$ 50 Billion Fraud In Largest Ponzi Scheme

[LaoPo]

Did you read Markopolos' 19 page email to the SEC Lao Po? If not you should and so should everyone else. It is a fascinating look at how markets really work, which is much different than how most people think they work.

Sorry, no..I missed it but thanks for reminding me and I will read them the coming days; it's a niece quiet piece of paper for Christmas...

But...isn't it an absolute CRAZY and mad world we live in ?; people get arrested for minor criminal acts and thrown in jail.

But a 70 year old chap who's is one of the biggest white border criminals the world has EVER seen, and he is allowed to have a cozy Christmas with his family whilst thousands are suffering their losses during the same Christmas.

Simply unbelievable.

LaoPo

[12DrinkMore]

Despite the Fed's and other CB's best?? efforts, I do not see how deflation cannot take hold. There is just too much f'ing debt. Everyone is waiting for inflation to bail us out of this mess, when the truth is just about everything on this earth has been inflated already.

Housing, commercial property and stocks in warehouses will all deflate in price as nobody will be buying, there will be no cash, as debts have to be paid and unemployment is shooting up on a daily basis. With electronic goods deflation has been occurring for years without anybody complaining.

But food, transport, oil and the basic requirements, will all head upwards. With the Quid down 25% how can imports not shoot up? The deflation story is a pack of lies, CPI inflation is still over 4% and real inflation (what people experience) has been at 7% plus for several years.

Look at this calculation, which is relevant for retired Brits,

Last year you needed 800,000 Baht in the bank for your pension requirements. At 68 Baht to the Pound this amounted to 11,764 Quid. Now at 52 Baht to the Pound (around 24% devaluation) the same 800,000 Baht will cost you 15,384 Quid, a 31% inflation.

This is being quickly fed through to all Brits living in Thailand, who are much more aware of the effect of the devalued Sqib than the Brits living in the UK, where it will hit in a month or two.

There is NO way that the UK government will tolerate deflation. They are assuring more inflation by planning another interest rate drop in January and then along will come "quantative easing", or printing Quids, to ensure that inflation will be back up.

(Have a look at http://www.chrismartenson.com/crashcourse to see how the inflation figures are fiddled in the US to provide less than the real figure, trying to sort through the publications on the uk government statistics site is a headache)

[LaoPo]

Despite the Fed's and other CB's best?? efforts, I do not see how deflation cannot take hold. There is just too much f'ing debt. Everyone is waiting for inflation to bail us out of this mess, when the truth is just about everything on this earth has been inflated already.

Housing, commercial property and stocks in warehouses will all deflate in price as nobody will be buying, there will be no cash, as debts have to be paid and unemployment is shooting up on a daily basis. With electronic goods deflation has been occurring for years without anybody complaining.

But food, transport, oil and the basic requirements, will all head upwards. With the Quid down 25% how can imports not shoot up? The deflation story is a pack of lies, CPI inflation is still over 4% and real inflation (what people experience) has been at 7% plus for several years.

Look at this calculation, which is relevant for retired Brits,

Last year you needed 800,000 Baht in the bank for your pension requirements. At 68 Baht to the Pound this amounted to 11,764 Quid. Now at 52 Baht to the Pound (around 24% devaluation) the same 800,000 Baht will cost you 15,384 Quid, a 31% inflation.

This is being quickly fed through to all Brits living in Thailand, who are much more aware of the effect of the devalued Sqib than the Brits living in the UK, where it will hit in a month or two.

There is NO way that the UK government will tolerate deflation. They are assuring more inflation by planning another interest rate drop in January and then along will come "quantative easing", or printing Quids, to ensure that inflation will be back up.

(Have a look at http://www.chrismartenson.com/crashcourse to see how the inflation figures are fiddled in the US to provide less than the real figure, trying to sort through the publications on the uk government statistics site is a headache)

The topic is about the $ 50 Billion Fraud scheme and now it's changing into deflation in the UK or not but has nothing to do with the OP and completely off topic.

The DEFLATION issue is however quite interesting and important and I suggest you to open a new topic about DEFLATION; how about it ?

LaoPo

[Pakboong]

Rather than saying this hedge fund has gone bust, due to its choice of investment assets and investment methologies, a scenario which is highly probable in the current financial paradigm, since all the professionals are predicting that at least 30% of all hedge funds are about to fail, more than 700 of them, the CEO chooses to fess up to fraud. If the CEO admits the fund has gone bust, then all those wealthy members of the Jewish community get nothing, but if the CEO admits to fraud they get their money back as compensation from the US tax payer, just as they are also drawing money back from the tax payers with the other hand.

http://www.sunniforum.com/forum/showthread.php?t=41361

[LaoPo]

Rather than saying this hedge fund has gone bust, due to its choice of investment assets and investment methologies, a scenario which is highly probable in the current financial paradigm, since all the professionals are predicting that at least 30% of all hedge funds are about to fail, more than 700 of them, the CEO chooses to fess up to fraud. If the CEO admits the fund has gone bust, then all those wealthy members of the Jewish community get nothing, but if the CEO admits to fraud they get their money back as compensation from the US tax payer, just as they are also drawing money back from the tax payers with the other hand.

http://www.sunniforum.com/forum/showthread.php?t=41361

Ho ho......wait a minute; this is not so easy as the writer in this "Sunni Forum" claims. Don't forget this is an Arab forum and Mr. Madoff is Jewish....as you can read from the comments.

It is very hard to believe that that is true.....that there will be an institution/government, ready with up to $ 50 Billion, CASH to pay these victims back.

I haven't read another single source claiming that that will be the case (victims will be paid back).

LaoPo

[flying]

Rather than saying this hedge fund has gone bust, due to its choice of investment assets and investment methologies, a scenario which is highly probable in the current financial paradigm, since all the professionals are predicting that at least 30% of all hedge funds are about to fail, more than 700 of them, the CEO chooses to fess up to fraud. If the CEO admits the fund has gone bust, then all those wealthy members of the Jewish community get nothing, but if the CEO admits to fraud they get their money back as compensation from the US tax payer, just as they are also drawing money back from the tax payers with the other hand.

http://www.sunniforum.com/forum/showthread.php?t=41361

Funny but these days that would be expected & not even a surprise.

When I first heard of the whole Ponzi scheme my 1st thoughts were..............

Who stands to benefit by this guy turning himself in like this?

