Bernard Madoff paper trail leads to NYC warehouse (family in the business of fraud?)

NY POST ^ | 1/28/09 | TOM HAYS, AP Writer, AP news researcher Judith Ausuebel

[Liz]

Madoff's massive paper trail has led investigators to a Queens warehouse used to store old records ....boxes and file cabinets stuffed with documents could reveal more clues....City finance records indicate that Bernard L. Madoff Investment Securities leased space in the Queens' Astoria neighborhood........he says he acted alone yet Madoff Securities was a close-knit family business that employed two sons, his brother and benefited his wife..... © 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

[Liz]

.........he says he acted alone yet Madoff Securities was a close-knit family business that employed two sons, his brother and benefited his wife...

Peter Madoff was a Chief Compliance Officer at his brother Bernie's firm. Peter was also a director of several securities associations and exchanges. Peter's daughter Shana, was Bernie' firm's compliance officer. Here's Peter Madoff's house.

As the No. 2 executive at Bernard L. Madoff Investment Securities LLC, Peter Madoff worked side by side with his older brother Bernard for nearly 40 years. Peter was viewed as Bernie's heir apparent so the brothers tried to avoid flying together when they went on skiing trips together. Now, they are keeping their distance. Peter has stopped coming into the office and isn't talking publicly about his role at the securities firm, where he headed trading operations. Peter's daughter also joined the family business. She worked primarily as a "compliance lawyer" at Madoff Securities' market-making arm at the time of her uncle's arrest.

Peter and Shana both attended Fordham Law School. So did Meaghan Cheung, one of the SEC investigators of Harry Markopolos' November 2005 complaint. Cheung and her superior Doria Bachenheimer, who signed off on the case, both have left SEC for personal reasons since September of last year, just a few months before Bernard Madoff confessed and was arrested.

Bernie's wife Ruth's signature is on some of the "investment" documents--apparently Ruth was Bernie's bookkeeper.

[Anti-Bubba182]

Dad is trying to protect his sons. If they are involved they
need to go down the toilet too.

[M. Espinola]

If this was anybody else they already be up the river.

[Hildy]

I just don’t understand how this could have gone on as long as it did without the government finding out about it. What about taxes? It truly makes no sense..and if it does...our country is so far worse off than we could ever imagine.

[mission9]

It is such a bad Groucho Marx style joke but, Who would ever be dumb enough to invest with a guy named Bernie Made-Off? House arrest? Timmy Turbo Tax should be under house arrest, this guy deserves solitary confinement.

[Liz]

Who would ever be dumb enough to invest with a guy named Bernie Made-Off?

THEY HAD TO KNOW THIS WAS A SCAM. Bernie‘s investors were savvy, astute successful business people, accustomed to picking apart and analyzing financial statements. WANT MORE PROOF? Bernie's "investors" were writing HUGE PERSONAL checks to Madoff's subrosa separate "investment" vehicle that was NOT listed on the Securities Exchange. This is clearly a money laundering, tax evasion modus.

It is impossible to believe no wrongdoing was ever found.....in light of cascading news reports about the shady business methods Madoff used.

Madoff was examined at least eight times in the last 16 years by the SEC and other regulators......... More likely fraud was staring L/E in the face but was NEVER ACTED UPON due to the status, power and influence Madoff wielded.

Even more disturbing, the very same people he was scamming rushed to Madoff's defense whenever fraud issues were raised. One financier who sounded the alarm a few years back was accused of being anti-Semitic..... by Madoff's investors.

Clearly, Madoff's investors who waved off investigations using the anti-Semite banner have obstructed and delayed US justice and played a huge role in advancing the Madoff scam. Madoff himself might have encouraged the anti-Semite allegation b/c he knew it would forestall examination of his fraudulent operation.

BACKGROUND The now-famous 2005 Markopolis Report to the SEC raised the fraud issues and yet the SEC turned a blind eye....However, it must be noted that the SEC backed-off investigating Madoff NOT because they are incompetent, but because SEC investigators risked losing their jobs if they zeroed in on Madoff.

