Madoff Surfaces as Investigations into Scam Continue

The NY Post caught Bernard Madoff, who admitted his business was actually Ponzi scheme and probably lost around $50 billion of investors' money, "skulking" out of his East 64th Street apartment building and calls him "the Grinch who stole...everything"—as well as the "Most Hated Man in NYC." The Daily News runs down some developments, like how the FBI is looking for witnesses (like "the auditors working from a New City, Rockland County, storefront who certified Madoff's investment firm as 'solvent'") and the NY Times says that, so far, Madoff's family does not appear to be involved in the scam.

Victims include individuals saving up for a nest egg, charities of some notable people (Senator Frank Lautenberg, Daily News owner Mort Zuckerman, Steven Spielberg) and billion-dollar hedge funds. Clusterstock says the victims falls into four groups, "Superrich Individuals, Little Guys, Funds + Banks, and Charities + Universities + Hospitals" (see their list).

One example: J. Ezra Merkin's Ascot Funds lost nearly all of its investors' money—$1.8 billion—because it invested mainly with Madoff. So now Ascot clients have retained a lawyer because, the Times reports, "Mr. Merkin was charging them an annual fee of 1.5 percent of their investments in exchange for his services, which now appear to be little more than turning over the money to another investor altogether."

And Oppenheimer Funds' Tremont hedge fund had over half its $5.8 billion funds with Madoff. Bloomberg News reports, "Tremont, which manages a total of $5.8 billion, would have made roughly $62 million this year peddling funds that are solely run by Madoff... Hedge funds that invested with the 70-year-old Queens, New York-native charged fees to their clients for the task of vetting the fund."

Now it turns out that Madoff was keeping multiple sets of books and that it could take months for investigators to unravel his lies. One woman, a CPA who lost $500,000 with Madoff, told the Daily News she was eager to speak to the swindler, "I want to talk to him. I hope to speak with him. Tell him what I think of him. First, I'll ask why he did it. Then I'll proceed to use some expletives." Well, the SIPC says investors may be protected for up to $500,000, which is probably bittersweet when you've lost billions. Also: The Department of Justice's website for victims of Madoff's fraud ("We know that investors are anxious to learn whatever they can about the status of their investments and the assets of the Madoff companies. Although we cannot provide further details at this time, please be assured that all those involved are working diligently to investigate this matter and to locate and preserve assets that can be used for restitution to defrauded investors.")

Contact the author of this article or email tips@gothamist.com with further questions, comments or tips.

By Jen Chung in News on December 16, 2008 6:20 PM

Comments [rss]

Amanda Harletsch

What a megascapegoat.

Leon Freilich

GONIF WITH THE WIND

From childhood on he was a gonif,

His mama always said,

A rascal who would pocket stuff

As soon as he got out of bed.

A missing check, a wallet gone,

At home or on a journey,

Anything pilfered could be found

On smiling little Bernie.

But a gonif surely has his charms

And everyone was amused

So what he couldn't swipe was given,

Nothing was refused

And so he grew up to become

The crookedest and the smartest,

The fifty-billion-dollar picture

Of the Ponzi artist.

The morale of this financial tale,

Too precious to be bought,

Is, Borrow a bundle from your brood,

Before the gonif's caught.

Snoopy

"It takes a tough man to tenderize his friends."

Can you imagine if he was in the poultry business?

Brooklynbobby

Bagel nights!!!

rlb14

I'd like to see the personal property seized for all these white collar crooks. All houses, cars, jewelry, investments (probably not worth much now), art, all of it. They can keep $150,000 and one property if it is paid off.

r1b2

This money is gone. He's still sitting on a billion or so, in some secure Euro bank, but it's unlikely he'll ever see the light of day again. Even with a light sentence, he's a geezer. He'll die in jail. If he winds up in a country-club prison, there should be riots in the streets. I'm not suggesting he be sent to SingSing and placed in population, but this guy shouldn't spend his last few years golfing.

williambanzai7

PALM BEACH GOT RUN OVER BY MADOFF'S PONZI REINDEER

(Grandma Got Run Over By a Reindeer)

WilliamBanzai7

(chorus)

Palm Beach got run over by Bernie Madoff's Ponzi reindeer

Just two weeks before Christmas Eve

You can say there's no such thing as a Wall Street scamster

But as for we in America, we believe

He'd been chalking up bogus Alpha

So the SEC said he had to go

And as he waltzed out of his lair on Third Avenue

Defiant as he was, he said, "Positive returns, hell no!"

