1 Boring Old Man

Nearly $7M found in Madoff’s Bank of New York accounts
BY ANTHONY M. DESTEFANO
Newsday
April 28, 2009

 

Like finding coins under a couch cushion, the special trustee probing Bernard Madoff’s crooked business empire continues to discover more cash held in bank accounts, according to bankruptcy court documents. Nearly $7 million was found in six Madoff accounts at Bank of New York Mellon Corp., which contained amounts as low as $5,372 and as much as $6.5 million, according to records filed by Irving Picard, the lawyer acting as trustee.

Picard is asking that the money be transferred to his control for eventual distribution to Madoff investors who were victimized by the estimated $65-billion Ponzi scheme. The Bank of New York money will be added to a pot of investor funds that now totals $950 million to $1 billion that will go to repay investors.

While the Bank of New York recovery is relatively small, a source familiar with the investigation who didn’t want to be identified said an unspecified number of additional discoveries, each totaling more than $100 million, is expected to be announced soon.

Disclosure of the Bank of New York accounts comes a day after a Boston company agreed to pay $25.5 million in the next four years to buy what remains of Madoff’s legitimate market-making operation. Castor Pollux Securities Llc won an auction that concluded late Monday night to buy the business.

As with money raised from the sale of other assets, like Madoff’s season tickets for the New York Mets, the money paid for the market-making business will be used to repay investors. "The auction yielded a higher and better offer for the market-making business," Picard said in a statement Monday night. "The additional consideration that we will receive as a result of the auction will benefit Madoff victims."

In March, Castor Pollux initially offered to pay as much as $15 million for the Madoff business. Picard also has brought legal actions against offshore investment funds in an effort to pull back as much as $405 million in money withdrawn by various investment funds from Madoff accounts in the weeks before the scandal erupted. The investigative source said more lawsuits are being contemplated against other investment funds and companies, which could push the recoveries up to $2 billion by the end of the year.

Picard also has sent out "clawback" letters to corporations and individual investors asking for the return of more than $735 million in false profits that the trustee said represent stolen property.

It reminds me of the news cycles with [former] New York Governor Elliot Spitzer, or [former] Illinois Governor Rod Blagojavich. It’s a story of the hour that we can’t read enough about; then there’s a humiliating fall; then it’s old news and off the scope – gone from the front page and even the Late Night monologues.

When I mull it over, there’s not much to keep our interest up about Bernie Madoff except some curiosity about how he lived with himself for all those years knowing that he was decimating the savings of every client and every charity that came close to him. Or maybe some curiosity as to how Ruth either did the same thing or remained oblivious about the source of their wealth.

For me, I watched the long version of that roundtable discussion that was everywhere where he waxed eloquent about investing, and felt like I understood how he rationalized the whole thing. He blamed it on the regulators. You just can’t make any money doing trades anymore, you have to invest. And then there was some cryptic line about having to decide where to draw some line. I actually got a laugh as I thought about it. The supposed guru of investing was afraid to make investments. He made no trades at all. I guess he just couldn’t stand the risks involved.