CAREER KILLER In the ranks of L/E, it is NOT advisable to imply people of Jewish heritage are doing something illegal---even moreso, it is a career killer to suggest it. FBI agents have been lacerated and condemned----even losing their jobs. Madoff's concentrating his efforts on religious-affinity investors certainly validates this---Madoff seemed to know L/E dared not suggest he was doing something illegal.

This no-no applies to all facets of government. Cascading stories of mega-wealthy Madoff investors living lives of luxury inside posh gated communities coast-to-coast, must be especially painful---b/c the US Census Bureau was asked to stop reporting its findings that Jewish-Americans are the nation's wealthiest.

Politicians at these sham hearings are implicitly defending the scam---(not asking the right questions is a cover-up). Pols fear losing big buck campaign donations and voting blocs they assiduously court.

NEEDS TO BE DONE NOW Investigators should demand all records detailing the number of times and places his investors played the anti-Semitic card to wave off investigations of Madoff. Americans need to know how many times Madoff investors caused L/E investigators to lose their jobs for going after Madoff. Madoff investors who colluded to obstruct and delay US justice played a huge role in advancing the Madoff scam.

Law enforcement is looking at the legal parameters of prosecutable crimes including collusion, making false statements to federal officials, obstructing proceedings before federal agencies, conspiracy, and obstructing and delaying US justice.........all felonies.

[Liz]

Timmy Turbo Tax should be under house arrest, this guy deserves solitary confinement.

RESUME Timothy F. Geithner: President, CEO of the Federal Reserve Bank of New York Vice chairman and a permanent member of the Federal Open Market Committee Department of Treasury in 1988 Under Secretary of the Treasury for International Affairs from 1999 to 2001 under Secretaries Robert Rubin and Lawrence Summers. Director of the Policy Development and Review Department at the International Monetary Fund from 2001 until 2003. Worked for Kissinger Associates, Inc. Chairman of the G-10’s Committee on Payment and Settlement Systems of the Bank for International Settlements. Member of the Council on Foreign Relations Group of Thirty member of the board of directors of the Center for Global Development in Washington, D.C.; Board of trustees of the RAND Corporation Trustee of the Economic Club of New York.

"Geeze I hope they don't audit all my bank accounts, investments,
or start looking into my island-hopping trips offshore with Madoff."

[Anti-Bubba182]

"..In the ranks of L/E, it is NOT advisable to imply people of Jewish heritage are doing something illegal---even moreso, it is a career killer to suggest it. FBI agents have been lacerated and condemned----even losing their jobs...""

Go Screw Yourself!

[ZeitgeistSurfer]

Are you ghost-writing for Pat Buchanan? Let us know when you have some facts to back up your anti-semitic rants.

[bert]

......I just don’t understand how this could have gone on as long as it did without the government finding out about it. .....

The answer is quite simple. The government had no reason to be involved. As long as statements reflected gains, the marks had no reason to complain. No complaints, no inquiry.

If some wanted some cash out, they got it none the wiser.

The whole point of the operation was to make money. If the monthly statements showed money being made, all was well

[mnehring]

Huh? Where did you get that ‘antisemitic statement’ stuff from? Do you have a link?

[PapaBear3625]

Clearly, Madoff's investors who waved off investigations using the anti-Semite banner have obstructed and delayed US justice and played a huge role in advancing the Madoff scam.

One of two main possibilities:

(1) They knew Madoff was running something, but thought it was insider trading, they were benefiting from it, and didn't want to be made to return those spectacular winnings.

(2) Madoff was running a money-laundering operation to get their money out of the US to offshore accounts.

[mnehring]

I think you hit the nail on the head, if it never had any red flags come up, it never hit a radar.. a lot of scams like this go on for a long time before being discovered because they are structured in a way to mask the fraud and keep people hooked in the scam. After all, look how long Social Security has been going and it basically operates the same way.

