MADOFF FEEDER FUND CHARGED (Bernie caught on tape coaching execs to feed SEC lies)

NY POST ^ | 4/2/09 | KAJA WHITEHOUSE

[Liz]

......a Madoff feeder fund lied about its due diligence .......there was no disclosure that Madoff was serving as custodian of his own assets. Fairfield Greenwich was motivated by high fees, Massachusetts L/E said. A taped conversation placed in evidence had Madoff allegedly coaching Fairfield Greenwich execs about lying to the SEC after Harry Markopolos blew the whistle on the scam. Madoff coaches them not to be "exact" on details of their relationship with him, and to be "casual" in their conversations.....the SEC should be told he has "Chinese Walls" between his brokerage and investment arms. The complaint "leaves out the fact that their employee reported his conversation with Madoff to the SEC," Fairfield complained in response.

[Liz]

BACKSTORIES Fairfield, Conn says hedge funds knowingly helped Madoff's $65B Ponzi scheme. The town lost some $42M in pension money......and convinced a judge to freeze the assets of Walter Noel and Jeff Tucker, heads of fallen NY hedge-fund firm Fairfield Greenwich; Robert Schulman, retired chairman/CEO of Tremont Group, unit of insurance giant Massachusetts Mutual Life Insurance Co; and Sandra Manzke, founder of Maxam Capital Management.....Attorneys for the pension, which serves around 1,500 workers, say hedgers believed Madoff was engaged in illegal activities beyond the Ponzi scheme.......that Madoff was using insider trading info, known as front-running, from his brokerage arm......the first claim that says what everyone on Wall Street is saying......that Madoff was front-running before the discovery of his Ponzi scheme.

FEDERAL RESERVE INFO A FACTOR? Madoff's connections to J Ezra Merkin and Stephen Fineberg's company---Cerebrus---could also mean the connivers were stealing Federal Reserve insider info. Ex-Treasury Sect John Snow headed Cerebrus. Knowing Federal Reserves moves in advance would make zillions for the thieves...........on top of the billions they were swilling elsewere. These termites were running rampant allover the US government---Merkin and Feinberg's auto companies received billions in govt bailouts.

Chrysler/Cerebrus’ Fineberg and GMAC/ Merkin-----also co-owned an offshore bank in which to stash the loot......out of sight of the IRS and US banking laws. Betcha dollars to donuts Madoff was in on that scam, too.

BACKSTORY GMAC chair J Ezra Merkin (a Madoffian) and Chrysler's Stephen A. Feinberg (owns private equity firm---Cerberus Capital Management LP). The two partnered to buy Bank Leumi from the Israeli government for $500 million.

BAILOUT SWILLERS Stephen A. Fineberg's private equity firm---Cerberus Capital Management LP--- also owns Chrysler Motors. The US Treasury bought a $5 billion stake in GMAC, and lent $1 billion to GM. This latest loan is IN ADDITION to the $13.4 billion the US Treasury lent earlier to J Ezra Merkin's GM, and Fineberg's Chrysler.

SWILLING TIMELINE In 2006, GM sold 51% of Merkin's GMAC to Feinberg's private equity firm Cerberus Capital Management LP (which also owns Chrysler).

HOGGING AT THE PUBLIC TROUGH In May 2004, Feinberg's "private investment group," Cerberus Capital Management, LP (Cerebrus is the three-headed dog that guards Hades), became majority owner of IAP Worldwide Services, Inc, one of the US Army’s largest contractors in Iraq. In Afghanistan, Feinberg's IAP runs a drug/addiction center" in Kunduz---Kunduz is the largest opium supplier in the world. BUSY LITTLE BEAVER IAP also provides infrastructure support for the British Ministry of Defence in Kandahar....apart from supporting the US Army in Basra.

TIMELINE On October 19, 2006, John W. Snow, Secretary of the Treasury under George H.W. Bush, was named head of Cerebrus.

