New York: $50 billion fraud - Madoff

Discussion in 'North American scam news' started by Gentle Giant, Dec 12, 2008.

  1. Gentle Giant

    Gentle Giant Giant Admin for a Day Staff Member

    And they can't bail out the car industry....:rolleyes:

    Some photos at : http://antifraudintl.org/threads/bernard-bernie-madoff.21980

    NEW YORK (Reuters) – Bernard Madoff, a quiet force on Wall Street for decades, was arrested and charged on Thursday with allegedly running a $50 billion "Ponzi scheme" in what may rank among the biggest fraud cases ever.

    The former chairman of the Nasdaq Stock Market is best known as the founder of Bernard L. Madoff Investment Securities LLC, the closely-held market-making firm he launched in 1960. But he also ran a hedge fund that U.S. prosecutors said racked up $50 billion of fraudulent losses.

    Madoff told senior employees of his firm on Wednesday that "it's all just one big lie" and that it was "basically, a giant Ponzi scheme," with estimated investor losses of about $50 billion, according to the U.S. Attorney's criminal complaint against him.

    A Ponzi scheme is a swindle offering unusually high returns, with early investors paid off with money from later investors.

    On Thursday, two agents for the U.S. Federal Bureau of Investigation entered Madoff's New York apartment.

    "There is no innocent explanation," Madoff said, according to the criminal complaint. He told the agents that it was all his fault, and that he "paid investors with money that wasn't there," according to the complaint.

    The $50 billion allegedly lost would make the hedge fund one of the biggest frauds in history. When former energy trading giant Enron filed for bankruptcy in 2001, one of the largest at the time, it had $63.4 billion in assets.

    U.S. prosecutors charged Madoff, 70, with a single count of securities fraud. They said he faces up to 20 years in prison and a fine of up to $5 million.

    The Securities and Exchange Commission filed separate civil charges against Madoff.

    "Our complaint alleges a stunning fraud -- both in terms of scope and duration," said Scott Friestad, the SEC's deputy enforcer. "We are moving quickly and decisively to stop the scheme and protect the remaining assets for investors."

    Dan Horwitz, Madoff's lawyer, told reporters outside a downtown Manhattan courtroom where he was charged, "Bernard Madoff is a longstanding leader in the financial services industry. We will fight to get through this unfortunate set of events."

    A shaken Madoff stared at the ground as reporters peppered him with questions. He was released after posting a $10 million bond secured by his Manhattan apartment.

    Authorities, citing a document filed by Madoff with the U.S. Securities and Exchange Commission on January 7, 2008, said Madoff's investment advisory business served between 11 and 25 clients and had a total of about $17.1 billion in assets under management. Those clients may have included other funds that in turn had many investors.

    The SEC said it appeared that virtually all of the assets of his hedge fund business were missing.

    CONSISTENT RETURNS
    An investor in the hedge fund said it generated consistent returns, which was part of the attraction. Since 2004, annual returns averaged around 8 percent and ranged from 7.3 percent to 9 percent, but last decade returns were typically in the low-double digits, the investor said.

    The fund told investors it followed a "split strike conversion" strategy, which entailed owning stock and buying and selling options to limit downside risk, said the investor, who requested anonymity.

    Jon Najarian, an acquaintance of Madoff who has traded options for decades, said "Many of us questioned how that strategy could generate those kinds of returns so consistently."

    Najarian, co-founder of optionmonster.com, once tried to buy what was then the Cincinnati Stock Exchange when Madoff was a major seatholder on the exchange. Najarian met with Madoff, who rejected his bid.

    "He always seemed to be a straight shooter. I was shocked by this news," Najarian said.

    'LOCK AND KEY'
    Madoff had long kept the financial statements for his hedge fund business under "lock and key," according to prosecutors, and was "cryptic" about the firm. The hedge fund business was located on a separate floor from the market-making business.

    Madoff has been conducting a Ponzi scheme since at least 2005, the U.S. said. Around the first week of December, Madoff told a senior employee that hedge fund clients had requested about $7 billion of their money back, and that he was struggling to pay them.

    Investors have been pulling money out of hedge funds, even those performing well, in an effort to reduce risk in their portfolios as the global economy weakens.

    The fraud alleged here could further encourage investors to pull money from hedge funds.

    "This is a major blow to confidence that is already shattered -- anyone on the fence will probably try to take their money out," said Doug Kass, president of hedge fund Seabreeze Partners Management. Kass noted that investors that put in requests to withdraw their money can subsequently decide to leave it in the fund if they wish.

    Bernard L. Madoff Investment Securities has more than $700 million in capital, according to its website.