A lot of similar scams broke open in other market downturns as well, some had been going for years.

[Liz]

The Bernie Madoff I Knew, BY Laura Goldman (her first-person account)
Dec 26, 2008
http://pajamasmedia.com/blog/the-bernie-madoff-i-knew/

When I heard the news of Bernard Madoff’s arrest, I breathed a sigh of relief. “Thank God, I dodged that bullet” was my first thought. For sure, there was no gloating on my part. Anyone, who has been in the brokerage business for a long time, has been preyed on by con artists more than once.

As a broker, you try your best to avoid them, but there is always one that slips through where your guard is down. Madoff and my paths crossed in Palm Beach over 10 years ago. We were both scouring for clients there, albeit on different rungs of the social and economic ladder. My office was the lunch counter at Green’s Pharmacy while Bernard’s was the much grander Palm Beach Country Club.

Hearing whispers of his investment prowess, I approached “Uncle Bernie” one day and asked to meet him to discuss referring clients to him. Madoff’s clients bragged that he showed consistent returns of 10-18% each year and rarely had a down month.

At the meeting, Bernie, known as the Jewish T-bill, was very charming and low key. Bernard, the former chairman of the NASDAQ stock exchange, did not want to answer questions about his investment business and strategy.

He only grudgingly admitted that he employed a split conversion strategy that used both put and call options. I did not know what to make of his opacity.

I was discomfited by his saying how lucky that I was that he allowed me to invest with him.

The structure of Madoff’s investment also concerned me. Similar investments would have been established as a hedge fund with a separate custodian of the assets. The general partner of a hedge fund takes a management fee and a percent of the profits. Mr. Madoff insisted on keeping the assets in house at his own brokerage firm, but only charged commissions, which meant a lower payout for him.

Madoff, always the salesman, assuaged my doubts about the investment structure. “I make up for the lower fees with the additional volume of investments that my fee structure attracts.”

The consistency in returns, the small size of the auditing firm, and the structure of the investment were troubling, but they were not the deal breaker for me. Since my office had previously been in the same building as the Philadelphia Stock and Options Exchange, I knew many of the employees of the exchange and leading market makers.

When I called them, all of them said that they knew Bernie but did not trade with him. Even though he said that he traded his options over the counter, it still seemed strange to me that none of the giants in the tight-knit options world traded with him. After 45 minutes of detective work, I passed on the investment.

Even with the red flags raised on the investment, I struggled with turning down the investment opportunity. I was worried that my cautiousness was causing me to miss a great opportunity to earn lots of money. The product that Bernie Madoff had “created” would have been as easy to sell as ice water on a hot summer day.

After turning down the opportunity, I frequently encountered clients of Bernard Madoff. Most had the lion’s share of their assets invested with him.

My suggestions to diversify their assets fell on deaf ears. Sadly, many Jews believed in Bernie Madoff more than they believed in God and were just as unlikely to forsake him.

Even though the drumbeat of rumors about Bernie’s business eventually grew louder in the financial community, there was nothing that I could do about it. I could not take on someone with the stature of Bernie without proof in black and white.

I wasn’t the only one with doubts. In 2001, Barrons and MAR Hedge Fund Report wrote scathing reviews of Bernie’s investment business.

The title of the MAR article did not pull any punches — “Madoff tops the charts; Skeptics ask how.” Barron’s was also hard-hitting. “The recent MAR Hedge report, for example, cited more than a dozen hedge fund professionals, including current and former Madoff traders, who questioned why no one had been able to duplicate Madoff’s returns using this strategy.

Likewise, three option strategists at major investment banks told Barron’s they couldn’t understand how Madoff churns out such numbers. Adds a former Madoff investor: “Anybody who’s a seasoned hedge-fund investor knows the split-strike conversion is not the whole story. To take it at face value is a bit naïve.”

These articles gave me an excuse to contact Madoff’s clients again.