[LaoPo]

Rather than saying this hedge fund has gone bust, due to its choice of investment assets and investment methologies, a scenario which is highly probable in the current financial paradigm, since all the professionals are predicting that at least 30% of all hedge funds are about to fail, more than 700 of them, the CEO chooses to fess up to fraud. If the CEO admits the fund has gone bust, then all those wealthy members of the Jewish community get nothing, but if the CEO admits to fraud they get their money back as compensation from the US tax payer, just as they are also drawing money back from the tax payers with the other hand.

http://www.sunniforum.com/forum/showthread.php?t=41361

Funny but these days that would be expected & not even a surprise.

When I first heard of the whole Ponzi scheme my 1st thoughts were..............

Who stands to benefit by this guy turning himself in like this?

Didn't his two sons persuaded him to turn himself in ?

We can't do much more than speculate and wait...in the meantime I'm reading the link, Lannarebirth provided; the report Markopolos sent (anonymous at the time, afraid as he was for repercussions towards his family) to the SEC THREE YEARS AGO in 2005:

http://www.slideshare.net/hblodget/markopo...n?type=document

LaoPo

[12DrinkMore]

http://www.yourlawyer.com/articles/read/15695

"The expert told Reuters that the litigation stemming from the Madoff fraud would be "staggering", and could play out for "years and years"."

The legal vultures have been strangely quiet in all of this financial crisis. But not much longer, it seems. As usual, they will always find a way to make a decent living.

[Shotime]

Did you read Markopolos' 19 page email to the SEC Lao Po? If not you should and so should everyone else. It is a fascinating look at how markets really work, which is much different than how most people think they work.

Sorry, no..I missed it but thanks for reminding me and I will read them the coming days; it's a niece quiet piece of paper for Christmas...

But...isn't it an absolute CRAZY and mad world we live in ?; people get arrested for minor criminal acts and thrown in jail.

But a 70 year old chap who's is one of the biggest white border criminals the world has EVER seen, and he is allowed to have a cozy Christmas with his family whilst thousands are suffering their losses during the same Christmas.

Simply unbelievable.

LaoPo

For a minute, I thought you were talking about Thaksin except he's not 70 and recently divorced, and he's Buddhist.

[LaoPo]

Did you read Markopolos' 19 page email to the SEC Lao Po? If not you should and so should everyone else. It is a fascinating look at how markets really work, which is much different than how most people think they work.

Sorry, no..I missed it but thanks for reminding me and I will read them the coming days; it's a niece quiet piece of paper for Christmas...

But...isn't it an absolute CRAZY and mad world we live in ?; people get arrested for minor criminal acts and thrown in jail.

But a 70 year old chap who's is one of the biggest white border criminals the world has EVER seen, and he is allowed to have a cozy Christmas with his family whilst thousands are suffering their losses during the same Christmas.

Simply unbelievable.

LaoPo

For a minute, I thought you were talking about Thaksin except he's not 70 and recently divorced, and he's Buddhist.

Maybe your brain wasn't working fast yet this morning.... ....Mr. T. is a small baby in comparison to Mr. Madoff.

LaoPo

[Shotime]

You're probably right. I thought Mr. T had a fair amount of baht. Even so, both seem guilty of comparable crimes to their clients/constituances. I'm not sure how cozy either man's xmas will be. I'd bet the minor criminals would look at them the same.

[LaoPo]

You're probably right. I thought Mr. T had a fair amount of baht. Even so, both seem guilty of comparable crimes to their clients/constituances. I'm not sure how cozy either man's xmas will be. I'd bet the minor criminals would look at them the same.

There are 2 differences between the cases of the two 'gentlemen'.

1. the amount of money involved

2. the jurisdictional system in the two countries is a bit different

LaoPo

[LaoPo]

Madoff scandal stuns Palm Beach Jewish community

Fri Dec 19, 2008 12:59pm EST - By Jim Loney

PALM BEACH, Florida (Reuters) - Bernard Madoff's alleged $50 billion Wall Street fraud scheme has hurt and embarrassed the Jewish community of Palm Beach, the Florida town of the mega-wealthy where the financier found so many of his investors.

Madoff made his connections at the Palm Beach Country Club, an oceanfront hideaway founded by Jews excluded from other posh clubs in one of America's wealthiest towns.

His suspected Ponzi scheme, which has devastated charities and bilked some of Palm Beach's richest families, has stirred anger, disappointment and some soul-searching in a town that at the height of the winter social season is 50 percent Jewish, said Rabbi Moshe Scheiner of the Palm Beach Synagogue.

"I know a number of people who have been hurt by this, wonderful people who have been extremely generous with their wealth to make the world a better place," he said. "It's a shame they won't be in a position to do the good things they have been doing."

HUNDREDS OF MILLIONS LOST

The fraud, one of the largest in U.S. history, appears to have struck hardest at Jewish families and charities across the United States, where Madoff's allure spread by word of mouth, and at European banks and wealth managers that bought into his funds for their rich clients.

Madoff's connections won him a following in Palm Beach, a beach enclave with a permanent population of 10,000 that triples when winter cold hits the Northeastern United States. A financial adviser said he knew of several local families that had lost more than $100 million each.

The charitable foundation of Carl Shapiro, the 95-year-old philanthropist who introduced Madoff to some of his eventual investors at the Palm Beach Country Club, said it had about 45 percent of assets, $345 million at the end of 2007, invested with Madoff.

The ripples reached into Jewish communities across America and swept up luminaries like billionaire real estate investor Mort Zuckerman and director Steven Spielberg.

Total losses to the Jewish community were unknown, but the Jerusalem Post, in what it called a partial review, said at least $600 million in Jewish charitable funds were wiped out.

The newspaper said the Madoff losses "may amount to the most spectacular financial disaster to hit Jewish life since the Great Depression, with unconfirmed losses totaling up to $1.5 billion."

Among the hardest hit appear to be New York's Yeshiva University, which said its investment with Ascot Partners, a money manager that had most of its assets with Madoff, was recently valued at about $110 million, and the Shapiro Foundation.

The Jewish Federation of Palm Beach has not been affected so far, spokesman Bill Orlove said, but it just started its annual fundraising campaign last week and it was too soon to tell if the scandal would curtail donations.

HOME OF THE RICH

No one answered a knock this week on the massive polished wooden door at Madoff's $9.4 million Palm Beach home on the Intracoastal Waterway tucked behind a towering ficus hedge. The backyard pool is fringed with palms and flowering bougainvillea and a gray Lexus sits in the gravel drive, which encircles a banyan tree.

While luxurious, Madoff's winter getaway in no way compares with the vast Palm Beach playgrounds along the Atlantic Ocean. Donald Trump recently sold one of those estates for $95 million and another changed hands for $77.5 million.

