Posted by Rob Eshman
The New York Times reports today that prosecutors say they are close to a guilty plea agreement with Bernard Madoff. See story below:
March 7, 2009
Agreement Sets Stage for Madoff Plea
By DIANA B. HENRIQUES
Taking one step closer to his day in court, the money manager Bernard L. Madoff has agreed to waive his right to a formal grand jury review of accusations that he conducted a worldwide Ponzi scheme, according to a new filing Friday in a federal court in Manhattan.
The agreement sets the stage for a plea bargain between Mr. Madoff and federal prosecutors, who have been negotiating with his lawyers since his arrest on Dec. 11. Criminal charges filed against him at that time and subsequent court filings indicated that he confessed to his crime both to his family members and to the F.B.I agent who arrested him at his apartment.
Further, Mr. Madoff agreed last month to a partial settlement of regulatory charges filed against him by the Securities and Exchange Commission. In that settlement, he essentially agreed that he would not contest the accusations the agency made against him — a step that would have greatly complicated any effort by his lawyers to assert his innocence at a trial.
Still pending on the court calendar, however, is a hearing to review potential conflicts of interest by Mr. Madoff’s lead lawyer, Ira Lee Sorkin, whose parents had maintained investments with Mr. Madoff before their death several years ago. That hearing, originally scheduled for Wednesday, was adjourned to next week. It is not clear whether the federal courts will allow Mr. Madoff to plead guilty to the charges he faces until that issue has been resolved.
Mr. Sorkin could not be reached immediately for comment, but his colleague Daniel Horwitz, said: “The filing speaks for itself. He has waived his right to an indictment.”
Yusill Scribner, a spokeswoman for the United States attorney’s office in Manhattan, had no comment.
As the case plays out, the number of claims from Madoff clients has nearly doubled in the last two weeks.
The court-appointed trustee, Irving Picard of Baker & Hostetler, who has been working to identify and sell assets of the estate, has received 4,300 claims as of Wednesday, according to a spokesman, Kevin McCue.
At a hearing on Feb. 20, Mr. Picard said he had received about 2,350 claims, mostly from smaller investors, totaling $1 billion. Mr. McCue would not comment on the dollar value of the number of claims. The Securities Investor Protection Corporation has mailed more than 14,000 claim forms to Madoff clients since the beginning of January.
William K. Rashbaum and Zachery Kouwe contributed reporting.
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March 5, 2009 | 7:06 pm
Posted by Adam Wills
Sherman Oaks-based mortgage banker Bruce Friedman, whose Friedman Charitable Foundation committed $10 million to the Children’s Museum of Los Angeles and $1 million to Brandon’s Village, a special-needs park in Calabasas, was indicted on securities fraud charges today by the Securities and Exchange Commission.
The SEC alleges Freidman, along with his two companies—Diversified Lending Group (DLG) and Applied Equities, Inc. (AEI)—perpetrated a $216 million real estate investment fraud, raising money from hundreds of investors nationwide, many of whom are seniors, promising guaranteed high returns via real estate investments.
The complaint alleges that Friedman diverted substantial investor money to ventures unrelated to real estate, and misappropriated at least $17 million to support his lavish lifestyle, including purchases of a luxury home, cars, vacations, jewelry, and designer clothing for himself and an alleged girlfriend.
The SEC has frozen DLG’s, AEI’s and Friedman’s assets.
March 4, 2009 | 6:49 pm
Posted by Rob Eshman
“Why is he not in prison?”
“How can he be allowed to sit on his couch in his penthouse while the rest of us are scrambling?”
Vanity Fair unleashed on Bernie Madoff this month, with a chilling look at how he betrayed his closest friends, and, online, a video documentary that looks at the stories of several of his victims.
The anger, loss, shame and despondency are apparent in their testimonies. Last week, when Madoff victim Elie Wiesel said the only fitting punishment for the man would be to sit in a jail cell the rest of his life watching video-taped testimony of the people whose lives he devastated, must have had something like this in mind.