    Madoff remains a member of Nasdaq OMX Group Inc's nominating committee, and his firm is a market maker for about 350 Nasdaq stocks, including Apple, EBay and Dell, according to the website.

    The website also states that Madoff himself 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."

    The company's website may be found here: http://www.madoff.com/

    (Additional reporting by Christian Plumb, Phil Wahba, Michelle Nichols and Jennifer Ablan in New York and Rachelle Younglai in Washington; Editing by Andre Grenon, Bernard Orr and Alex Richardson)

    http://news.yahoo.com/s/nm/20081212/bs_nm/us_madoff_arrest
     
  2. Central Scrutinizer

    Central Scrutinizer Administrator Staff Member

    This guy sounds like a real dirtbag.

    Top investors 'hit by $50bn con'
    Saturday, 13 December 2008

    Some of the world's wealthiest private and corporate investors are reported to be victims of an alleged $50bn fraud by Wall Street broker Bernard Madoff.

    Mr Madoff is alleged to have confessed to a huge Ponzi scheme (pyramid fraud).

    Reports say the main owner of the New York Mets baseball team, Fred Wilpon, and former American football team owner Norman Braman are among the victims.

    Others facing losses reportedly include French bank BNP Paribas, Japan's Nomura Holdings and Zurich's Neue Privat Bank.

    Prosecutors say Mr Madoff, ex-head of the Nasdaq stock market, has described the fraud as "one big lie".

    A federal judge has appointed a receiver to oversee Mr Madoff firm's assets and customer accounts, while the 70-year-old banker has been released on $10m bail.

    Shares drop
    Hundreds of people are thought to have invested with Mr Madoff, among them international banks, hedge funds and wealthy private investors - who are all trying to find out the cost of the alleged fraud.

    Spanish newspapers said the leading bank Santander had invested with Mr Madoff.

    Bramdean Alternatives, a UK-based asset management company run by Nicola Horlick, saw its share value drop by over 35% after it revealed that nearly 10% of its holding was exposed to the New York broker.

    One hedge fund, Fairfield Greenwich Group, said its clients had invested $7.5bn with the firm.

    'Major disaster'
    Lawyers for worried investors fearful that they had lost their savings, attended court on Friday for a hearing on the disposition of Mr Madoff's remaining assets.

    The hearing was cancelled after an agreement was reached to appoint a receiver.

    Brad Friedman, a lawyer for some of the investors, said: "There are people who were very, very well off a few days ago who are now virtually destitute.

    "They have nothing left but their apartments or homes - which they are going to have to sell to get money to live on," he told the New York Times.

    One investor, Lawrence Velvel, 69, told the Associated Press that he and a friend may have lost millions of dollars between them.

    "This is a major disaster for a lot of people. You work all your life, you finally manage to save up something ... lots of people are getting fully or partially wiped out."

    'Pyramid scheme'
    Mr Madoff founded Bernard L. Madoff Investment Securities in 1960, but also ran a separate hedge fund business.

    According to the US Attorney's criminal complaint filed in court, Mr Madoff told at least three employees on Wednesday that the hedge fund business - which served up to 25 clients and had $17.1bn under management - was a fraud and had been insolvent for years, losing at least $50bn.

    He said he was "finished", that he had "absolutely nothing" and that "it's all just one big lie", and that it was "basically, a giant Ponzi scheme", the complaint said.

    He told them that he planned to surrender to the authorities but not before he used his last $200m-$300m to pay "selected employees, family and friends".

    Under a Ponzi scheme, also known as a pyramid scheme, investors are promised very high returns on their investment, while in reality early investors are paid with money collected from later investors.

    If found guilty, US prosecutors say he could face up to 20 years in prison and a fine of up to $5m.

    http://news.bbc.co.uk/2/hi/business/7781086.stm
     
  3. Spidey

    Spidey Ninja

    This thing is so huge they haven't even figured out how bad it is.
     
  4. Kat

    Kat Administrator Staff Member

    Oh this just gets better and better. If found guilty he could get 20 years?!?!? He should be cleaning up Three Mile Island, with a mop and a bucket!

    Banks hit worldwide by US fraud
    BBC, Monday, 15 December 2008

    Some of the world's biggest banks have revealed that they are victims of a fraud which has lost $50bn (£33bn).

    Bernard Madoff has been charged with fraud in what is being described as one of the biggest-ever such cases.

    Among the banks which have been affected are Britain's RBS, Spain's Santander and France's BNP Paribas.

    One of the City's best-known fund managers has criticised US financial regulators for failing to detect the alleged fraud.

    'Financial scandal'
    Nicola Horlick, boss of Bramdean investments, said US regulators had "fallen down on the job".

    Mrs Horlick told the BBC: "I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they haven fallen down in the job."