BAILED OUT AND STILL SWILLING Stephen A. Feinberg's IAP also serves a broad array of federal clients including the US DOD, NASA, the US Geological Survey, the US Agency for International Development, the IRS, and a variety of other federal agencies.

MADOFF'S SIB PETER FACES DEEP FREEZE (can spend $10,000 p/m) Bernie Madoff's investment business partner and brother, Peter, secretly signed a deal with federal prosecutors on Christmas Eve to voluntarily freeze his assets. That deal came to light as Peter's lawyer unsuccessfully asked a Brooklyn appeals judge to toss out a temporary freeze on Peter's assets obtained last week by a 22-year-old law student whose $480,000 trust fund was lost in Bernie's Ponzi scheme. Peter Madoff -- who has not been criminally charged -- was trustee of the fund belonging to Andrew Ross Samuels, and had placed that fund in Bernie's clutches. Peter's voluntary freeze agreement to with prosecutors allows him to spend up to $10,000 per month on living expenses, and requires him to provide receipts for any transaction of more than $150. But the temporary freeze obtained by Samuels from a Nassau County Supreme Court judge is much stricter: It bars Peter from withdrawing money from any account or selling property. SOURCE http://www.nypost.com/seven/04012009/business/madoffs_sib_peter_faces_deep_freeze_162260.htm

Bernie Madoff's brother and business partner secretly signed a deal to voluntarily freeze assets......as Peter's lawyer unsuccessfully asked a judge to toss out a temporary freeze obtained by a 22-year-old law student. Peter has not been criminally charged -- he was trustee of Andrew Ross Samuels $480,000 trust fund, and placed it in Bernie's clutches. Peter's agreement lets him spend up to $10,000 per month on living expenses....he must provide receipts for transactions over $150. .....the newer freeze bars Peter from account withdrawals, or property sales. Whistleblower Harry Markopolos says Madoff’s brother Peter audited the firm’s investments and that ONLY Peter Madoff was "authorized to audit" fund performance "for reasons of secrecy".

Among other things, 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 Shana (married to a SEC exec who now works elsewhere) 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.

THE RELIGIOUS, SOCIAL, AND BUSINESS LABYRINTH OF
4800 INVESTORS MADOFF USED TO RAKE IN BILLIONS.

MAP IS INTERACTIVE AT WEB SITE

WEB SITE http://news.muckety.com/2008/12/28/madoff-used-social-family-networks-to-rake-in-billions/9031

ANOTHER MADOFF FEEDER FUND Brighton Co Investments is headed by Stanley Chais, a Beverly Hills "philanthropist" who served on "charitable" boards with Madoff. Chais (pronounced Chase) told the Jewish Journal of Los Angeles that he personally invested with Madoff but also "facilitated" others who wished to do likewise. However, spokesmen for the SEC and the California Dept of Corporations said they could find no record of Chais registering as an investment advisor or a broker.

Stanley Chais offers remarks at the Weizmann Institute of Science.

[iopscusa]

Good work LIZ! Will these crooks finally get some attention from our vaulted DOJ, Chrysler/Cerebrus’ Fineberg and GMAC/ Merkin??? And what about these offshore banks?

[Liz]

No question---Madoff's actual frauds have yet to be uncovered. IMO, Madoff's Ponzi was a front to facilitate huge financial frauds for others. EXAMPLE Madoff's pal Ira Rennert "invested" some $200 million w/ Madoff. Read on.

BUSINESS WEEK---CIRCA 2003

EXCERPT Madoff's pal Ira Rennert's tale is instructive at a time when a growing legion of discredited star analysts and bankers, who symbolize the excesses of the '90s, are being banned from the industry or are under investigation. As Rennert's career shows, people who are penalized by the securities industry can easily--and legally--slip into other financial services and continue to take funds from investors.

