This post was archived from createpositivechange.org/. View the original on the Wayback Machine.
Tag: Madoff
-
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.
Hint: Doubleclick on boxes with plus signs to expand, or click the tool bar at left for more options.
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.
Click here to sign up for the Muckety Newsletter
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
-
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.
Hint: Doubleclick on boxes with plus signs to expand, or click the tool bar at left for more options.
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.
Click here to sign up for the Muckety Newsletter
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
-
There are no comments yet, be the first by filling in the form below.
Leave a Comment
-
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.
Hint: Doubleclick on boxes with plus signs to expand, or click the tool bar at left for more options.
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.
Click here to sign up for the Muckety Newsletter
This post is tagged with: Andrew Cuomo, Ascot Fund, Bernard L. Madoff Investment Securities, Bernard Madoff, Ezra Merkin, Madoff, Mort Zuckerman, New York University, Recent Stories, Yeshiva UniversityRead related stories: Madoff · Recent Stories0 Comments
-
There are no comments yet, be the first by filling in the form below.
Leave a Comment
-
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.
Hint: Click in map to explore connectionsStory continues below interactive map
MAP HINTS: Click expands a name. Control+Click centers map on a name. Solid lines are current relations. Dotted lines are former relations. For advanced tools choose Tools > Options from the menu at top. More help. Not seeing the maps? Please go here to check for the latest version of Java.The investor provided a copy of the check to the New York Times, but asked not to be identified to guard his family’s privacy. The investor said that others in his family had also received checks with Peter Madoff’s signature in the mid-1980s, although later checks were signed only by Bernard Madoff.
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.
Click here to sign up for the Muckety Newsletter
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
-
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/
Leave a Comment
-
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.
Hint: Click in map to explore connectionsStory continues below interactive map
Click to activate interactive map
(requires Java)MAP HINTS: Click expands a name. Control+Click centers map on a name. Solid lines are current relations. Dotted lines are former relations. For advanced tools choose Tools > Options from the menu at top. More help. Not seeing the maps? Please go here to check for the latest version of Java.Other items sought by prosecutors include $17 million in cash and $45 million in bonds held in Ruth Madoff’s name, several yachts, all bearing names ending in “Bull,” four cars, silverware valued at $69,000 and a Steinway piano worth $39,000.
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.
Click here to sign up for the Muckety Newsletter
This post is tagged with: Bernard L. Madoff, Bernard L. Madoff Investment Securities, Madoff, Recent Stories, Ruth MadoffRead related stories: Madoff · Recent Stories1 Comments
-
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.
Leave a Comment
-
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.
Hint: Click in map to explore connectionsStory continues below interactive map
Click to activate interactive map
(requires Java)MAP HINTS: Click expands a name. Control+Click centers map on a name. Solid lines are current relations. Dotted lines are former relations. For advanced tools choose Tools > Options from the menu at top. More help. Not seeing the maps? Please go here to check for the latest version of Java.Yet the criminal information leaves the biggest questions about the scam unanswered – whether family members and colleagues were involved, where most of the money went, and what, if any, knowledge those running several large feeder funds may have had.
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.
Click here to sign up for the Muckety Newsletter
This post is tagged with: , Bernard L. Madoff, Bernard L. Madoff Investment Securities, Madoff, Recent StoriesRead related stories: Madoff · Recent Stories0 Comments
-
There are no comments yet, be the first by filling in the form below.
Leave a Comment
-
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.
Hint: Click in map to explore connectionsStory continues below interactive map
Click to activate interactive map
(requires Java)MAP HINTS: Click expands a name. Control+Click centers map on a name. Solid lines are current relations. Dotted lines are former relations. For advanced tools choose Tools > Options from the menu at top. More help. Not seeing the maps? Please go here to check for the latest version of Java.The “tickets” would show purported trades that Madoff made, which were in line with the annual profit reports Madoff issued to investors.
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.
.
Click here to sign up for the Muckety Newsletter
This post is tagged with: Annett Bongiorno, Bernard L. Madoff, Bernard L. Madoff Securities Investment, Frank DiPascali, Madoff, Recent StoriesRead related stories: Madoff · Recent Stories0 Comments
-
There are no comments yet, be the first by filling in the form below.
Leave a Comment
-
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.
-
0 Comments
There are no comments yet, be the first by filling in the form below.
Leave a Comment