The court-appointed trustee of Bernard Madoff’s defunct firm is going after the millionaire middlemen who acted as witting or unwitting accomplices to Madoff’s $65 billion Ponzi scheme.
In his latest lawsuit, trustee Irving H. Picard filed papers Monday against several funds run by Fairfield Greenwich Group, the single largest feeder to Bernard Madoff Investment Securities which had channeled billions of dollars Madoff’s way.
The civil suit, in federal bankruptcy court in Manhattan, alleges the firm “should have known” Madoff was engaged in fraud, and seeks the return of more than $3 billion withdrawn from its Madoff accounts from 2002 until the scheme collapsed in December, when Madoff confessed to his sons and was arrested.
Picard is trying to recover the maximum amount of money possible to return to defrauded investors.
The complaint does not name Fairfield Greenwich’s partners - Walter M. Noel Jr., Jeffrey H. Tucker and Andres Piedrahita, Noel’s son-in-law.
More than any other feeder fund, Fairfield Greenwich helped Madoff extend his reach around the world, according to the New York Times.
Walter Noel’s agents, led by several prominent sons-in-law, brought in cash from wealthy enclaves in Europe, Latin America and the Persian Gulf. By all accounts, the extended Noel family lived the high life, using the hundreds of millions in fees earned from their investments with Madoff to purchase mansions, boats and planes around the world.
The suit doesn’t provide evidence Fairfield or its agents knew of Madoff’s fraud, but says the firm failed to perform the due diligence it had promised its clients.
According to the suit, the funds received “unrealistically high and consistent annual returns,” of 10 percent to 21 percent from the Madoff investments.
Moreover, the funds’ account records showed prices for 280 stock trades that did not match the actual price range for those stocks when the trades supposedly occurred. Some trades were shown as occurring on days that were actually holidays or weekends, according to the complaint.
“These trades were clearly fictional,” the complaint said.
At the time Madoff was arrested, Fairfield Greenwich clients had accounts valued at $7.3 billion - with about $60 million coming directly from the firm and its partners. Those investments generated more than $500 million in fees since 2003, enriching a handful of its top executives, according to the Times.
A spokesman for Fairfield Greenwich called the allegations specious, and said the firm would fight the suit.
“Fairfield Greenwich funds lost far more from the Madoff fraud than they ever redeemed,” he said. “There is no merit to this lawsuit, and it will be defended vigorously.”
Noel and his partners have also been sued by Massachusetts, the town of Fairfield and two of its retirement funds, as well as individual investors.
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2 Comments
#1. David Raymond Amos 06.07.2009
I tried to post a comment twice but it apears that i am blocked from here as well EH?
#2. David Raymond Amos 06.07.2009
From: David Amos
Date: Tue, 2 Jun 2009 13:48:28 -0300
Subject: RE: USANYS-MADOFF AND IMPORTANT INFORMATION FROM US ATTORNEY’S SDNY
What kind of strange game is the US Justice Dept and the SEC playing
with me now Mr Litt? Rest assured I won’t play it and many people know
that I never would Even though the corporate media won’t talk about my
concerns about your actions, others certainly do.
Here is just one example that still exists on the net. Even though
Danny Boy Fitzgerald hates this mean old Maritimer, at least
understands the meaning of the term Integrity and detests you people
more. I am merely wondering how much longer his blog will exist. You
know why EH T.J. Burke?
http://qslspolitics.blogspot.com/search?q=amos
You dudes know as well as I that my concerns are far greater that mere
matters of money and Bernie Madoff. Perhaps you should talk to your
associates in the RCMP and the INTERPOL ASAP Clearly I am trying hard
to make the whole world know about my concerns about the Feds’ severe
lack of integrity EH H. David Kotz?
Veritas Vincit
David Raymond Amos
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