Instead of being thanked for sending them the articles, I was attacked. “How dare you say anything bad about Bernie.” Some dismissed the attacks on Bernie as anti-Semitism.

Several of those who received my mailing asked me questions. Still, even though I planted the seeds of suspicion, they did not grow. Most decided to continue investing with Bernie. They told me that they did not want to give up a good thing. They did not believe that the music would stop and they would be left without a chair.

Now that the music has stopped, many of Madoff’s clients are finally singing my name. Unfortunately, there is nothing that I can do for them now. I wish that I could say that this type of fraud would not happen again, but unfortunately I can’t. Now that Bernie has proved how easy is to do, one can be sure that con artists will be falling over themselves to imitate him.

[Liz]

Don’t you ever, EVER post such insults to me, again.

I will not sit here and be judged by you or anyone else.

We are posting THE TRUTH here on FR ....if you don't like it, get off the site.

[Liz]

One of two possibilities: (1) His investors knew Madoff was running something, but thought it was insider trading, they were benefiting from it, and didn't want to be made to return those spectacular winnings.

You nailed it----- Wall Street insiders figure Madoff was laundering Billions from the Russian mob. When he confessed, Bernie said he flim-flammed $50B but investigators could only find $17-30B---difference is the Ruski's. Probably why Bernie is walking around---the Ruskis want to know where Bernie hid their money. Once he tells all, he can say his prayers behind bars.

(2) Madoff was running a money-laundering operation to get their money out of the US to offshore accounts.

Seems investors were in on the game and figured if Bernie was helping the Ruskis steal, they oughta make a few bucks on it......out of sight of the taxman and US banking laws.

POSTED FOR YOUR REFERENCE---RUSSIAN PREDATORS RIDE US GRAVY TRAIN These predator "immigrants" get on the US gravy train as soon as they get off the boat and learn to say "gimmee" in English. US taxpayers provides all kinds of federal, state and city handouts and job set-asides (jobs taken from born Americans)......soon as these illegals say the magic words: "political asylum." Pretending to be "victims" is a lucrative con game.

The FBI has fingered the Russian mob in all kinds of frauds---billion-dollar staged auto accidents, billion-dollar Medicare/Aid fraud, billion-dollar insurance and securities fraud, ID theft, sex crimes, child porn......you name it.

Cable-TV's History Channel did an excellent expose of the depravity of Russian organized crime. The expose asserted that before they land here, Russian criminals stop off in Israel to get all the available freebies (some of the Russian rascals pretend to be Jewish to make Jews look bad, and to fraudulently pocket free Israeli benefits). They come to the US whining about "political asylumm" pleading "religious persecution" and immediately get on the US gravy train, sucking up US tax dollars like it was going out of style.

One TV report chronicled the lifestyle of an unemployed 30'ish Russian immigrant---a trained engineer----picking up US welfare checks while his wife was lolling around getting her hair and nails done courtesy of US taxpayers. Russian emigres arriving in the US are treated like royalty, with tax-subsidized government grants, tax-subsidized housing, and job set-asides waiting for them......jobs taken from taxpaying born-Americans.

Russian TV runs a nightly show outlining the US giveaway programs, how to fill out the forms etc, which US offices to apply to, etc. The sense of entitlement is outrageous. Preying off working class Americans is their livelihood.

===========================================

REFERENCE----EXECUTIVE SUMMARY THE TRI-STATE JOINT SOVIET-EMIGRE ORGANIZED CRIME PROJECT. RUSSIAN-EMIGRE CRIME IN THE TRI-STATE AREA

Gangsters from the former Soviet Union have established a strong and abiding presence in the New York/New Jersey/Pennsylvania region, engaging in a wide array of crimes that range from sophisticated financial frauds to narcotics trafficking to murder.

Evidence also shows that members of disparate Russian-emigre crime groups here have the potential to develop into one of the most formidable organized crime challenges to law enforcement since the advent of La Cosa Nostra.

