Ruth Madoff can breathe a little bit easier today. According to the Post, Bernie Madoff's wife will not be prosecuted for having any role in her husband's Ponzi scheme, since federal prosecutors "lack evidence that she was either aware of or involved in Bernard Madoff's scam." And here we were thinking that the $15.5 million she withdrew from her brokerage accounts in the weeks before Madoff's arrest was a little bit suspicious!
A "person familiar with the investigation" into Bernie Madoff has tells the AP that the government is pursuing charges against 10 more people who allegedly played a role in carrying out the biggest Ponzi scheme ever. Who are they? No names were mentioned, unfortunately. But if one of the people on the list is hedge fund manager Ezra Merkin, that won't be the only piece of bad news he receives this week. Attorney General Andrew Cuomo unveiled a deal this morning to sell off a collection of Merkin's Rothko paintings and Giacometti sculptures, items that will go to repay people who lost money as part of the scheme. An anonymous buyer has already stepped up and agreed to pay $310 million for the works, and when various liens, commissions and legal fees are subtracted, an estimated $191 million will eventually be left over for Madoff's victims. What will Merkin do with the bare walls of his mammoth apartment at 740 Park? Well, this painting is still for sale, as far as we know, and would be rather fitting, wouldn't it? [AP, WSJ]
The deal that Ruth Madoff signed with prosecutors last week will force her to give up her penthouse apartment on East 64th Street (as well as her other homes in Palm Beach and Montauk). So where will she move next? Finding a building willing to rent an apartment to her is proving challenging, according to the Post, since accepting Ruthie means also accepting the fact that photographers may be camped outside the building and Madoff victims may occasionally hurl rocks from across the street. What to do? Well, she hasn't moved out of the place yet, so if you have some brilliant ideas for her, you could always update the text on this card and send her your suggestions. Maybe you have a spare bedroom and you're desperate for some attention? Do reach out if you can help. [NYP, Curbed]
For the first time since her husband was arrested in December, Ruth Madoff is speaking out. (Bernie, as you've undoubtedly heard, was sentenced to 150 years in prison earlier today; Ruth, for her part, entered into an agreement with the U.S. attorney's office on Friday evening that forces her to give up claim to $80 million in assets, but will allow her to keep $2.5 million in cash.) Naturally, Ruth portrays herself as just another victim of Bernie in today's prepared statement and says there were two Bernies: the one she was married to and the other Bernie who responsible for "this horrible fraud." Does her line about life with Bernie being "over" indicate that she now plans to divorce him and/or not bring him care packages in prison? Hard to say, but you can read her full remarks below.
Bernie Madoff appeared in a federal courtroom this morning to find out his fate for carrying out the biggest fraud in financial history. Judge Denny Chin sentenced Madoff to the maximum—150 years behind bars—telling the courtroom that he didn't believe Madoff's claim that he had cooperated with prosecutors, or that he had divulged all he knew about the scheme. Madoff's victims erupted in cheers after the sentence was handed down, Bernie barely reacted to the news, and now Madoff is off to change out of the "immaculate" suit he wore to court today and put on the prison jumpsuit he'll be wearing for the rest of his life. [CNN]
Bernie Madoff will be sentenced for his crimes on Monday and he faces a maximum of 150 years in prison. (His lawyer's request of 12 years? Highly unlikely.) What will Bernie need to know when he gets sent off to a federal correctional facility, especially since other inmates may blame him for the economic meltdown as a whole? He'll need to "maintain high visibility," says Larry Levine, an ex-con and consultant to white-collar criminals, who recommends Madoff stay in areas where lots of other people gather. "Do not become confrontational with anybody. Respect people; be polite. Don't borrow anything from anyone. Don't become beholden to anyone," he adds. We'll add one more tip: Buy tons of stuff from the commissary and hand it out to your new friends. It's a proven strategy. That's what Jeffrey Epstein did and he got through his bit just fine. [CNNMoney]
Fairfield Greenwich, the hedge fund that directed billions to Bernie Madoff, was handed over to another fund last month called Sciens Capital. Sciens didn't pay anything for it (not that anyone would pay anything for Walter Noel's heaping pile of crap). And now it seems the change in ownership is ensuring that some of Noel's cronies continue to receive paychecks. A tipster with a copy of a Sciens Powerpoint presentation tells Dealbreaker that the fund "seems to be basically a bunch of FGG guys," the transfer was a "smoke and mirrors show for the investors, and "nothing has changed." In that case, champagne by the pool in Mustique in 15 minutes! Be there! [Dealbreaker]
Back before Bernie Madoff came along and hogged the spotlight, there was Samuel Israel, the hedge fund founder who ripped off investors to the tune of $450 million, got caught, tried to fake his own death, failed, turned himself in, and was ultimately sentenced to 20 years in prison for his crimes. His legal ordeal isn't over yet. Last Friday, the Second Circuit Court of Appeals ruled against him after he asked the court to reduce his sentence. Next month, additional time will be added to his sentence for that bail-jumping stunt that had him on the lam for three weeks last year. But Israel's tendency to vanish into thin air may be alive and well.