Madoff's home is a short distance from the exclusive Palm Beach Country Club, which seeks no visitors. The clubhouse, behind manicured hedges and separated from the Atlantic by a narrow roadway, has no sign out front to identify it and employees are quick to chase away interlopers.

Founded by oil tycoon and developer Henry Flagler as a winter resort for the rich, Palm Beach has long been a haunt of American bluebloods like the Vanderbilts, Kennedys, Trump and a host of lesser-knowns from the U.S. Northeast.

The scale of the fraud raised fears of an anti-Semitic backlash in a town with a long history of discrimination, said author and Palm Beach resident Laurence Leamer.

BACKLASH?

"The Jews were so discriminated against they couldn't even go until 1965 to The Breakers and other local hotels," said Leamer, whose forthcoming book, "Madness Under the Royal Palms," chronicles the elite island.

While the scam has brought to light the overwhelming charity of the Jewish community, Leamer said, it had already triggered anti-Semitic reaction on the Internet.

People are saying, "Look at these devious, dishonest Jews, how they've brought us down.' You will find things on the Web of people trying to blame the Jews for what's happened," he said.

The Anti-Defamation League said it had noted anti-Semitic Web postings related to the Madoff scandal.

"This is an opportunity for the anti-Semites to promulgate bigotry and hatred," said Andrew Rosenkranz, the ADL's Florida director. "We hope the community will be proactive in flagging the comments as offensive and that the moderators of these sites will be diligent in removing the offensive material."

While Madoff made many of his connections among the Jews of New York and Palm Beach, the scandal should not be portrayed in terms of their religion, some Jews say, noting many of the victims were also Jewish.

Bette Greenfield, a resident of Deerfield Beach, Florida, lost $300,000 invested with Madoff by her father through his connections in the Jewish community.

Her father thought Madoff was "a prince," she said.

"He was just a scoundrel. He stole from everyone," she said. "This is not a Jewish issue."

Now 71 and retired, Greenfield said she was going to try to turn her hobby, making jewelry, into a business to make up for the losses.

Scheiner, the rabbi, said while it was "obviously disappointing" that Jews had been taken by a fellow Jew, there was a deeper sense of betrayal that Madoff had taken advantage of charities and that the needy would suffer as a result.

"Nobody is sitting around crying," he said. With the approach of the Jewish holiday of Hanukkah, Palm Beach Jews are re-evaluating priorities and "reaching out for more spirituality."

"Jews are people who have defied the odds and hope for a better tomorrow. Life goes on and you can't let this paralyze you. We've been through a lot worse, obviously."

-Reuters

LaoPo

[flying]

I have a feeling it may go one of two ways.....

Suicide or murder or maybe murder made to look like suicide?

Ok thats 3 ways then

In any case prison seems like a safe place for him now.

Which makes you wonder why is he out on the street anyway?

Innocent till proven guilty? But he has confessed yes?

[LaoPo]

I have a feeling it may go one of two ways.....

Suicide or murder or maybe murder made to look like suicide?

Ok thats 3 ways then

In any case prison seems like a safe place for him now.

Which makes you wonder why is he out on the street anyway?

Innocent till proven guilty? But he has confessed yes?

As far as I know there was a bail bond set for $ 10 Million and he had just his wife and brother signed up but was short for another a few people to sign up to reach that $ 10 million; but that news is a few days old so I don't know if he's still at home. He had a house-arrest so to speak.

LaoPo

[flying]

I have a feeling it may go one of two ways.....

Suicide or murder or maybe murder made to look like suicide?

Ok thats 3 ways then

In any case prison seems like a safe place for him now.

Which makes you wonder why is he out on the street anyway?

Innocent till proven guilty? But he has confessed yes?

As far as I know there was a bail bond set for $ 10 Million and he had just his wife and brother signed up but was short for another a few people to sign up to reach that $ 10 million; but that news is a few days old so I don't know if he's still at home. He had a house-arrest so to speak.

LaoPo

Madoff Fund Operator De La Villehuchet Found Dead in New York

http://www.bloomberg.com/apps/news?pid=206...&refer=home

Edited December 23, 2008 by flying

[LaoPo]

Madoff Fund Operator De La Villehuchet Found Dead in New York

http://www.bloomberg.com/apps/news?pid=206...&refer=home

What a way to commit suicide

"Thierry Magon de La Villehuchet, who ran a fund that invested with Bernard Madoff, was found dead today in his New York office in an apparent suicide, Police Commissioner Raymond Kelly said.

“Our investigative premise is that it was a suicide,” Kelly said in an interview. De La Villehuchet, 65, was found “with his feet propped up on his desk, a trash pail nearby to collect blood,” and no sign of a second person, Kelly said.

The money manager had “multiple stab wounds” to his arms and wrists, a box-cutter and pills were found nearby, and no suicide note was found, Kelly said."

From: the Bloomberg link, above

A photo from Patrick McMullan from a June 2007 Hermes store opening is captioned that Villehuchet is on the right in the photo below, with Access co-founder Patrick Littaye on the left. Huffington Post cannot vouch for that information.

Thierry de la Villehuchet, 65, was a co-founder of French fund Access International.

LaoPo

[flying]

Like I said before these guys will go by suicide or murder made to look like suicide.

Madoff should be in jail where he would be much safer. Both from mad folks & himself.

But..............Mai Pen Rai

[LaoPo]

L’Oreal Heiress Bettencourt Said to Have Invested With Madoff

By Saijel Kishan and Katherine Burton

Dec. 24 (Bloomberg) -- Liliane Bettencourt, the world’s wealthiest woman, entrusted part of her $22.9 billion fortune with Bernard Madoff through the fund manager found dead in New York yesterday, two people familiar with the matter said.

The 86-year-old daughter of L’Oreal SA founder Eugene Schueller was the first investor in a fund managed by Access International Advisors, the people said, speaking on condition of anonymity because her investment isn’t public. The body of Access co-founder Thierry Magon de La Villehuchet, 65, was found in his Madison Avenue office yesterday. Police said he probably killed himself.

Bettencourt, a Parisian, joins wealthy individuals from around the world, including Spanish billionaire Alicia Koplowitz, U.S. moviemaker Steven Spielberg and Nobel laureate Elie Wiesel, among victims of what Madoff, 70, told investigators was a $50 billion Ponzi scheme.

“More high-profile names who have been victimized by Madoff will start to become known now,” said Ron Geffner, who represents hedge funds at the New York-based law firm Sadis & Goldberg LLP. “There’s a strong sense of anguish, fear and distrust.”

