From Face-to-face at JPMorgan Chase - NYP, by Mark DeCambre, 2011 February 16
During an investors conference yesterday, the bank's legal eagle Stephen Cutler also said that JPMorgan planned on "defending itself vigorously" against accusations of being complicit in the massive Madoff scheme. Cutler referred to Madoff trustee Irving Picard's charges against JPMorgan as "unsubstantiated." ..... < snip > Jamie Dimon's JPMorgan Chase denied allegations that it turned a blind eye to telltale signs that Bernie Madoff was perpetrating a billion-dollar Ponzi operation.
In 1980s Madoff had his fund's account with Chemical Bank;
in 1992 Chemical bought Manufacturers Hanover Trust (Manny Hanny);
in 1996 Chemical Bank merged with Chase Manhattan Bank and assumed Chase name;
in 2000 Chase bought / merged with JPMorgan to form JPMorgan Chase;
in late 2004 JPMorgan Chase bought Chicago's Bank One;
shortly after the merger Bank One's President and COO Jamie Dimon became Chairman, President and CEO of JPMorgan Chase (current JPMorgan's corporate Headquarters at 270 Park Ave., NY, NY have been HQ of Manufacturers Hanover since it acquired the original Union Carbide Building in 1981.)
Interesting to note that Madoff had "liquidity problems" at the end of 2005; it suggests that he might have had unusually high rate of redemptions / withdrawal from his fund and had to to cover it by getting fresh capital, promising a higher rate of return in a "special investment opportunity" (as he did with Wilpons).
From Madoff Trustee Sues JPMorgan Chase (primary banker sued for billions; facilitated money-launder) - AT, by Michael Cohn | FR posted by Liz, 2011 February 06 In October 2008, JPMorgan Chase filed a suspicious activity report with British authorities to relay some of its concerns about Madoff, but not the SEC. It said in a filing with the U.K.'s Serious Organized Crime Agency that the claims for Madoff's investments were “too good to be true - which means it probably is.” ..... < snip > In 2007, another JPMorgan Chase said he heard from a co-worker at lunch that “there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a [P]onzi scheme - he said if we google the guy we can see the articles for ourselves - Pls do that and let us know what you find." ..... < snip >
As we know, Madoff's fund activity was run from affiliate office in London (similar to MO of Joseph Cassano's AIG Finanical Products London division which wrote most of the toxic CDSs, and Al Gore's GIM - Generation Investment Management - which is in the business of investing in "sustainable green" fraud) and the SEC, FInRA and NY / US South District Attorneys apparently already have turned the blind eye to investigating Madoff despite much more substantial tips from other sources (Markopolos et al), so going to UK's SOCA made a lot more sense and was a serious step, yet it was still based on nothing "substantial." And this was done in the middle of unfolding possible financial collapse, when something like this was hardly a priority for financial institutions trying to survive or helping others to survive. Apparently SEC staffers were very "inexperienced" (according to the report of SEC IG Katz) or may be too busy "googling" porn, rather than googling or auditing Madoff.
Basically, the Picard's thesis is that the banks and funds should have been not only doing due diligence on Madoff for the purpose of determining if they want to invest with him, but also doing the job of the SEC, FInRA, SAGs/DAGs and the FBI to document and report any possible potential fraud, based on nothing more than something is "too good to be true". How about starting with Social Security, defined benefit pensions and other pay-as-you-go U.S. government schemes... er, "programs"?
From From Prison, Madoff Says Banks ‘Had to Know' of Fraud - CNBC / NYT, by Diana Henriques, 2011 February 15
..... Bernard L. Madoff said he never thought the collapse of his Ponzi scheme would cause the sort of destruction that has befallen his family. .....
Interesting how little he cares about anybody who may have unsuspectingly invested life savings with him or with the funds that invested with him, other than his family or friends.
..... In his first interview for publication since his arrest in December 2008, Mr. Madoff... maintained that family members knew nothing about his crimes. .....
Here's the big one. He claims that his family members, who were sophisticated elite members of NASD, worked at his firm, were at his side almost every day, knew nothing about the scheme, yet the bank that held his account for more than 20 years was supposed to know he ran a Ponzi scheme and report on him to the authorities who would actually then stop him, so there would not be so much destruction to his family? Nice try, Bernie.