    "This is the biggest financial scandal, probably in the history of the markets - $50bn is a huge amount of money," she said.

    Among those financial institutions which have so far announced investments with Bernard Madoff:

    * The Royal Bank of Scotland said on Monday it could potentially lose about £400m from the alleged fraud, if all its investments had to be written off
    * Spain's largest bank, Santander, which also owns the UK High Street banks Abbey, Alliance & Leicester and Bradford & Bingley, said one of its funds had $3.1bn invested in the firm run by Bernard Madoff
    * France's BNP Paribas estimated its exposure to be more than $460m
    * The French bank, Natixis, a subsidiary of Caisse d'Epargne and Banque Populaire, said it could potentially lose up to 450m euros (£402m; $605m)
    * One of the world's biggest investment groups, Man, said it had invested about $360m through its RMF institutional fund of funds business, representing 0.5% of its total funds
    * Japanese bank Nomura said its exposure was relatively small, at about 27.5bn yen (£201m), and added: "We regard this as non-material, considering our capital base."

    'Systemic failures'
    Mrs Horlick said 9% of Bramdean's funds were invested with Mr Madoff, but she said even if the money was written off, the fund involved would be down just 4%.

    just want to make it clear to investors that even after this, they they would have done extremely well, relative to anything else they could have invested in," she said.

    In a statement, Bramdean said: "It is astonishing that this apparent fraud seems to have been continuing for so long, possibly for decades, while investors have continued to invest more money into the Madoff funds in good faith.

    "The allegations made appear to point to a systemic failure of the regulatory and securities markets regime in the US."

    Correspondents say the case is likely to fuel uncertainty about the entire hedge fund industry.

    US prosecutors say Mr Madoff, a former head of the Nasdaq stock market, masterminded a fraud of massive proportions through his hedge fund and investment advisory business.

    Mr Madoff is alleged to have used money from new investors to pay off existing investors in the fund.

    A federal judge has appointed a receiver to oversee Mr Madoff firm's assets and customer accounts, while the 70-year-old banker has been released on $10m bail.

    High returns promised
    Mr Madoff founded Bernard L Madoff Investment Securities in 1960, but also ran a separate hedge fund business.

    According to the US Attorney's criminal complaint filed in court, Mr Madoff told at least three employees on Wednesday that the hedge fund business - which served up to 25 clients and had $17.1bn under management - was a fraud and had been insolvent for years.

    He said he was "finished", that he had "absolutely nothing" and "it's all just one big lie", and that it was "basically, a giant Ponzi scheme", the complaint said.

    Under a Ponzi scheme, which is similar to pyramid schemes, investors are promised very high returns on their investment, while in reality, early investors are paid with money collected from later investors.

    If found guilty, US prosecutors say he could face up to 20 years in prison and a fine of up to $5m.

    http://news.bbc.co.uk/2/hi/business/7783236.stm
     
  5. Sphinx

    Sphinx Administrator Staff Member

    Maybe a few hundred billion more dollars to bail out some banks.....
     
  6. Kat

    Kat Administrator Staff Member

    Madoff relied on 'irrational euphoria'

    BBC, Wednesday, 17 December 2008
    By Kevin Connolly
    BBC News, Washington

    If I had a dollar for every news story in which the golden rule of investment has been dusted off and repeated over the last five days, I would be able to pay back Bernie Madoff's investors myself.

    If something sounds too good to be true, I keep reading, that must be because it is too good to be true.

    It is good advice as far as it goes and it raises the question of why so many wealthy, sophisticated savers were apparently conned into believing that Mr Madoff had come up with an investment strategy that allowed him to pay handsome returns even when the stock market was falling.

    I asked a very senior regulator about this, a man who has been involved in formulating public policy for many years, and he said the answer was depressingly simple.

    People are prone to believe what they want to believe, he said, and in rising markets a kind of irrational euphoria takes hold in which we are not inclined to ask difficult questions.

    Human psychology
    The point about Bernie Madoff was not so much what he was selling, it was how he sold it.

    On offer was a fairly standard hedge fund arrangement in which the Madoff firm bought stock in a company and then hedged against the risk by striking contracts to both buy and sell shares in the company at agreed dates in the future.

    In the jargon of Wall Street that is a "collar". It is perfectly legal, but it requires endless resources of luck, judgement, money and timing.

    What made Mr Madoff unusual was the manner in which he recruited his investors.

    For that he relied on a powerful but elementary piece of human psychology: the more someone tells you that you cannot have something, the more you want it.

    Membership of the Madoff fund was very strictly by invitation only - merely being rich was not enough in itself.