Rennert refashioned himself as a consultant for the next 11 years, according to 2001 Who's Who in America. But it's not clear what type of consulting he did. In 1975, he emerged as a financier, arranging small leveraged buyouts and amassing an eclectic collection of unwanted companies that made everything from pet cages to butcher blocks.

In the late 1980s, Rennert became one of Wall Street's favored buyers of companies that no one else wanted. His first big deal was in 1988, when Renco bought a Warren (Ohio) steel company from its parent, LTV Steel Co., which was in bankruptcy, for $140 million. He renamed it WCI Steel Inc. and turned it around with the help of $250 million in junk bonds.

(Circa 2003) ......with the military buildup in the Mideast boosting demand for his Humvees and with the H2 selling well, it was a good time to sell. J.P. Morgan Chase & Co. is pitching Rennert's company---AM General in partnership with Arnold Schwarzenegger----to private investment funds, including the Carlyle Group and Chicago-based Madison Dearborn Partners.

General Motors Corp. has an option to buy 40% at the market price.

Rennert has done very well for himself. (1) He owns a plush duplex apartment furnished with antiques and Impressionist paintings on Manhattan's Park Avenue near his Rockefeller Center headquarters. (2) He has a palatial home in Israel, (3) a Gulfstream 5 jet, (4) and built a palatial mansion on 64.8 acres in tony Southampton, NY, built for an estimated $100 million (PICS below). The 100,000-square-foot complex angered neighbors and inspired James Brady's novel, The House that Ate the Hamptons. Hamptonites complain the palace is actually a synagogue/residence/yeshiva for Orthodox religionists.

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Madoff's buddy Ira Rennert---is the owner of this obscenely palatial Hampton residence. Merkin and Madoff served together on the board of Yeshiva University, where Merkin Chaired the Investment Committee and Madoff was treasurer.

Madoff also chaired the University's Sy Syms' School of Business. (Syms is a well-known retailer and a director of the Israel Discount Bank---the US DOJ leaned on the Israel Discount Bank after finding evidence of money laundering.) Syms and his daughter are seen on PBS pushing programs they financed with a foundation.

Yeshiva University is a huge complex, and Orthodox religious stronghold---it maintains four campuses in New York City and a campus in Israel: along with dormitories, a library, a hospital and other medical facilities; several Graduate and Professional Schools, rabbinical schools, a museum, academic centers and institutes for high school level students, and centers for Israeli studies in New York, and in Israel, etc, etc, etc.

Another Madoffian----J Ezra Merkin--- his father Hermann, was a fur-trader who became director of the Israel Discount Bank of New York. The US DOJ leaned on the Israel Discount Bank after finding evidence of money laundering.

This has tax evasion written all over it. Hamptonites complain this astoundingly palatial mega-mansion in the posh Hamptons is actually a "synagogue-residence-yeshiva" for Orthodox Judaism students. The complex---which rivals Versailles and Buckingham Palace----was built by Fifth Avenue Synagogue board chair Ira Rennert. The average "hate-filled anti-Semite" might ask: How can Orthodox religionists be designated "disadvantaged minorities" when they are investing hundreds of millions of dollars w/ Madoff?

BGRND Orthodox Judaism was designated a "disadvantaged minority" under Lyndon Johnson's "Great Society." This meant that Orthodox became beneficiaries of millions upon millions of tax dollars----federal community development funds. Federal and city assistance received over the years include CETA (Comprehensive Employment Training Act) monies, Section 8 housing assistance, school meal funds, Headstart, HUD grants, and low interest loans. In 1984, federal aid was expanded when the federal government included Orthodox in a priority group of six disadvantaged minorities recognized by all federal agencies.

[Liz]

Will these crooks----Chrysler/Cerebrus’ Fineberg and GMAC/ Merkin----- finally get some attention from our vaunted DOJ, And what about these offshore banks?