In the introduction Rabbi Marc Gellman reflects that perhaps what the Madoff crime all came down to was the desire on the part of Madoff and his victims to be part of the in group. This may be rabbinic reductionism—when he says it it sounds much more profound—but his last line is particularly resonant:
“The only valid way of understanding who is in and who is out is this: Who is kind and who is not?”
March 4, 2009 | 6:28 pm
Posted by Rob Eshman
Love this moving op-ed piece by Melvyn Bloom, executive vice president of the American Technion Society, which supports Israel’s Technion Institute:
Community can reshape future marred by Madoff
By Melvyn H. Bloom
NEW YORK (JTA)—Bernard Madoff almost stole the future.
He stole the financial future of many decent, philanthropic individuals. He stole the future of some organizations that have been forced to shut their doors. He stole the future of bright, eager students dependent on financial aid from universities whose financial future Madoff also stole. (All this is in addition to the serious damage he inflicted upon the Jewish community.)
When Madoff stole millions from my organization, the American Technion Society, he lifted some of the glow off the future of science, technology and medicine. It’s as if he had blundered on to the Technion campus and proceeded to wreck the laboratories where the future was being forged. And moved destructively into classrooms, scattering the students and professors. And stomped through the campus, where he laid waste to the library and synagogue, the student dormitories and theater, the fitness center and cafeteria, damaging the people and facilities that are at the center of Israel’s future.
How, I continue to wonder, is it possible for a single individual to perpetrate so much evil, to destroy so much? Could we have done anything to stop him, to curtail the damage?
By now I have given up on finding rational answers. While there is always some element of trust and human judgment involved in retaining financial managers, and while processes can be tightened, nothing can guarantee safety from a massive, well-planned fraud like this one.
Now it is time for the Jewish community to move past these unanswerable questions. Despite the considerable damage he inflicted, Madoff failed to steal our future. He left it damaged surely, but our strong foundation is still standing, certainly more than enough to serve as the basis for a swift and sure comeback. And we are in a place to reshape the future.
Jewish parents used to encourage their children’s learning by repeating the age-old truism that no one can ever take away your education. Now I say that no one, not even a hundred Bernard Madoffs, can steal the Jewish community’s future because no one can injure the confidence in our ability to shape and reshape that future.
I am greatly encouraged by early proof of this thinking. Already a number of our supporters have—on their own—called to make large, unscheduled gifts. This is likely the case in other organizations and institutions. When I ask what prompted their unsolicited decision, their words echo my thoughts: We must move beyond this and forward; we must take back the future; we must ensure that Israel has what it needs to not only survive but thrive.
These conversations leave me wondering: If one awful individual can wreak such havoc, how much power does one committed, brilliant, energetic individual have to undo the damage? Or a dozen? Or hundreds of thousands? In fact, we could do so much more; we could change the world!
We have, in fact, already done so. Jewish history, our mere presence in the world today, is itself a miracle, not only of survival but of astounding achievements against what surely must have looked like insurmountable odds. This latest affair, by comparison, is merely a blip, well below those many defining moments in our history. Bernard Madoff almost stole the future. Now it is up to all of us to restore it.
In May, a hundred or more of us will be on the Technion campus for our annual mission. During those days we will be rushed and sometimes tired. But we know from past missions that we won’t mind and no one will complain because we’ll be busy dedicating new buildings, expanded dormitories, impressive laboratories. We’ll be listening to professors and students explain the research and the studies they conduct with our support. We’ll visit them in their homes and dorms, and share their meals and not care when we get to sleep.
We’ll be seeing the future unfold before our eyes, and we’ll know that it’s theirs, ours and the world’s, too.
(Melvyn H. Bloom is the executive vice president of the American Technion Society.)
February 27, 2009 | 4:53 pm
Posted by Rob Eshman
Bernie Madoff should spend the rest of his life in a prison cell watching video screen testimonies of the people he has defrauded, bankrupted, ruined.