    Clients were recruited through the social networks of which Mr Madoff and his wife were themselves members - many were Jewish New Yorkers who spent part of the year in Florida.

    Others came across the charming, wealthy, discreet giant of Wall Street at the golf club or the yachting marina.

    The very respectability of the clientele helped with further recruitment.

    Madoff customers were directors of charities and managers of investment funds as well as wealthy business people and pensioners.

    They were mainly, in other words, people who should have known better and they fell for one of the oldest illusions in the book: that there is an inside track in the world of investment.

    Mr Madoff fed that illusion, and offered himself as the man who could offer you access to that magic, secret circle.

    Too respectable
    The giant bailout of the American financial system earlier this year introduced the concept of the bank that is "too big to fail", in other words, is of such importance to the world's financial system that governments decide that propping it up with public money is better than allowing it to suffer the consequences of its own greed or incompetence.

    In his own way, Mr Madoff was something similar - an investment adviser who was too respectable to scrutinise.

    As former chairman of the Nasdaq stock exchange, Mr Madoff was a huge figure on Wall Street - his thoughtful analysis of how modern regulatory systems made cheating virtually impossible has been one of the most-viewed clips on YouTube in the last few days.

    The regulatory authorities, now that they have finally woken up, are now assessing how much of Mr Madoff's clients' money has actually been lost and how much if any might be recovered.

    The particular nature of the alleged fraud means, however, that existing clients seem to have been paid out of money taken from new customers as they joined the scheme. That probably means that if Mr Madoff owes you money at the moment, the chances are that you will not be getting back.

    It is not clear how many people working for Mr Madoff knew what he was really up to with the funds collected from wealthy investors.

    It has been widely reported that he operated this side of his business on a separate floor of the Manhattan skyscraper where his main company was based and it is even possible that he did not tell anyone else what was really going on until he explained it to his sons last week.

    The court proceedings that grow out of all of this are likely to be complex and highly technical, but a friend of mine who works in the banking sector says the best way of understanding Mr Madoff is to compare him to the kind of racing tipsters who advertise their services in the back of sporting newspapers.

    They too offer inside knowledge in return for a fee and should be asked the same question that more people should have asked Mr Madoff - if this scheme for making money is really so good, why sell it at all?

    Why not simply use the technique to make money yourself?

    I asked the regulator if the world would learn a lesson from the Madoff case and, depressingly, he was doubtful that it would.

    These kind of schemes are only possible in a rising market and the next time the market is rising strongly - as it surely will one day - that old feeling of irrational euphoria will take over.

    The reason we are easy to fool in the end, is because we are so good at fooling ourselves.

    http://news.bbc.co.uk/2/hi/business/7786813.stm
     
  7. Kat

    Kat Administrator Staff Member

    SEC Report: Employees Browsed Porn, Ran Private Businesses

    by Jake Bernstein, ProPublica - December 19, 2008

    The Securities and Exchange Commission is taking a drubbing these days for its abject failure―despite detailed tips―to catch Bernie Madoff in what appears to be the biggest Ponzi scheme in our nation’s history.

    Now, thanks to little-noticed report from the agency’s inspector general, we have a detailed glimpse into other bad behavior by some SEC employees.

    The report, released the day after Thanksgiving, reveals that some employees at the agency were clearly preoccupied with matters other than their mission of "protecting investors and maintaining fair, orderly, and efficient markets." The semi-annual report to Congress, which covers the period from this past April to September, details among other things a handful of employees circumventing internal controls to download porn. Let’s pause for some detail:

    [Investigators] uncovered evidence that an employee who was still in his probationary period had used his SEC laptop computer to attempt to access Internet websites classified as containing p**nography, resulting in hundreds of access denials. The OIG investigation also disclosed that this employee successfully bypassed the Commission’s Internet filter by using a flash drive.

    Presumably, that’s not the kind of initiative the SEC is looking for.

    There were also more serious misdeeds raised by the report. For example, there is the case of the senior-level commission employee who "clearly and purposefully identified herself as a Commission employee when dealing with brokers about a family member’s account," making the broker in question feel like she was trying to "intimidate and bully him." The OIG referred the matter to management for "disciplinary action, up to and including dismissal." By the end of the period covered in the report, management "had not proposed or taken action."

    There are other examples where the punishment was less than fulsome.

    Investigators found employees in separate offices operated private photography businesses out of the commission:

    An employee repeatedly and flagrantly used Commission resources, including Commission Internet access, e-mail, telephone and printer, in support of his private photography business for several years.

    The IG’s office recommended "disciplinary action up to and including dismissal." In turn, the report notes, "management suspended the employee from duty and pay for nine calendar days."

