clock will be required to check that inventory every two weeks.
Madoff was arrested Dec. 11 and charged with one count of securities fraud, but he has not yet been indicted.
Under federal court rules, Monday would have been the deadline for a hearing at which the prosecution would have had to show “probable cause” for Madoff’s arrest. But both sides agreed to postpone that deadline for at least a month – an indication that discussions about a possible plea deal are taking place.
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The Tribe will protect this guy? HAHAHA. I would think, they should feed him to the wolves. But I suppose, once he has bribed most politicians, they stay bought no matter what. Ask Marc Rich about this!
A guy in California who steals a pizza can go to prison for life with the three strikes and you are in laws. While a rich man can bribe politicians, break many laws, destroy the entire economic/financial systems of the world and pull the biggest heist in history…and stay home in his expensive pad, trying to mail jewelry to friends?
But then, Bush and Cheney could get away with committing vast war crimes and killing millions of people so I suppose, we have to keep things in perspective. Arrest them all!
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Justice for the rich and justice for the poor==Amerikka, you gotta love it. Bernie has to tell us where he hid 50 billion. It’s impossible to hide 50 million much less 50 billlion! Did some of it find its way to the Middle East Bernie?
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Apple’s Timothy Cook steps up – againJanuary 16, 2009 at 11:14am
The news that Steve Jobs will be taking medical leave from Apple Inc. has once again thrust Timothy D. Cook, Apple chief operating officer, onto center stage.
After years of complaints about Madoff, Harry Markopolos is vindicated
Harry Markopolos is being called the Deep Throat of the Bernard Madoff scam. He describes himself as “the boy who cried wolf.”
In his case, the wolf was real, and no matter how many times Markopolos cried out, the Securities and Exchange Commission did little.
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In the succeeding weeks, Markopolos, a former investment officer with Rampart Investment, has become known as a financial Cassandra for his repeated warnings about Madoff’s operations.
He began complaining years ago, his insights culminating in May 2005, with what financial writer Michael Lewis and hedge fund manager David Einhorn described in the New York Times Saturday as a “devastatingly persuasive 17-page letter” to the SEC.
Either Madoff was front-running customer orders – essentially taking orders, assigning winners to the Madoff company portfolio and passing losing investmens to the customer.
Or Madoff was conducting what Markopolos labelled “the world’s largest Ponzi scheme.” It appears that scenario two, which Markopolos described as “highly likely” was Madoff’s mode of operation.
Markopolos used mathematics to dissect Madoff’s investment strategy, and concluded that it couldn’t possibly work. He also questioned the secrecy surrounding the Madoff operation.
“Only Madoff family members are privy to the investment strategy,” he noted in his 2005 letter to the SEC. “Name one other prominent multi-billion dollar hedge fund that doesn’t have outside, non-family professionals involved in the investment process. You can’t because there aren’t any.
“…Either (Bernard Madoff) is the world’s best stock and options manager that the SEC and the investing public has never heard of or he’s a fraud.”
The SEC did follow up on Markopolos’ tips, investigating Madoff, but it found no evidence of front running or of a Ponzi scheme. It found a few technical violations, which Madoff reportedly corrected.
In his 2005 letter, Markopolos predicted the likely fallout if Madoff Investments turned out to be a Ponzi scheme, likening it to a category 2-3 hurricane. The storm, he said, would include panic selling, implosion of hedge funds and damage to European markets because of the number of French and Swiss banks investing in Madoff.
There’s a slight trace of crackpot in Markopolos’ writing style. Indeed, there was so much money to go around in the boom years that few but the eccentrics complained. And few regulators paid any attention.
However, Markopolos backed up his claims with facts and he took care to mention a May 2001 Barron’s article by reporter Erin E. Arvedlund that raised questions about Madoff’s secretive investment methods.
He also cited a variety of off-the-record financial community sources who reportedly had steered clear of Madoff.
“I kept firing bigger and bigger bullets but I couldn’t stop him,” he told the Wall Street Journal. His frustration finally ended with Madoff’s arrest on Dec. 18.
Muckety writer A. James Memmott contributed to this story.
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Madoff is made for HollywoodFebruary 5, 2009 at 11:55am
With the emergence of a hero yesterday on Capitol Hill, casting of Bernie Madoff the Movie would seem to be complete.
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