So says one of his mosty famous victims, Elie Wiesel. The Holocaust survivor, Nobel Laureate and moral conscience of Western civilization was mugged by Madoff both personally—he and his wife lost their life savings—and also professionally—his Wiesel Foundation lost its entire endowment.
At a panel discussion in New York City this week, Wiesel spoke about his losses, and his preferred punishment for Madoff:
Asked what punishment he would like to see for Mr. Madoff, Mr. Wiesel said: “I would like him to be in a solitary cell with only a screen, and on that screen for at least five years of his life, every day and every night, there should be pictures of his victims, one after the other after the other, all the time a voice saying, ‘Look what you have done to this old lady, look what you have done to that child, look what you have done,’ nothing else.
Our thoughts: Wiesel is letting the bum off the hook too easily. Is it too late for President Obama to change his mind about torture?
Read the whole article here.
Even better, the brilliant Mark Pearlman at jinsider.com posted the whole transcript here.
February 19, 2009 | 5:22 pm
Posted by Brad A. Greenberg
I guess litigation was going to be more expensive for Banco Santander than settling with 70 percent of it’s clients:
“About 70 percent have already executed exchange agreements,” a lawyer, Sam Danon, told Judge Paul Huck of Federal District Court. “I believe somewhere in the area of 7 or 9 percent have rejected it. There’s a percentage that are still considering the agreement.”
The two sides in the Miami lawsuit also told the court that they had agreed to send a notice to Santander clients that outlines details of the pending Miami class action.
The final version of the notice, which explains that the lawsuit demands clients be made whole for their losses and that the compensation agreement releases all parties from further liability, should be ready in a week, lawyers said.
The notice will go to the about 30 percent of clients who have not yet settled, the lawyers said.
Santander offered to compensate all individual clients through the issuance of 1.38 billion euros ($1.75 billion) in preferential shares with an annual coupon of 2 percent.
The offer would cost Santander, the euro zone’s biggest bank, less than the 2.33 billion euros ($2.96 billion) it has acknowledged its clients may have lost to Mr. Madoff, lawyers for the plaintiffs have argued.
The lawsuit asked the court to halt the compensation plan, saying the settlement was “coercive” and fell far short of the compensation sought by the class-action suit.
February 17, 2009 | 2:12 pm
Posted by Adam Wills
Got a spare $100 that wasn’t lost in the Ponzi scheme?
Consider Smash-Me Bernie, a devilish Bernard Madoff mini-me doll sporting a red suit, tail and pitchfork that comes with its own golden hammer, which you can use to smash the thing to pieces, The New York Daily News reports.
The maker hopes its “Smash-Me Bernie” doll—available online at minimemodelworks.com—could become a “Tickle Me Elmo” for grownups.
“A lot of people have been asking about it,” Graeme Warring of ModelWorks said Sunday at the Jacob Javits Convention Center.
February 16, 2009 | 3:03 pm
Posted by Adam Wills
More interactive fun from the 13,000+ Madoff client list to indulge your schadenfreude. MapLarge.com has launched the Madoff Victim Map, an interactive heat map that shows the locations and density of Madoff clients.
Client locations are mapped with an icon showing the density of nearby Madoff clients (within 10 miles). The density of the clients is reflected in colors that range from from green (less density) to red (intense density). A look at the overall map of the United States shows the greatest density of Madoff clients is in Florida, New York and California (Los Angeles and the Bay Area).
The L.A. map, as would be expected, finds a heavy orange concentration in the affluent but geographically dense areas of Beverly Hills and Brentwood/Santa Monica. An orange cluster worth noting is the one rooted in the Encino and Sherman Oaks hills of the San Fernando Valley.
The map is also searchable by client name. You can enter keywords like “Jewish,” “Israel” and “trust,” which will give you a list of clients that meet your search request.