..... But during a private two-hour interview in a visitor room here on Tuesday, and in earlier e-mail exchanges, he asserted that unidentified banks and hedge funds were somehow “complicit” in his elaborate fraud, an about-face from earlier claims that he was the only person involved.
Well, before Picard and his "deep pockets" lawsuits Madoff couldn't have come up with this, he meant alone as in "my friends and family didn't know"... now, that the "deep pockets" might pay off his victims - hey, that can change the entire game. Irving Picard, you found some great scapegoats that anyone can hate - sounds good, NYTimes and I will play along.
..... “They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you're doing something wrong, we don't want to know.' ” While he acknowledged his guilt in the interview and said nothing could excuse his crimes, he focused his comments laserlike on the big investors and giant institutions he dealt with, not on the financial pain he caused thousands of his more modest investors. .....
The banks and investors "had to know" (apparently they just could Google it) but the people closest to him, working with him, living with him, scheming with him - "didn't know." Yep, the game is afoot...
..... Mr. Madoff said he was startled to learn about some of the e-mails and messages raising doubts about his results - now emerging in lawsuits - that bankers were passing around before his scheme collapsed. “I'm reading more now about how suspicious they were than I ever realized at the time,” ..... He did not assert that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth. Rather, he cited a failure to conduct normal scrutiny. .....
So at the same time he says the banks and the funds "had to know" about his Ponzi scheme, he is surprised that they even suspected that anything was wrong or "too good to be true"... "It's all their fault... They didn't stop me from defrauding and now look at my poor family." The game goes on...
Madoff met several times (at least twice) with Picard and his legal team, and gave them information he thought would be "instrumental" in helping to recover assets from people who were "complicit" in his scheme. I'll bet they are not FOBs / "Friends of Bernie". Yet he had not shared any of this information with federal prosecutors who worked on criminal cases because he only wanted to help recover assets, not criminal evidence. Having it both ways, again...
Fred Wilpon and Saul Katz? Why, "they knew nothing. They knew nothing."
Entire article is trying to build support for Picard's lawsuits, but Madoff contradicts himself at every step. His goal is still to do everything that he can to protect his family and friends, and Picard is complicit with that, as long as he can keep the game going for a while and grab as much money from the legal abuse of the expensive and time-consuming "deep pockets" and "class action" type lawsuits.
Here is pièce de résistance that gives away their "deep pockets" game:
Mr. Madoff argued in several e-mails that Mr. Picard's responsibility was to return only the $20 billion in out-of-pocket cash that investors lost in his scheme. Given that Mr. Picard has already recovered roughly $10 billion, Mr. Madoff calculated that the lawsuits against major banks and hedge funds would produce more than enough to cover the rest of the cash losses without Mr. Picard having to pursue “clawback” litigation against some longtime investors who withdrew more from their accounts than they put. .....
Quintessiential Madoff's scheme - protecting his friends and family from criminal and financial consequences by pointing fingers at others who could be made "accountable" for his schemes... even from behind the country-club prison walls.
But can Picard explain why he gave pass to Bernie's "surrogate father," Norman F. Levy, who, according to SIPC, transferred more than $83 billion in and out of his account just between 1998 and 2001? BTW, Levy died in 2005, and it's possible that estate withdrew money from Madoff upon his death, thus resulting in or contributing to Madoff's acute "liquidity problem" (see above) in that year.
Madoff ‘Surrogate Father' Moved Billions in Account - BL, by Bob Van Voris, 2011 February 11
Or why Picard quietly settled with some other "net winners" FOBs for less than he could have if he used legal "strong-arm tactics" he is using in his "deep pockets" lawsuits?
Madoff Trustee May Do What Bernie Didn't: Give Victims Profit - BL, by Bob Van Voris, 2011 February 11
On the ironic side, Madoff pal sued by kin - NYP, by Bob Fredericks, 2011 February 10
"It's ironic," said Jersey lawyer Todd Conn, who represents Karen L. Cohn ..... < snip > Maurice Cohn, who ran Cohmad Securities, a Bernie Madoff-linked investment firm, has been sued by his daughter for allegedly duping her into signing over her house to a trust he controlled, The Post has learned.
Cohmad was named as a combination of Cohn and Madoff.
Thanks for the info, CP!