Ira Sorkin, Bernie Madoff's lawyer, has asked a federal judge to sentence the admitted fraudster to as little as 12 years in prison and no more than 20: "Sorkin said that a 12-year sentence would be appropriate because Madoff's life expectancy is now 13 years. As an alternative, he said that a 15-to-20 year term would 'effectively achieve' the goals of sentencing 'without disproportionately punishing Mr. Madoff.'" And we wouldn't want to do that, clearly. [Bloomberg]
A couple of weeks ago, we pointed out that Robert Jaffe, the car-collecting clotheshorse who raised hundreds of millions for Bernie Madoff, had returned to a life of leisure and was back hitting balls at the Palm Beach Country Club. He probably isn't golfing this afternoon—and that's not because there are reports of scattered thunderstorms in Palm Beach today. The SEC just filed civil fraud charges against Jaffe and two other executives affiliated with Cohmad Securities for marketing Madoff investments while "knowingly or recklessly disregarding facts indicating that Madoff was operating a fraud." The SEC also filed charges against Stanley Chais, who helped raise as much as $1 billion for Madoff from the Hollywood crowd, but has since left LA to move to NYC. [NYT/Dealbook, WSJ]
Bernie Madoff has been sued by a long list of former investors. Now his sons will get to share in the excitement. Two former employees of Bernard L. Madoff Securities have filed suit against Andy and Mark Madoff and claim the two brothers were well aware of the $65 billion Ponzi scheme and made efforts to "cloak the massive fraud of the Madoff investment advisory business." Richard Stahl and Reed Abend are now demanding $2 million in deferred compensation from the Madoff boys. And while it's unlikely the sons could come up with that kind of cash even if they wanted to, Abend, at least, could always resort to extra-legal justice if he's forced to. He's the same ex-employee who allegedly shoved and punched Andy Madoff when he ran into him on the street back in May. [NYDN]
Ruth Madoff is the "most vilified spouse of a financial rogue in history," have you heard? The Times checked in on the "loneliest woman in New York" over the weekend and it seems little has changed for the wife of fraudster Bernie Madoff. She spends most of her time "confined" to her East 64th Street apartment, she no longer works out at the nearby Equinox, and she generally only steps foot outside to buy food or pay a visit her lawyer. And while several nearby businesses have instituted Madoff bans over the past few months—such as the Pierre Michel salon on East 57th Street where Ruth turned up faithfully every six weeks for "Soft Baby Blonde" highlights—at least one says it would be willing to allow her back inside: The general manager of the restaurant Sette Mezzo says he'd welcome her back if she comes up with the $160 she and her husband owe for a meal back in December. So that's good news, isn't it? [NYT]
Remember "Clark Rockefeller," the con man who bounced around social circles in New York and Boston posing as a physicist, financier, art collector, cardiovascular surgeon, government official, and sea captain, among other things? Rockefeller—real name Christian Karl Gerhartsreiter—was convicted today of kidnapping his 7-year-old daughter during a custody dispute with his ex-wife, and he now faces more than a decade in prison. Unfortunately, the trial did not fully account for how he managed to convince people he was all those things when, to most normal people, he bears a striking resemblance to a serial killer from a made-for-TV movie on Lifetime. But at least he'll have a non-fake job—license plate maker, perhaps?— to add to his resume in the near future! [AP]
Credit where credit is due: Tracy Anderson, exercise guru and personal trainer to Gwyneth and Madonna, knows how to fake it till you make it. Indianapolis Monthly has a very detailed story about Anderson's rather sketchy habit of failing to pay her rent, business partners and sewage bills, even while she, herself, was staying at $1,500-a-night hotels. Long before she was famous or successful, Anderson misrepresented herself as a former Pink Power Ranger (really) and "hired a celebrity photographer for promotional photos, drove a luxury SUV through a neighborhood where her husband was thousands of dollars behind on homeowners-association dues, signed leases for businesses but didn't pay the rent, and lived in a meticulously maintained Noblesville subdivision but didn't pay the sewer bill."