Calls and e-mails to Fondation Bettencourt Schuelle, the foundation she started in the Parisian suburb of Neuilly-sur- Seine, weren’t returned. Bettencourt ranked 17th in Forbes’ list of the world’s richest people in 2008, the highest-ranking woman. Access, which oversaw $3 billion, raised money mainly from wealthy European investors.

‘Extensive’ Due Diligence

Access said in a Dec. 12 letter to clients that funds including its LUXALPHA SICAV-American Selection invested solely with Madoff’s eponymous investment firm. The fund had $1.4 billion in assets as of Nov. 17, according to data compiled by Bloomberg.

Access says it carries out “extensive” due diligence on the funds to which it allocates money, a process that can take as long as six months and cost $100,000. It also hires private investigators to run “extensive background checks” on fund managers, including searches on professional credentials, regulatory filings and bankruptcy, according to marketing documents dated September.

New York police are working on the assumption that de La Villehuchet’s death was a suicide, Commissioner Raymond Kelly said yesterday. The fund manager was found “with his feet propped up on his desk, a trash pail nearby to collect blood,” and no sign of a second person, Kelly said in the interview.

Body at Desk

He had cuts made by a box-cutter in the area of his biceps and his wrist, and pills were found nearby, Kelly said at a news conference. No suicide note was found. His body was found at his desk early yesterday morning by a security guard who had been called by an employee unable to enter the office, Kelly said.

Villehuchet founded Access in 1994 with Patrick Littaye. One of the firm’s partners was Philippe Junot, according to the marketing documents. Junot is the former husband of Princess Caroline of Monaco. Prince Michel of Yugoslavia is an investor relations executive, according to the documents.

Prior to Access, De La Villehuchet was chairman and CEO of Credit Lyonnais Securities USA, the U.S. investment banking arm of the French bank. He had joined Credit Lyonnais in 1987, and before that ran Interfinance, an international broker firm specializing in French, Belgian and Italian stock markets that he founded in 1983. He worked at Banque Paribas from 1970 to 1983.

Access, which had 26 employees, said in a statement on Dec. 12 it was working with lawyers to assess its exposure to Madoff. UBS AG, LUXALPHA’s administrator until this year, is no longer involved with it, said Karina Byrne, a UBS spokeswoman.

De La Villehuchet’s death comes as lawsuits mount in connection with investors victimized by Madoff. Fairfield Greenwich Group, a hedge-fund firm that had $7.5 billion invested with Madoff, has been sued for allegedly failing to protect its clients’ assets. Madoff was arrested on Dec. 11 and is now under house arrest at his apartment in New York.

-Bloomberg

LaoPo

[meom]

“More high-profile names who have been victimized by Madoff will start to become known now,” said Ron Geffner, who represents hedge funds at the New York-based law firm Sadis & Goldberg LLP. “There’s a strong sense of anguish, fear and distrust.”

A lot of low profile names suddenly also claim to be victimized by Madoff instead of by the general economic downturn since their so-called association with Madoff lifts them immediately to hi-so status among their peers:lol:

[LaoPo]

Claim Madoff acted alone meets skepticism

Tue Dec 23, 2008 1:23pm EST

By Grant McCool and Martha Graybow

NEW YORK (Reuters) - Could the Bernard Madoff scandal -- alleged to be the biggest-ever Wall Street scam -- really have been the act of just one person? Fraud experts say they think it's impossible.

White-collar crime experts who are following the Bernard Madoff case say they doubt that the money manager, who authorities say has confessed to the fraud as "all his fault," could have carried out such a massive scheme alone.

They say that based on their experience investigating complex financial cases, the suspected $50 billion fraud was too lengthy and involved too many phony documents to have been carried out by only one individual.

No charges have been brought against anyone except Madoff, who was charged with securities fraud on December 11. He has not formally responded to the accusations in court.

Authorities are continuing to investigate. A lawyer for an accountant at the small auditing firm that Madoff used, Friehling & Horowitz in a suburb of New York City, told Reuters that his client had received a subpoena from federal prosecutors requesting documents.

"He is going to comply with that subpoena," attorney Andrew Lankler said of his client, accountant David Friehling.

The U.S. Attorney's Office in New York, which is prosecuting the case, has declined to comment on the probe.

Legal experts not involved in the case, including fraud investigators and former federal prosecutors, say it is hard to believe no one else associated with Madoff knew of the suspected scheme.

"PREPOSTEROUS"

"His claim that he was the only one involved is preposterous," said James Ratley, president of the Association of Certified Fraud Examiners in Austin, Texas.

"The amount of transactions, the number of dollars that are involved in the Ponzi, I just don't see any way he could be the only one involved," Ratley said.

A Ponzi scheme is one in which early investors are paid with the money of new clients. Ponzi schemes collapse when a large number of redemptions are requested and investors have not put in enough funds to cover them.

Madoff's investors say they received detailed financial statements over many years showing consistently high returns. His purported investing success drew a worldwide clientele.

Carrying out such a detailed scheme "is not doable on his own," said Ellen Zimiles, a former federal prosecutor who is chief executive officer of Daylight Forensic & Advisory LLC, a New York firm that works with corporations on compliance.

"That process alone of managing the statements is not a one-person job, and certainly not a person who is going from Palm Beach to Nice to Abu Dhabi," she said.

In court papers, FBI agent Theodore Cacioppi has said Madoff told him "that he personally traded and lost money for institutional clients, and that it was all his fault."

Madoff, 70, is quoted in the documents describing the investment arm of his Bernard L. Madoff Investment Securities LLC as "basically, a giant Ponzi scheme."

His securities firm employed numerous family members, including his brother Peter, two sons and a niece.

"They may not necessarily have known," said Pravin Rao, a former federal prosecutor who now is an attorney at law firm Perkins Coie LLP in Chicago. "Sometimes family members are shielded from the fraud in a perverse way of protecting them."

"HORRIFIC FRAUD"

His sons, Andrew and Mark Madoff, who both worked at their father's firm, have said through their attorney that they were not involved in the asset management side of the business and were shocked to learn of the suspected scheme. The lawyer said the Madoff sons turned their father in to authorities after he confessed to them.

Another family member, Shana Madoff, who is Bernard Madoff's niece and was a compliance lawyer at the firm's market-making unit, has also said through a spokesman that she had no prior knowledge of the "horrific fraud perpetrated" and is fully cooperating with the investigation."

An attorney for Peter Madoff did not return calls for comment.

Madoff's wife, Ruth, was ordered to surrender her passport as a condition of the money manager being allowed to stay out of jail on bail.