    When asked about the report, Deputy Director for Public Affairs John Heine said, "In each of these [cases] there is some sort of response from the Commission. We don’t have anything to say beyond that."

    The report reveals also that two commission staffers employed as attorneys didn’t have active bar memberships. One attorney let his bar license lapse in 1994. The report said one of the lapsed lawyers "submitted a declaration in Federal court, in which he stated that he was an attorney employed by the SEC. We referred the potential false statement or perjury to the applicable United States Attorney’s office." (The office declined to prosecute.)

    The IG also found that the commission did not have a sufficient system in place to "prevent and detect insider trading on the part of Commission employees or violations of the Commission’s rules."

    The agency’s information management also comes in for criticism. An employee survey conducted by the inspector general revealed that employees failed to enter data into a computer system used to manage investigations. The system known as the HUB was launched in August 2007 after the Government Accountability Office had highlighted major problems with the SEC’s previous case management and tracking system. The IG semi-annual report also reveals that the commission lacks "an inventory of its laptops and was unable to trace ownership of laptops to specific individuals."

    http://www.propublica.org/article/s...rn-ran-private-businesses-1219#When:17:01:11Z
     
  8. Gentle Giant

    Gentle Giant Giant Admin for a Day Staff Member

    And now a death in the case.

    Madoff investor commits suicide
    Tuesday, 23 December 2008

    A French investment manager who put $1.4bn (£1bn) into Bernard Madoff's fraud-hit scheme has committed suicide in his New York office, police said.

    Rene-Thierry Magon de la Villehuchet, 65, was found sitting at his desk with both wrists slashed, New York police spokesman Paul Browne said.

    A bottle of sleeping pills was on his desk and a box cutter lay on the floor.

    Mr Madoff is accused of running a $50bn (£34bn) Ponzi scheme that wiped out investors around the world.

    Big funds like Mr Villehuchet's were especially hard hit.

    Paris newspaper La Tribune said he spent the past week trying "day and night to find a way to recoup his investors' money".

    Mr Villehuchet, who was married without children, was co-founder of money manager Access International.

    Legal case
    Mr Madoff's fraud has ensnared Wall Street investors and charities around the world, although the full extent of the losses is as yet unknown.

    He is under house arrest in his Manhattan apartment, and his assets have been frozen.

    Another investor who gave Mr Madoff $2m (£1.35m) to manage has taken legal action against US financial regulators.

    Phyllis Molchatsky, a 61-year-old retiree from New York, is seeking $1.7m in damages from the US Securities and Exchange Commission.

    It is believed to be the first attempt by an investor to recover losses from the SEC.

    http://news.bbc.co.uk/2/hi/business/7798533.stm
     
  9. Godzilla

    Godzilla Super Moderator Staff Member

    On Yahoo.

    Doubts grow on whether Madoff acted alone in fraud
    by Marine Laouchez Marine Laouchez – Wed Dec 24


    NEW YORK (AFP) – As a probe intensifies into Bernard Madoff, doubts are growing on whether the now-infamous Wall Street investment manager could have committed a record fraud of 50 billion dollars on his own.

    In a criminal complaint filed against the 70-year-old Madoff, prosecutors said Madoff stated "in substance, that he had personally traded and lost money for institutional clients and that it was all his fault."

    But many members of the financial community are skeptical that Madoff could have single-handedly maintained accounts for the fictitious investment scheme involving tens of billions of dollars and a multitude of clients.

    "It doesn't seem to me that a 70-year-old man can do this by himself, nor can he do it simply in conjunction with his accountants," said Doug Kass, founder and president of Seabreeze Partners, a fund that uses "short" sales in an effort to benefit from falling share prices,

    "It's a rather extensive scheme, an extensive fraud. It's impossible for it to be a one- to five-person event."

    Madoff was arrested December 11 and charged with massive fraud. He has been under house arrest with electronic monitoring.

    The list of victims is already staggering, ranging from a charity run by Hollywood mogul Steven Spielberg to Japanese bank Nomura and European banks, where exposure ran into the billions of dollars.

    The Justice Department complaint indicated senior employees of Madoff's firm said the accused ran his adviser business from a separate floor in his New York offices.

    One employee told investigators that Madoff "kept the financial statements for the firm under lock and key," and stated that Madoff was "cryptic" about the firm's investment advisory business, the complaint said.

    Mace Blicksilver at Marblehead Asset Management said however that it was "unthinkable that he could orchestrate such a scheme by himself."

    "Theoretically he wasn't trading the money, he was just running this giant scheme," Blicksilver told AFP.

    "He was secluded in his own office. I guess it's easy enough to gin up the documentation if you have nothing to do in your office all day. All these documents, they're just a piece of paper."

    If Madoff did not act alone, who helped?