Robert Jaffe was one of Bernie Madoff's most prominent fundraisers. Shuttling between Boston and Palm Beach, the well-coiffed, car-collecting financier with a weakness for $5,000 suits was responsible for raising countless millions over the years, funds he funneled into Madoff's $65 billion scheme. Jaffe is currently facing multiple lawsuits, and investigations by multiple state and federal agencies are still pending. He's also been almost entirely rejected by the people he once called his friends and clients: Back in December, for example, he nearly took a beating when he turned up at a party and came face to face with Nine West founder Jerome Fisher, who lost $150 million to Madoff's scheme. But while Jaffe faded from sight soon after and retreated to his $17 million mansion—and even had to sacrifice his weekly manicures because he was reportedly "too embarrassed to show his face"—he's back!
Marc Dreier didn't contest the charges against him: Last month, the disgraced lawyer pleaded guilty to swindling hundreds of millions from investors and he'll be sentenced for his crimes on July 13. His son, however, appears to be keeping up the fight. Spencer Dreier filed suit against his former Union College roommate last week. The reason? Spencer claims that his former pal, Ben Clorite (right), defamed him by posting negative comments about his dad on the Wall Street Journal's Law Blog and also assaulted him.
Can we interest you in one of Mark Madoff's business cards? Just $4.99 plus $1 for shipping, according to this listing on EBay! We have no idea what you'd do with the business card belonging to the disgraced son of admitted fraudster Bernie Madoff, but if you already have cards from Dennis Kozlowski at Tyco and Ken Lay at Enron, you might as well add it to the collection, no? Oh, and in case you're wondering, if you call the number printed on Mark's card, you'll get an automated message that suggests "trying again later." How optimistic! You may have better luck emailing him. We didn't get a reply when we sent over a little note this morning, but it didn't bounce either, so it's possible that Mark is still online. Developing! [EBay]
Ezra Merkin, the money manager who invested more than $2.4 billion in Bernie Madoff's Ponzi scheme and has since been sued by both Andrew Cuomo and his disgruntled investors, is not having a good week. His hedge fund was turned over to liquidators the other day. Now he's caved to pressure and stepped aside as president of the Fifth Avenue Synagogue. What could be next? If you hear about an emergency co-op board meeting at 740 Park, you may have your answer. [NYT]
Lawyer Marc Dreier pleaded guilty to charges he bilked investors out of hundreds of millions of dollars a couple of weeks ago, and he remains under house arrest until his sentencing next month. (He may end up with a life sentence if prosecutors get their way.) He's been having trouble paying his bills since he was first indicted several months ago. According to his lawyer, Dreier even had to dip into his son's bar mitzvah fund recently to cover his living expenses. Perhaps that's why his yacht, which is one of a bunch of Dreier's assets now up for sale, was just discounted? Dreier's "Escape" (or "Seascape"), which was originally listed at $13.5 million, was just reduced to $12.5 million. After the jump, a few photos of the boat where Dreier probably spent many hours plotting and scheming.
