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Bernie's Gang: Who's Next To Go Down?
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(July 13, 2009 - Monday) - http://news.alibaba.com/article/detail/entrepreneur/100134249-1-bernie%2527s-gang%253A-who%2527s-next-go.html
There are many questions unanswered in the wake of the sentence to jail of Bernie Madoff for 150 years, an appropriate eternity for such a scoundrel.
For justice to be properly served, we must find out and prosecute those persons who played a role, any role, in the destruction of ordinary people's lives and wherewithal.
Leaving Ruth Madoff $2.5 million is a proper pittance, but if she was an accomplice to her husband's deeds, she should rejoin him somewhere in the federal prison system. She can join Bernie at some mid-range security prison within 500 miles of New York. Same goes for his brother Peter, or for his two sons, or for that matter any of his closest friends and clients who are found to have profited improperly from Bernie's transactions, which, of course, never took place.
How do run of the mill investors make about 10% a year, while others who had accounts with Bernie make returns of 30% to 750%. All in bogus, fabricated transactions. Bankruptcy Trustee Irving Picard says that a favored few got returns of 100% or more, redirected from other people's money. Whoever took massive sums from the Madoff operation since 1995 is a possible target of the government's continuing investigation.
Picard is now targeting profits obtained by prominent investor Jeffry M. Picower and his wife, Barbara. Decisions Inc. of Hawthorne, N.Y., was the investment vehicle through which Picower allegedly took out $5.8 billion from Bernard Madoff Investment Securities, LLC, between December 1995 and April 2007.
Picard claims that Picower received special and suspiciously beneficial treatment from Madoff in a suit filed in U.S. Bankruptcy Court in May. Picower is a former attorney, accountant and tax shelter promoter who lives in Palm Beach, Fla., and Fairfield, Conn. Many of his personal accounts with Madoff were entities through which Decisions Inc. and Picower transacted business with Madoff.
What's especially curious is that in November 1999, Picower's accounts had a negative cash balance of $3.8 billion with Madoff Securities, which later grew to $6.3 billion according to the lawsuit. This is odd because no broker is supposed to allow a client to hold a negative account.
"Even more brazenly, one account combined outrageous returns with backdating that occurred before the account was even opened," charges Trustee Irving Picard. According to the suit, "There were 57 purported purchases of securities between Jan. 10 and Jan. 24, 2006, almost three months before the account was opened or funded."
If proved, these allegedly "backdated" trades would suggest that either the Picowers or their aides knew that Madoff was committing fraud. The suit charges that "Picower and the other defendants also knew or should have known that they were reaping the benefits of manipulated purported returns, false documents and fictitious profit."
The Picowers deny any wrongdoing and insist they are innocent victims of Madoff.
If indeed Picower got special treatment, could some of Picower's $5.8 billion in payouts from Madoff have been meant for Madoff himself? If the allegations are correct, why on earth would Picower deserve backdated transactions, even if they were bogus? We need to see the accounts of other "Friends of Bernie" to see if they were handed other people's money in such large amounts as to make them on paper far wealthier than most of the other long-term Madoff investors. If so, it suggests that others beyond Bernie, his accountant and right-hand assistant at the firm may be complicit in this historic rip-off. And if so, how did they ever think it would not sooner or later be found out.
Even more shocking was Harry Markopoulos' letter to the SEC on Nov. 7, 2005, entitled "The World's Largest Hedge Fund is a Fraud." In it, he wrote, "I have also spoken to the heads of various Wall Street equity derivative trading desks, and every one of the senior managers I spoke with told me that Bernie Madoff was a fraud."
The whole scenario is damning as to the ability to fleece investors 76 years after the creation of the SEC.
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