L/E just uncovered Madoff hid some assets in Gibraltar. Madoff's accounts at New York Mellon Bank are being looked at ....... investigators say the accounts appear to have sent and received money from offshore locations.

Note well that the SEC received complaints only from Madoff's competitors. Not one Madoff investor ever filed a complaint.

The legal principle of “condonation” --- meaning implied forgiveness for certain behavior should foreclose any ideas that taxpayers are gonna bailout these mega-millionaires (who most assuredly have money stashed offshore). The so-called investors implicitly “condoned” Madoff’s actions over a period of time--sometimes for decades---- willingly acquiescing to Madoff's activities in several ways:

(1) Sending Madoff enormous sums of money, sums that were spread out over time (some families invested for generations), even AFTER they had the opportunity to assess their investments;

(2) Referring other investors to Madoff (if the investment was so bad, why did they bring in other investors?);

(3) Taking profits out of the investment, rolling it over, or putting more money in;

(4) Writing PERSONAL checks to Madoff's subrosa spinoff vehicle that was not listed on the SEC (which could be construed as a tax evasion--money laundering scheme).

[Liz]

MERKIN'S CAYMAN ISLAND HEDGE FUND As GMAC chairman, J Ezra Merkin ran hedge funds as a sideline and was feeding funds into Madoff's operation (and pocketing hundreds of $millions in fees)-----Merkin's name is connected to (1) Ariel Fund, based in the Cayman Islands (an infamous money laundering haven--a partnership between Merkin and London's Fortis Bank), (2) Ascot Partners, (3) general partner of Gabriel Capital LP, a $5 billion family of hedge funds, and, (4) managing partner of Gotham Capital.

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6/23/00
Israel on black list of money launderers
Ha'aretz (Israeli newspaper)
By Dov Alfon, Ha'aretz Correspondent

PARIS - On a list of 15 countries "encouraging money laundering" published yesterday by a special investigative committee originally set up by the G-7, Israel features prominently and may face international sanctions in the coming months.

The publication of the list was preceded by three days of intense negotiations between the United States, Japan and the European Union, and was leaked to the French daily Le Monde which published it yesterday. It is still unclear if the 26 nation Finance Action Task Force (FATF), as the investigative committee is known, initiated the leak or was forced to hasten the list's publication, which was originally scheduled for Monday.

In addition to Israel, the "black list" includes Lebanon, Liechtenstein, Russia, Panama, the Bahamas, the Cayman Islands, the Cook Islands, Dominica, the Marshall Islands, Nauru, Niue, Panama, the Philippines, St. Kitts and the Grenadines. The exclusive list was chosen with diligence from a "gray list" which included 31 suspect states, among them Cyprus, Gibraltar, Monaco, and Antigua.

The difference between the two lists is that the "gray" one includes countries whose banking laws are tougher than those of countries on the "black list."

According to a spokesman for the FATF, Israel is on the list of 15 because it lacks legislation to counter the laundering of crime monies, including the fact that it does not require the declaration of cash deposits, and also because of "controversial" figures given by commercial banks.

The spokesman added that Israel informed the committee that it planned legislation on these issues for the next month - a month too late for the FATF. (Note: Orthodox political parties balked at the legislation.)

A source in the French Ministry of Trade told Ha'aretz that the list in which Israel has found itself is "the worst club in which to be a member in the international economy today (circa 2000).

[wildandcrazyrussian]

That's why I never liked the use of the word "Orthodox" by non-Christians, since the word itself was invented by the Greek Orthodox Christians about 200 AD to mean "Christian". ("ortho" = Greek word meaning "true" and "doxa" = Greek word meaning "glorification", hence in context "worship of Christ".)

So some of their members make millions of dollars by being classified as "disadvantaged", and the original Orthodox people get nothing but grief.

[Liz]

That’s interesting. Thanks for the clarification.

Perhaps “Orthodox” within the splendor of the Jewish faith..........means “worshipful anticipation” of the coming of Christ?