    Speculation is mounting about potential accomplices in what may be the biggest investment fraud of all time.

    One possibility is Madoff's family. His sons, Andrew and Mark, worked with their father but were believed to have alerted authorities. Other family members who worked with Madoff included his brother Peter Madoff.

    Some reports say the probe may also look at the tiny audit firm Friehling & Horowitz, and a longtime Madoff aide Frank DiPascali.

    The Securities and Exchange Commission is investigating internally how the watchdog failed to react to almost a decade of warnings about Madoff.

    The probe will "include all staff contact and relationships with the Madoff family and firm, and their impact, if any, on decisions by staff regarding the firm," said SEC chairman Christopher Cox earlier last month.

    One issue likely to be examined will be Madoff's niece, Shana Madoff, who married former SEC attorney Eric Swanson in 2007.

    Ralph Silva, a London-based analyst at the consultancy Tower Group, said that whether or not Madoff acted alone, he was able to benefit from the "presumed trust" of clients.

    "Banks in Europe have always put a lot of trust in their competitors and if a product has been purchased by a trusted competitor, the bank presumes the product has been checked and passed the criteria of the first bank to buy it," he said. "Therefore, they don't check the all details themselves."

    David Kotok at Cumberland Advisors said Madoff's investment scheme broke many ethical rules because it had no internal controls.

    "Madoff required that investment management, brokerage, and custody all be with him under the same roof," Kotok said.

    "Placing investment management, custody, and brokerage in one institution and agreeing to opacity about the activity is viewed as the riskiest structure by skilled professionals. How their lawyers and accountants and advisers allegedly sanctioned that decision also triggers many questions."

    http://news.yahoo.com/s/afp/20081224/ts_alt_afp/usfinancefraudmadoffprobe
     
  10. Cold War Kid

    Cold War Kid Ninja

    Wednesday, 14 January 2009
    BBC

    Judge rejects Madoff jail appeal

    A US judge has rejected an appeal from prosecutors that Bernard Madoff should be sent to jail while they continue to probe his alleged $50bn (£33bn) fraud.

    Prosecutors had lost an argument earlier this week that his bail should be revoked because he violated a court order freezing his assets.

    Mr Madoff will remain on bail after a judge confirmed that decision.

    Mr Madoff posted more than $1m-worth of jewellery and valuables to relatives and friends before Christmas.

    But his lawyer has maintained that his client had not realised this violated the freezing of his assets.

    Judge Lawrence McKenna said prosecutors had been unable to make a compelling argument that Mr Madoff was a danger to the community or was at risk of leaving the country - which are the two main requirements for bail decisions.

    Complicated

    Mr Madoff, 70, a former chairman of the Nasdaq stock market, was arrested and charged on 11 December in what would be Wall Street's biggest Ponzi scheme, one in which early investors are paid-off with the money of new clients.

    If convicted, he faces up to 20 years in prison and millions of dollars in fines.

    The investment adviser has not appeared in court to formally answer the charge and an 11 February deadline to indict him meaning that he will remain free for at least another four weeks, provided he does not breach the terms of his bail.

    Fraud experts have said the purported scheme was too complicated and went on too long to have been carried out by Mr Madoff alone.

    The investment adviser, who has been a Wall Street figure for more than 40 years, is the only person accused in the scandal surrounding his firm, Bernard L Madoff Investment Securities.
     
  11. Spidey

    Spidey Ninja

    For as much as this guy swiped we seem to just be going after his pocket change.
     
  12. Ivana

    Ivana Member

    Yeah, he's under house arrest (in his multi million condo).

    Tried to mail out all that jewelry to his friends. You know he has off shore accounts.

    And I've heard his lawyers will keep him out of court for years.
     
  13. Kat

    Kat Administrator Staff Member

    British investor checks out

    AP | Raphael G. Satter | February 14, 2009

    A retired British army major killed himself after losing his life savings in the alleged fraud perpetrated by U.S. financier Bernard Madoff, his son said Friday.

    Willard Foxton told The Associated Press that, at first, he felt so angry after his father William Foxton's death he wanted to attend Madoff's possible trial in the United States to fling the veteran's medals in his face. Now he just wants Madoff to know what happened to his father.

    "I'm sure Mr. Madoff thinks it was just a con got out of hand. He thinks it's all about money -- I'm sure that's what he feels," Foxton said in a telephone interview. "I want him to see that people have died as a result of what he's done."

    Police in the English town of Southampton say William Foxton, 65, died from a single gunshot to head on Tuesday and that a pistol was recovered at the scene. An inquest still needs to determine the cause of death, but police in the town, 80 miles (130 kilometers) southwest of London, say the shooting was not suspicious. Willard Foxton said it was suicide.