Ruth Madoff has not spoken publicly about the case, and Madoff's attorney, Ira Sorkin, has declined to answer questions about her.

A lawyer for a top official at Madoff's firm, Frank DiPascali, has said that "we are trying to sift through the facts like everybody else."

DiPascali dealt with client accounts and worked for Madoff's firm for more than 30 years, according to a report in The Wall Street Journal, citing a person familiar with the matter. The alleged fraud appears to have itself lasted 30 years, the newspaper said.

Investigators are likely pressing Madoff for names of other people who might have been involved, said Aitan Goelman, a criminal defense attorney at law firm Zuckerman Spaeder LLP in Washington, D.C.

But even if the money manager cooperates with the federal probe, given his age, he is still likely to get what could in effect be a life sentence if he decides to plead guilty in the case, said Goelman, a former federal prosecutor.

He and other experts said additional charges may not come soon. They said authorities have months of work ahead examining computer records and documents that are being made available to them.

"I don't believe that they are going to rush," Goelman said. "They will try to be thorough and try to talk to everybody who needs to be talked to."

-Bloomberg

LaoPo

[flying]

[LaoPo]

hmmm...don't know if I should agree or not....

LaoPo

[flying]

hmmm...don't know if I should agree or not....

LaoPo

Why both are classic Ponzi's

Have you ever looked at SS stats?

Oh Boy They didnt count on the baby boomers making it.

Then they sure didnt count on the next generation having so few kids.

Soooooo Less late investors to pay off the early investors whose money is loooong gone.

[Alwaysright]

Not to worry I am sure this is the only Ponzi scheme that exists on Wall Street

Social Security is a bigger Ponzi scheme,and the idiot Obama's tax the rich and give to the others is another.

[LaoPo]

December 27, 2008 - The Wall Street Journal

Madoff 'Feeders' Under Focus

Investigators probing the Bernard Madoff investment scandal are beginning to turn their attentions to the middlemen who attracted billions of investment dollars to Mr. Madoff's funds, said a person familiar with the government effort.

Authorities are interested in what the middlemen told clients about how their money was being invested, said this person, and whether they disclosed Mr. Madoff's involvement in managing client funds. There are no allegations that these go-betweens, or feeders, knew anything about Mr. Madoff's scheme.

At last count, wealthy individuals, foundations and banking giants have disclosed some $30 billion of losses at the hands of Mr. Madoff, who has himself claimed potential losses of up to $50 billion. The middlemen also say they've been victimized and have lost sizeable personal fortunes.

On Friday, a close relative of Rene-Thierry Magon de la Villehuchet, a New York-based Madoff middleman who died in an apparent suicide Dec. 23, said that Mr. de la Villehuchet had lost his life savings in the Madoff scandal.

Still, Mr. Madoff's alleged Ponzi scheme might have ended decades ago if he hadn't been able to bring in more and more cash. To keep the money flowing, he turned to a diverse group of middlemen who pitched the investing strategy. They received fees from the Madoff cash stream -- and many of them became wealthy in turn.

Some middlemen have since been sued by clients, who say that they neglected their duties to detect fraud, and in some cases didn't reveal they were actually invested with Mr. Madoff. None of the feeders have been accused of wrongdoing by authorities.

What follows are brief sketches of five Madoff middlemen.

Robert Jaffe

Robert Jaffe -- pictured here in his vintage MG -- was one of numerous middlemen who helped funnel money and clients to Bernard Madoff.

Philanthropist Robert Jaffe rose to the top of Palm Beach society with his dashing looks, strong golf game, wealthy wife and ready access to a powerful friend: Bernard Madoff.

Now, the 64-year-old Mr. Jaffe is facing tough questions from dozens of investors in Palm Beach who say they lost millions with Mr. Madoff. At a glitzy party at The Mar-a-Lago country club earlier this month, Jerome Fisher, co-founder of Nine West shoes, confronted Mr. Jaffe and screamed, "You've got a lot of nerve showing up here!" according to two people who witnessed the event.

For Mr. Jaffe, the Madoff scandal harms a sterling image cultivated over the years. With his tailored suits and a green vintage MG convertible, Mr. Jaffe was well connected with the other millionaires and billionaires of Palm Beach. He was a fixture at the Palm Beach Country Club, where many investors were recruited, and he was named the club's golf champion earlier this year.

Through a spokesman, Mr. Jaffe said he "had absolutely no knowledge of the fraud, and like so many others is a victim of these tragic events."

Mr. Jaffe started out as a stock broker. From 1969 until 1980 he worked for E.F. Hutton and from 1980 to 1989 he became a manager at Cowen & Co. In 1989 he became the manager of the Boston office for Cohmad Securities, a firm co-owned by Mr. Madoff that helped attract investors to his fund. The Massachusetts Secretary of State has subpoenaed Cohmad seeking details of its relationship with Mr. Madoff's firm.

Mr. Jaffe is married to Ellen Shapiro, the daughter of Carl Shapiro, an apparel tycoon who launched Kay Windsor Inc., which he sold to Vanity Fair Corp. in 1971. Mr. Shapiro has said he lost more than $400 million personally, according to people familiar with his situation.

The Jaffes recently built an 11,000 square-foot mansion just two doors down from Mr. Madoff's home overlooking the Intracoastal Waterway, near the Palm Beach Country Club. Members of the club said Mr. Madoff would often take lunch with Mr. Jaffe or Mr. Shapiro when he was on the grounds.

—Robert Frank

Stanley Chais

Stanley Chais ran his clients' money through a patchwork of partnerships with names such as Lambeth, Popham and Brighton. Photo: American Committee for the Weizmann Institute of Science

In rarified realms of Los Angeles, some investors simply called it "The Arbitrage."

Few people could explain how "The Arbitrage" worked, except that it was an exclusive investment pool run by Stanley Chais, a private investor from Beverly Hills with a New York accent and a knack for the financial markets.

His investors, mostly from well-to-do Jewish families, came to appreciate Mr. Chais's remarkably consistent returns of between 10% to 15% per year. The strategy of "The Arbitrage" turned out to be a simple one. Mr. Chais placed his clients' money with an old friend, Bernard Madoff.

Four Chais investors interviewed by The Wall Journal say they assumed their money had been managed by Mr. Chais and hadn't heard of Mr. Madoff until the scandal broke two weeks ago.

The four say they haven't heard from Mr. Chais since. They did, however, receive correspondence from Mr. Chais's accountant who informed them that all of their money had been invested with Mr. Madoff.