When they woke up yesterday morning

It was clear the Palm Beach clique had been attacked

May as well stick a note to their own foreheads

Saying, "Oh Lord, please give us our money back!!"

(repeat chorus)

Now we're all so proud of our regulators

They've been taking this so well

See them crammed in Madoff's office

Knowing that SEC Chairman Cox will soon be sent to pink slip h-e-l-l

It won't be a Merry Christmas thanks to Madoff

Nor a Happy Hannukah as well

And we just can't help but wonder

Dosn't all of Wall Street have that pungent Ponzi smell?

(repeat chorus)

Now that Madoff's books are on the table

See all the other asset managers dance a jig (Ah!)

And the bogus billion dollar earnings

That not surprisingly had been rigged!

Be forewarned all you rich country club investors

Better watch out for yourselves!

You should not be dreaming of serial Alpha

With hedge fund goofs who play golf better than yourselves!

(repeat chorus)

Paris68

Where does this guy get $10 million bail anyway? As far as I'm concerned, every viable asset he conceivably owns--cash, stock, real estate, clothing--should be frozen until this thing is unfolded.

Amanda Harletsch

A paramount example of the abusive patriarchal system

Felix Hoenikker

White collar criminals are not punished severely enough, nor are the pols who enable them.

One one side of his mouth, Schumer plays populist by throwing a few million to the rabble. Out of the other, he loosens regs to let rich white guys walk off with hundreds of billions.

Considering the impact on the nation as a whole, these SOBs should all be lynched.

If we're lucky someone will pop a cap in Madoff's head before he goes to trial. I cringe at the cost of prosecuting this d-bag given the legal talent he'll be able to afford.

chris lee

You mean nobody's whacked dis guy yet? What's da world comin' to?

babyhitler

I forgot to add that the black dude actually got LIFE in prison for stealing the pizza slice: http://findarticles.com/p/articles/mi_m1355/is_n20_v87/ai_16709220

Snoopy

That wasn't just a regular slice. The dude ordered double cheese with sausage. Do you know what that goes for in today's market?

Is it too late for me to invest in Madoff's incredible company?

NannyState

Jim Cramer, meet the real "Mad Money".

Rocknrope

Man, what a racket some of these funds were in:

Fund Crook: "Yes, pay me a percentage of your investment so I can manage your money."

Dumb Investor: "May I ask what your management strategy is?"

FC: "Um, giving it all to someone else and taking a percentage."

DI: "So...what do you do all day exactly?"

FC: "..."

JenChungsBaby

I know someone who's losing her high-paying job at the end of the month because the non-profit she works for has to close down after investing all its cash with Madoff. It's amazing that this guy is still walking around. How can you give bail to a guy like this?

PTG in nyc

Where's Cheney and Rumsfeld with the waterboarding when you need them?

"...it could take months for investigators to unravel his lies."

F that, torture the asshole! And release the black guy who stole the slice while we're at it.

Snoopy

He didn't lose just the $50 billion, look at how many friends he lost? And his good name. Bad bad Madoff, sit and stay.

NannyState

Some Chachim he turned out to be.

HughGass

If the black dude was smarter he would have stolen $50 billion instead of a $2.50 slice.

schadenfreudian mensch

Because black dudes who steal pizzas don't have $10 million bail money.

babyhitler

how is this guy walking free and living in a penthouse? a black dude steals a slice of pizza and he's in prison.

theevilone

I think he'd suffer more abuse if they strung him up in Boca.

His auditors had to be (1) non-existent (2) the stupidest people alive or (3) in on the deal. This wasn't some convoluted Enron scheme or the banks monkeying with credit derivatives. This guy claimed to own things he simply didn't own, which is the easy thing on the planet to find.

SP

He should be strung up from the end of a noose in Times Square.

ides_of_march

He's no different from the crooks who ran Fannie Mae, Freddie Mac, Bear Stearns, most of Congress etc....

This out-of-control white collar crime will not stop until these scumbags do hard time in a REAL prison; not the federal country club and health spa.