    Foxton, 28, said his father told him that he had lost all his money in a Madoff-linked fund about a week before the shooting.

    "He was a bit distracted," Willard Foxton said. "He said: 'I can't really concentrate, I've lost everything in these bloody Bernie Madoff hedge funds.'"

    William Foxton, who served in the French Foreign Legion and rose to the rank of major in the British army, lost an arm during service in the military. He retired in the 1970s. His son said he did not know the exact circumstances of the injury, explaining that his father told him little about his time in the army.

    William later threw himself into humanitarian work, spending the 1990s and early 2000s in the Balkans, where he was a member of the European Commission Monitoring Mission and spent time as a spokesman for the Organization for Security and Cooperation in Europe. He also did work for the German charity Arbeiter Samariter Bund, his son said.

    Foxton was made an Officer of the Order of the British Empire in 1999 for his work in the former Yugoslavia. His son said he had been investing his life savings in the Herald USA Fund and Herald Luxemburg Fund, both of which suffered hundreds of millions of dollars in losses as a result of Madoff's alleged scam. Foxton said he doesn't yet know how much his father lost, but thought it could be in the high six figures.

    Foxton's isn't the first suicide linked to the alleged fraud. In December, 65-year-old French financier Rene-Thierry Magon de la Villehuchet slit his wrists after losing $1.4 billion he had invested with Madoff.

    He was among the thousands of clients allegedly swindled out of billions of dollars by Madoff in a mammoth pyramid scheme -- a word used to describe a scam in which early investors are paid with money raised from new investors.

    Madoff was arrested in December as the scheme unraveled and he remains confined to his Manhattan penthouse under house arrest.

    "God knows how many people have been affected by this," Foxton said.

    http://www.huffingtonpost.com/2009/02/14/william-foxton-british-in_n_166967.html
     
  14. Gentle Giant

    Gentle Giant Giant Admin for a Day Staff Member

    I read a story on this today that it might not be $50 billion that Bernie "Madoff" with. It might only be $20 billion. What a relief! :rolleyes:
     
  15. Central Scrutinizer

    Central Scrutinizer Administrator Staff Member

    See? Only $20 billion. That's like a $30 billion dollar rebate.
     
  16. Central Scrutinizer

    Central Scrutinizer Administrator Staff Member

    Madoff admits $50bn fraud scheme

    Send him to GITMO!

    Thursday, 12 March 2009
    BBC

    Disgraced US financier Bernard Madoff has been jailed after pleading guilty to all 11 charges surrounding an estimated $50bn (£35bn) fraud.

    Some of his victims clapped when he was handcuffed and led out of a New York courtroom. He had earlier said he was "deeply sorry and ashamed".

    The 70-year-old defrauded thousands of investors in a fraud he admitted had been running since the early 1990s.

    He could receive up to 150 years when he is sentenced in June.

    Arrest 'inevitable'
    "I cannot adequately express how sorry I am for what I have done," Madoff told the court.

    He said that when he started the fraud, he had hoped it would only be for a limited time.

    "I realised that my arrest and this day would inevitably come," he said.

    While Madoff insists he acted alone, attention is now likely to switch to whether others at his company were involved.

    "A lot of resources are being expended both to find assets and to find anyone else who might be responsible for this fraud," said prosecutor Marc Litt.

    "It's impossible to believe that Mr Madoff did this by himself," William Galvin, secretary of the Commonwealth of Massachusetts, told the BBC.

    Prior to having his bail revoked, Madoff had been under house arrest at his luxury Manhattan apartment.

    'Evil incarnate'
    A number of Madoff's victims attended the hearing.

    Speaking outside the courtroom, Cynthia Friedman told the BBC Madoff was "evil incarnate".

    She and her husband lost $3m with Madoff. "He has no remorse. He's a horrible man," she said. "He stole from charities, he's just an awful man."

    Many of his victims told the court they opposed his guilty plea, because they wanted the case to go to full jury trial so they could find out exactly what he had done with the money.

    Yet most clapped when he was handcuffed.

    "I think the only thing he feels is regret that he got caught," said one investor.

    "But the best view of all was when they put the handcuffs on him - you know, he might be in that several thousand dollars suit that the investors paid for - to see that is justice."

    Money laundering
    A former chairman of the Nasdaq stock market, Madoff has been a Wall Street figure for more than 40 years.

    The only person accused in the giant fraud surrounding his firm, Bernard L Madoff Investment Securities, Madoff is said to have run a Ponzi scheme, whereby early investors were paid off with the money of new clients.

    Madoff's 11 charges include four counts of fraud. In addition, he pleaded guilty to three counts of money laundering, making false statements, perjury, making a false filing to the US financial watchdog, and theft from an employee benefit plan.