"Mr. Chais was shocked to learn of what appears to be a Ponzi scheme of unprecedented proportions operated by Bernard Madoff, an individual whom he had known for decades," said Eugene Licker, a lawyer for Mr. Chais, in a statement. "If the allegations are true, Mr. Chais and his family, like others, have watched personal wealth evaporate overnight."

Originally from the Bronx, Mr. Chais, 82 years old, lived in Beverly Hills for many years before recently moving to Sierra Towers, a luxury West Hollywood apartment building just off the Sunset Strip. He serves on the boards of several prominent Jewish organizations, including the Weizmann Institute and the Hebrew University.

Account statements and other correspondence from Mr. Chais reviewed by The Wall Street Journal make no mention of Mr. Madoff. Mr. Chais ran his clients' money through a patchwork of partnerships with names such as Lambeth, Popham and Brighton.

Year-end 2007 account statements provided by one Chais investor show two investment partnerships. One named Marloma was worth about $45 million and returned 13.89%. Another, Jameson, was worth about $20 million and returned 14.10% for the year.

Mr. Chais charged substantial fees, according to the statement from the Marloma partnership -- 4.5% of clients' assets.

Mr. Chais's family foundation said it is a victim of the alleged fraud. The Chais Family Foundation, a charity dedicated to Jewish causes, had $178 million in assets as of May 2007 according to tax records. Avraham Infeld, the foundation's director, said that on Dec. 11, the day of Mr. Madoff's arrest, Mr. Chais and the board convened in Manhattan at the New York Jewish Federation.

"The foundation's outlook that day could not have been brighter," said Mr. Infeld, who also hadn't heard of Mr. Madoff until Mr. Chais told him of the connection that evening. "Now we're wiped out."

In June, Mr. Chais sent a letter to clients, saying that for medical reasons he was moving to Jerusalem for six months. He named his son as the successor to his investment partnerships.

"I have been in close touch with the relevant brokers in New York, who are aware of my decision and have assured me that things will continue exactly as before after the succession," wrote Mr. Chais, six months before the Madoff situation broke. "Many of you have been with me for over thirty-five years, including personal friends and some relatives, and the relationship has been personally rewarding for me on many levels."

Mr. Infeld, the foundation director, said that Mr. Chais has lost a staggering amount of his own personal fortune. How much? "I didn't have the chutzpah to ask," he said.

—Peter Lattman and Joshua Mitnick

Jeffrey Tucker

The son of an accountant from Queens, Jeffrey Tucker spent eight years as an attorney for the Securities and Exchange Commission in the 1970s. The last three of them were as a supervisor in the agency's enforcement division. For the next decade, he worked as a partner at a private law firm putting together investment partnerships. He then ran an options trading business for a Wall Street brokerage firm.

Mr. Tucker is also the person who introduced investment firm Fairfield Greenwich Group to Bernard Madoff. Fairfield Greenwich, which had $7.3 billion with Mr. Madoff, appears to be the biggest casualty of the alleged scheme.

Mr. Tucker met Mr. Madoff through his father-in-law in 1989. He introduced Mr. Madoff to Fairfield Greenwich, which the next year launched the Fairfield Sentry fund. The fund, which charged clients a 1% management fee plus 20% of the fund's profit, gave all of the money to Mr. Madoff to manage.

When the SEC investigated Mr. Madoff in 2006 to determine whether he was engaging in fraudulent activities, it interviewed Mr. Tucker, according to a person familiar with the meeting.

For the past decade, the 62-year-old Mr. Tucker and his wife, Melanie, an expert bridge player, have lived in a Fifth Avenue apartment with views of Central Park.

Mr. Tucker's passion is horses, say people who know him. A longtime thoroughbred owner, in 2004 Mr. Tucker purchased Stone Bridge Farm in Schuylerville, New York, a short drive from the famed Saratoga Race Course. Mr. Tucker has invested millions of dollars at Stonebridge Farm, which boasts New York state's first-ever Polytrack, a synthetic racing surface designed to promote equine safety.

"This is all just unfolding," said Sue Vito, an employee at the farm who said she had read about Mr. Madoff's fraud but couldn't say whether it would effect the farm. "But if you want to write something, write that Jeff's a terrific guy."

—Peter Lattman

Andres Piedrahita

Andres Piedrahita was a Fairfield point man in Europe and Latin America.

Andres Piedrahita liked to throw lavish parties at his home in the expensive Madrid neighborhood of Puerta de Hierro. There he gathered Spanish and Latin American high society, including the heirs to Spain's biggest banking and industrial fortunes, according to people who know the couple.

These connections helped make Mr. Piedrahita one of the key figures in the spread of Mr. Madoff's reach from Palm Beach to far-flung world capitals.

After marrying one of the daughters of Fairfield Greenwich co-founder Walter Noel, the Colombian born Mr. Piedrahita joined Fairfield and eventually became the fund's point man in Europe and Latin America.

Mr. Piedrahita and his wife, Corina, moved to London, then Madrid, becoming ambassadors for the fund among Europe's wealthiest families.

The couple's social status became a powerful marketing tool for Mr. Madoff. Spanish clients invested some €65 million ($91.4 million) into Mr. Madoff's funds, according to Fairfield Greenwich. Others had their money invested in Fairfield's funds by Banco Santander SA, which delegated the running of some funds to Mr. Piedrahita.

In a statement released in Spain, Fairfield Greenwich said it was a victim of fraud and was considering legal action to protect its clients. Through a spokesman, Mr. Piedrahita declined to comment.

Mr. Piedrahita "managed to make this feel like an exclusive club that people wanted desperately to be a part of," said Fernando Fernandez, a former official at the International Monetary Fund who is now dean of Nebrija University near Madrid.

People who know him say Mr. Piedrahita in recent years displayed ever-greater signs of wealth. He commuted between London and Madrid in his Gulfstream private jet, stationed at the nearby military airbase of Torrejon de Ardoz. The couple had an estate in the Spanish Mediterranean island of Majorca, and a yacht.

Mr. Piedrahita was trying to sell a fund called Fairfield Sentry, with assets under Mr. Madoff, to at least one of his contacts just days before the alleged pyramid scheme collapsed.

On Dec. 3, "Andres Piedrahita came to see me to promote the Madoff fund and to tell me that, in this terrible year for hedge funds, his best-performing fund was Sentry," Martin Varsavsky, an Argentine businessman, said in a telephone interview.

Mr. Varsavsky said he declined to invest because Mr. Piedrahita could not explain how the fund made money. Mr. Varsavsky said he believes Mr. Piedrahita is a victim of the alleged scam. "I do believe that he himself, and his family, lost an enormous amount of money with Madoff."