These are among the key findings of the Tri-State Joint Soviet-Emigre Organized Crime Project, a cooperative research and investigative effort launched four years ago by four agencies in New York, New Jersey and Pennsylvania - the New York Organized Crime Task Force, the New York State Commission of Investigation, the New Jersey State Commission of Investigation and the Pennsylvania Crime Commission.

Investigative agents and staff from these agencies conducted the project in conjunction with criminal justice experts from Rutgers University. The Project's report presents the first comprehensive public assessment of the threat posed to this region by criminal elements emanating from within the former Soviet Union.

The report catalogues the history and growth of Russian-emigre crime networks, from their core base in the Brighton Beach section of Brooklyn to their current reach well beyond the New York metropolitan area into the counties of central New Jersey and the suburbs of Philadelphia.

One of the most troubling aspects is evidence of links between individuals here and criminal elements in the former Soviet Union, a phenomenon that lends a disturbing and complex international dimension to this emerging domestic law enforcement problem.The range of criminal and illicit activities linked to these groups is impressive.

The Project report details Russian-emigre involvement in a variety of highly sophisticated frauds and confidence schemes, financial crimes, including money laundering, counterfeiting and securities fraud, narcotics trafficking and an assortment of vice crimes.Russian-emigre criminals are no strangers to violence either.

THE NATURE OF RUSSIAN-EMIGRE CRIME

Crimes of Deception

Motor Fuel Tax Fraud

Insurance and Entitlement Fraud

Confidence Schemes

Counterfeiting

Violent Crimes

Homicide/Attempted Homicide

Extortion and Kidnapping

Drug Trafficking

Money Laundering

Vice Crimes (Regpay, a Florida credit card processing company operated by Byelorussians, was nailed for processing online child porn payments; Minx, Belarus, once a constituent republic of the Soviet Union (independent since 1991) is the country of origin of many of these predators now thieving on US soil.

--SNIP--PDF LONG READ http://64.233.167.104/search?q=cache:Ahm0dOHcKHEJ:www.state.nj.us/sci/pdf/russian.pdf

===========================================

Lord Jesus, and all the saints in heaven. Good golly, now that I've outed the scoundrels, they'll have to kill me (sniffle).

Yawn....I'm so scared (snore-zzzzz). No problem, fellow posters, I notified the US DOJ, FBI, the CIA, Interpol, Scotland Yard, the Royal Canadian Mounted Police, the Carbinieri, Mossad and the Mobile Marine Tactical Sharpshooter Unit.

And I named names.

[mnehring]

The challenge I have with this is: Some dismissed the attacks on Bernie as anti-Semitism.

The author does use very clear parenthetical quotes at times, but then makes this general statement. I doubt this represents any sort of pattern. If the author deemed it important or if the statement really stood out, he would have quoted a direct parenthetical as he has done others. Probably a case where someone threw something out, not a major practice or conspiracy to use that as a cover.

[mnehring]

The ruskies... now that is an interesting twist..

[ZeitgeistSurfer]

Capital letters are always the sure sign of a conspiracy-oriented ranter. I've been on FR long enough to recognize the signs. By the way, your "theory" is one that is quite popular on the well-known violently anti-semitic website Judical-Inc. Of course, there are no facts, just bold statements about mony laundering by Russian Jewish and Israeli mafia types.

You said:

CAREER KILLER In the ranks of L/E, it is NOT advisable to imply people of Jewish heritage are doing something illegal---even moreso, it is a career killer to suggest it. FBI agents have been lacerated and condemned----even losing their jobs.

Please site the facts that this statement is based on.

[Liz]

Mmmmmmm….......but it does have impact since a very savvy, smart gal thought it was significant enough to mention.

BTW, Abe Foxman who heads the ADL also asserted that criticism of Madoff was anti-Semitic.....the piece might still be up on his web site.

So if you add up all the innuendos and known allegations and facts, etc, it does seem to be a pattern.

Certainly we can all agree that we should discuss all of the compelling reasons why a $50B scam was able to prosper for years and years.