    Madoff himself estimates that the fraud totalled $50bn.

    'A genius'
    One of Madoff''s victims, Burt Ross, a former mayor of New Jersey town Fort Lee, told the BBC he did not expect to recover a single cent of the $5m he invested.

    "Bernard Madoff is a genius," said Mr Ross. "You're dealing with the greatest con artist probably in the history of the world.

    "He created a mystique and associated with extraordinarily well respected and revered people, and so he was given the benefit of the doubt by financial regulators who blew it badly."

    Investigators say they are continuing efforts to recover all the money Madoff has stolen, but most commentators - and most of his investors - say it is highly unlikely that any more than a very small amount will be found.

    "It's going to be hard to recover the money," said Lisa Osofsky, former deputy general counsel for the FBI, now a consultant with Control Risks.

    "In a Ponzi scheme, you're constantly passing the money out rather than keeping it, so who knows how much money he actually made."

    Mark Raymond, a lawyer representing some of Madoff's victims, said it would be wrong to think of them all being multimillionaires.

    Despite widespread press coverage of famous names and a wealthy elite, Mr Raymond, of law firm Broad and Cassel, said many were normal working people, including a retired couple from Atlanta.

    "He's 82, she's 78, and they are both looking for work because they have lost everything," he said.

    Mr Raymond said another victim was a plumber who earned no more than $60,000 a year.

    http://news.bbc.co.uk/2/hi/business/7939847.stm


    WHAT IS A PONZI SCHEME?
    A fraudulent investment scheme paying investors from money paid in by other investors rather than real profits

    Named after Charles Ponzi who notoriously used the technique in the United States in the 1920s

    Differs from pyramid selling in that individuals all tend to invest with the same person
     
  17. Central Scrutinizer

    Central Scrutinizer Administrator Staff Member

  18. Gentle Giant

    Gentle Giant Giant Admin for a Day Staff Member

    Maybe Bernie needs to join the Name that Scammer Hall of Shame.
     
  19. Ivana

    Ivana Member

    I second that motion
     
  20. Templar

    Templar Super Moderator

    Poor Ruth, left with $2.5M

    http://www.reuters.com/article/newsOne/idUSTRE55Q0BF20090627


    Ruth Madoff forfeits asset claims, left with $2.5 million
    Sat Jun 27, 2009 8:13am EDT

    NEW YORK (Reuters) - Ruth Madoff, the wife of epic swindler Bernard Madoff who reaped billions and a lavish family lifestyle, will be left with $2.5 million and have to look for a new home as she forfeits claim to some $80 million in assets.

    Documents filed in Manhattan federal court on Friday night showed that Ruth Madoff, 68, who has said nothing in public about her jailed husband's crimes in the six months since his arrest, had come to an agreement with U.S. prosecutors.

    "In compromise of claims Ruth Madoff would have pursued, the Office (U.S. Attorney) will not contest claim to a sum of money equal to $2,500,000, which sum the Office shall cause to be tendered to Ruth Madoff promptly after she vacates the real property and surrenders all personal property," the court order said.

    Ruth Madoff has not been charged with any crimes but she has been widely vilified by defrauded investors, shunned by people she once knew and pursued by the New York press. Under the agreement she could still be liable to civil claims.

    Her 71-year-old husband will be sentenced in Manhattan federal court on Monday and is likely facing the rest of his life in prison after pleading guilty in March to criminal charges of running Wall Street's biggest investment scheme.

    He has not named any accomplices and only his outside accountant has been charged, but few believe he acted alone.

    In an agreement with U.S. prosecutors approved by U.S. District Judge Denny Chin on Friday night, Bernard Madoff forfeited all rights to assets totaling $170 billion, the amount prosecutors said flowed through the principal account of his decades-long fraud.

    The properties to be sold include the couple's $7 million apartment and primary residence in Manhattan, an $11 million house in Palm Beach, Florida and a $3 million home in Montauk on New York's Long Island. Other assets listed include expensive boats and cars.

    In court papers filed earlier this year, Bernard Madoff's lawyer had asked the government to allow his wife to keep almost $70 million in assets that were in her name, arguing they were not connected to the fraud.

    At the time, she held some $45 million in municipal bonds and $17 million in a bank account. She also withdrew $15.5 million in the weeks before her husband's December 11 arrest.

    The documents agreeing to the sales were signed by lawyers for the Madoffs.

    The Florida property and several vessels have already been seized by the United States Marshals Service.

    Proceeds from asset sales will be distributed to defrauded investors.

    (Reporting by Grant McCool; Editing by Bill Tarrant)
     

Share This Page