—Thomas Catan

Robert Schulman

During his 14 years running Tremont Group Holdings, Robert Schulman was a vocal champion of Mr. Madoff. On telephone calls with Tremont investors, Mr. Schulman would describe his professional relationship with Mr. Madoff as close, saying they were in contact on a weekly basis, say people who invested with Tremont.

Some investors say they gained comfort from Mr. Schulman's extensive Wall Street background, where he worked at such firms as Smith Barney and Shearson Lehman Brothers. They also were put at ease by Tremont's track record with Mr. Madoff and its ownership by insurance giant Massachusetts Mutual Life Insurance Co.

But none of those factors were enough to save Tremont's investors from Mr. Madoff's alleged fraud. In all, they've lost an estimated $3.3 billion, the firm said.

Tremont attracted a wide range of investors, including wealthy individuals who made their money selling businesses or simply wanted a safe place for their children's trust funds. Access to Mr. Madoff was also a big attraction. Investors in Tremont's Rye Select Broad Market funds run by Mr. Madoff paid annual fees to Tremont of 1% to 1.75% of assets, according to 2008 marketing documents.

Simultaneously, Tremont also was a conduit for professional money managers running funds that invested in other hedge funds. Tremont trumpeted its Madoff feeder funds for their "hedged, market-timing strategy with defined risk and return parameters" and for bringing Tremont investors "the industry's most experienced and proven investment talent."

When Mr. Madoff's alleged fraud was revealed, Tremont said it was shocked by his actions. Mr. Schulman, Tremont, and MassMutual all declined to comment on what due diligence they performed on Mr. Madoff.

Mr. Schulman, 62 years old, retired from Tremont in July, though he has retained the title of chairman emeritus of the Rye, New York-based firm through Dec. 31.

People close to Mr. Schulman say he planned to resume advising clients on Madoff investments through a new firm called Foredestine LLC. Foredestine's Web site promises "access to ordinarily unavailable managers" with "extraordinary performance characteristics."

Mr. Schulman declined to comment on those plans. He said friends and family lost money in the Madoff funds and that he "is suffering the same fate as everyone else" who trusted Mr. Madoff.

Since leaving Tremont, Mr. Schulman has spent time working on behalf of a small nonprofit run by him and his wife, Nancy Schulman, a psychologist and social worker. Called Of Home, Family and Future Inc., it aims to help women and children who are poor or have been abused.

The charity did not have money invested with Mr. Madoff, Mr. Schulman said.

—Jenny Strasburg

From: http://online.wsj.com/article/SB1230337971...3.html?mod=MKTW

LaoPo

[AlexLah]

And you know what the funny thing is?

That a private investment company that invested 5 Million in persuading congress is rewarded with 5Billion.

And all people just watch it and agree that the automobile sector needs to be saved.

Ha ha ha !

Do you really understand what is going on, or do I have to spell it out loud for you?

[Misty]

December 27, 2008 - The Wall Street Journal

Madoff 'Feeders' Under Focus

...

Jeffrey Tucker

...

Mr. Tucker is also the person who introduced investment firm Fairfield Greenwich Group to Bernard Madoff. Fairfield Greenwich, which had $7.3 billion with Mr. Madoff, appears to be the biggest casualty of the alleged scheme.

Mr. Tucker met Mr. Madoff through his father-in-law in 1989. He introduced Mr. Madoff to Fairfield Greenwich, which the next year launched the Fairfield Sentry fund. The fund, which charged clients a 1% management fee plus 20% of the fund's profit, gave all of the money to Mr. Madoff to manage.

When the SEC investigated Mr. Madoff in 2006 to determine whether he was engaging in fraudulent activities, it interviewed Mr. Tucker, according to a person familiar with the meeting.

...

From: http://online.wsj.com/article/SB1230337971...3.html?mod=MKTW

LaoPo

According to a 20 Dec article in the IHT, Mr. Tucker was in Thailand sometime last year looking to educate potential investors about hedge funds:

' Last year, Jeffrey Tucker went to Asia to educate potential investors in Beijing and Thailand about hedge funds, seeking to allay their concerns about previous blow-ups in the industry like Long-Term Capital Management, a Connecticut hedge fund that was bailed out under the supervision of the Federal Reserve Bank of New York in 1998 when its exotic derivative investments brought it to the brink of a costly collapse.

"China is moving slowly as the reformers become familiar with what we do," Tucker told HedgeWorld in November 2007. "It's the same thing in Thailand. There are misunderstandings about hedge funds." '

http://iht.com/articles/2008/12/20/busines...doff.php?page=5

Wonder whom he met? Perhaps they understood more than he thought...

[Misty]

Wonder whom he met? Perhaps they understood more than he thought...

Looks like Jeffrey Tucker of Fairfield Greenwich Group was speaking at an investment seminar in Thailand in Nov 2007. Not clear from the articles below what entity sponsored the seminar, but his words are interesting nonetheless:

Hedge experts deserve better, insists Tucker

Hedge-fund managers have one of the least flattering images in the investment community.

Published on November 13, 2007 in The Nation

Writer Tom Wolfe said they clipped six-figure checks along with their children's applications to posh New England prep schools. Wolfe, who captured 1980s greed so aptly in "The Bonfire of the Vanities", summarised this new financial class as mostly "jerks" in his latest Vanity Fair article.

But Jeffrey Tucker disagrees. The founding partner of the Fairfield Greenwich Group (FGG), which has assets under management of US$15.5 billion (Bt525 billion), reckons that institutional investors will press for better hedge-fund operations, organisation and due diligence from these managers.

Institutional investors now make up about a quarter of the $1.8-trillion hedge-fund assets, said Tucker. The volume is likely to grow to a trillion or a 50-50 split by 2010, he added. These investors are mainly from labour unions, public and corporate pension funds, insurance companies, endowments and foundations.

University endowment is an interesting subject. Tucker believes that in the US many investment professionals sitting on endowment committees have made a strong impact on the endowments' returns.

Take, for example, the two prestigious science universities: the Massachusetts Institute of Technology and Imperial College London.

Both have produced Nobel laureates. But MIT has an endowment of $9.98 billion, while IC has $98.31 million.

Currently, institutional investors who employ hedge funds are still mainly from the US: 41 per cent, followed by Japan with 25 per cent. The UK and the Middle East have 8 per cent each.

But there are still stigmas in countries like China, where investors are quite wary as a result of the 1997 financial crisis.

Tucker explained that names like Longterm Capital and George Soros still "draw concerns". But now that Soros is no longer active and the principals of Longterm Capital were all dispersed, worries should dissipate.

Richard Landsberger, an FGG partner, said that hedge funds were able to attract investment because of their market-neutral approach and aggressive strategies which, for instance, involve longing undervalued stocks and shorting weak ones.

But the unregulated and discreet nature of hedge funds puts investors in the dark, said a source from the Association of Investment Management Companies.

The HFRI Fund Weighted Corporate Index, which has outperformed S&P 500 DRI since mid-2000, may not have taken in information that was comprehensive enough, or the funds may not have fully disclosed their data.

Thailand accounts for 1 per cent of FGG's $1.5 billion Asia-ex-Japan fund. Although the 30 per-cent reserve does not concern FGG, Landsberger that investment may rise in proportion to Thailand's gross domestic product within Asia.

As of now, the Securities and Exchange Commission bars Thai investors from investing in foreign hedge funds.

Ki Nan Tsui

Source : The Nation

_____________________________________________

Next few years to see high levels of growth

Hedge funds look towards Asia to diversify portfolios

Published on November 13, 2007 in The Bangkok Post

The global hedge fund market looks set to remain vibrant, with Asia increasingly becoming a hotbed for investments due to robust economic growth in the region, leading fund managers said yesterday.

''Going forward, Asia ex-Japan will see tremendous growth in investments by hedge funds,'' said Jeffrey Tucker, the founding partner of FairfieldGreenwich Group, a $15-billion hedge fund that is growing rapidly in the region.

Asia, which accounts for just 9% of the global $1.8-trillion hedge-fund industry, is set to see ''quintessential growth over the next 2-3 years,'' he added.

Mr Tucker said that current focus of the hedge-fund assets were in the continental United States, which accounts for 45% of overall asset allocation. But that would gradually decline with the nearly 9,900 funds in operation likely to shift towards Asia and Europe.

''These two regions would have a bigger say in the future, as institutional investors start to look at hedge funds as part of their risk-management strategy,'' he said.

Hedge funds have been viewed with suspicion in this part of the world after their key role in the attack on the Thai baht in 1997, which triggered an economic crisis that embroiled the entire region and other emerging markets such as Brazil and Russia.

But Mr Tucker says that hedge funds are likely to see robust growth, helped by institutional investors who are set to gradually pump in $1 trillion by 2010, up from $500 billion now.

Despite the ongoing sub-prime mortgage crisis and economic slowdown in the US, some hedge funds with more than $1 billion are still witnessing huge inflows from investors.

Hedge funds, Mr Tucker says, tend to flourish during downturns as was witnessed during the technology-related sell-off a few years ago. It was during this period, he says, that hedge funds saw tremendous growth. The industry swelled to 9,900 funds from 600 a few decades ago, and assets under management jumped to $1.8 trillion from a mere $38 billion in 1990.

He says that the funds these days are far more focused and specific than during the 1990s.

Today general funds account for a mere 10% of the global assets of hedge funds, down from 41% in the 1990s, with equity investments accounting for close to 28%.

Meanwhile, investors in hedge funds present at the seminar were soothed by the words of Nobel economics laureate Robert Mundell, who said that despite all the turmoil in the global financial markets, a US recession was still unlikely.

''Every time there was a downturn in the housing market in the US, the county's economy went in for a recession, but this time it seems that they are escaping it as the focus of the global economy has changed to other parts of the world,'' he said.

The European Central Bank has injected more liquidity than any bank in the world at 94 billion euros. In August it helped avert a liquidity crisis in the global markets and they seem to have recovered since then, said Mr Mundell.

He believes that despite the worst-case scenarios, the US economy would grow by 2% to 2.5% next year.

Umesh Pandey

Source : Bangkok Post

[LaoPo]

Madoff Investigators Claim to Find 100 Checks in Desk (Update4)....for family, friends, employees.....$ 173 Million....

By David Glovin

Jan. 8 (Bloomberg) -- Investigators searching the office desk of Bernard Madoff after his arrest found about 100 signed checks, totaling about $173 million, ready to be sent to family, friends, and employees, prosecutors said.

Assistant U.S. Attorney Marc Litt in Manhattan made the disclosure in a letter submitted today to U.S. Magistrate Judge Ronald Ellis, as part of a renewed request for the judge to jail Madoff prior to his trial. Ellis plans to rule on the government’s request tomorrow or on Jan. 12, according to the judge’s law clerk, who declined to be named. No court hearing is currently scheduled.

Prosecutors have previously disclosed that Madoff, before his Dec. 11 arrest, had said he wanted to transfer $200 million to $300 million of his investors’ money to “selected family, friends, and employees.” Litt’s letter today indicates that Madoff was ready to send the money out.

“The only thing that prevented the defendant from executing his plan to dissipate those assets was his arrest by the FBI on Dec. 11,” Litt wrote in his letter.

Madoff, 70, was arrested on Dec. 11 at his apartment and charged with one count of securities fraud for using billions of dollars from new investors to pay off older ones. Madoff told authorities that investors may have lost $50 billion, prosecutors said.

Madoff has been restricted to his Upper East Side home on $10 million bond that the government agreed to after Madoff’s arrest. He faces as long as 20 years in prison as well as a $5 million fine if convicted. Madoff’s assets were frozen in a related civil lawsuit brought by the Securities and Exchange Commission.

Bracelet, Watches

Prosecutors on Jan. 5 asked Ellis to jail Madoff because he mailed items including a diamond bracelet and watches to family in violation of a court-ordered asset freeze. In a letter to Ellis two days later, Madoff’s defense lawyer, Ira Sorkin, said his client didn’t know the order from the SEC lawsuit applied to his personal items and that he was merely sending sentimental items to family.

Sorkin said other steps besides revoking bail could be taken to address the government’s concerns, including putting all of Madoff’s jewelry in escrow and having guards search outgoing mail. Sorkin declined to comment today on the checks.

‘Preposterous’

“The defendant’s recent distribution of jewelry and watches demonstrates a continuing intention to benefit those close to him to the detriment of his victims,” Litt wrote today, adding that Madoff’s claim to have made an innocent mistake while reaching out to family is “preposterous.”

“That’s what telephones, e-mails, and personal letters are for,” Litt said.

Madoff is also scheduled to appear in court on Jan. 12 for a hearing in which prosecutors must present some of their evidence against him. Such hearings are extremely rare and are usually postponed or superseded by an indictment or another accusatory document.

If Madoff is indicted, he will be required to appear in court at some point to enter a formal plea to the charges against him.

The case is U.S. v. Madoff, 08-mag-2735, U.S. District Court, Southern District of New York (Manhattan).

-Bloomberg

LaoPo