Normal tech support phone call: "Press 1 for help with e-mail. Press 2 to have your password reset."
Madoff tech support phone call: "Hello, how can I help you dummy up some trading records today?"
The investigation of Bernie Madoff's fraudulent financial empire is leading to more arrests. Jerome O'Hara and George Perez, both computer programmers employed by the Ponzi schemer, were arrested by the FBI on Friday morning. The charges include conspiracy for falsifying books and records. They are accused of doing the deed for the boss and accepting hush money -- in the form of 25% raises and net bonuses of $60,000 -- to keep the scam afloat.
What do you get for the person who has everything? Well, maybe you buy him a piece of history. The U.S. Marshals Service has done all the hard work, and now you can take advantage of it... maybe even at discount prices! Possessions seized from Ponzi schemer Bernie Madoff are set to go under the gavel in New York City on Saturday, so bring your checkbook and your appetite for luxury. The money will be used to compensate the victims of Madoff's crimes.
Another player in the Bernie Madoff saga has fallen. His longtime auditor, David Friehling, pleaded guilty in federal court on Tuesday to charges of securities fraud, investment adviser fraud, making false filings with the SEC, and obstructing or impeding the administration of the Internal Revenue laws (among others).
Two New York investors have filed a lawsuit against the Securities & Exchange Commission, accusing the SEC of a "pattern of incompetence" in failing to detect and put a stop to Bernie Madoff's Ponzi Scheme.
"Had the SEC carried out its functions with even a minimum of reasonable due care, many, if not most, of Madoff's victims would have been spared the financial ruin they face today," the complaint said.
The engineer of the largest (known) Ponzi scheme in history apparently got into an argument with another geriatric inmate at the Butner, North Carolina federal prison. Of course, it was over the stock market. Does it really make sense to outmaneuver a guy who never needed to know what the market was doing to deliver double-digit returns?
Well, push came to shove, as they say, with the "attacker" stumbling and looking up at a mean, mean Madoff. He got up and ran off.
Even with the ringleader in jail, the pursuit of Bernie Madoff doesn't seem to be finished. Sunday night, the trustee who's winding down the Madoff company said on 60 Minutes that Madoff's two sons (Mark and Andrew), brother (Peter) and niece (Shana) will be slapped with a $198 million suit. They are alleged to have known about the Ponzi scheme, according to the trustee, Irving Picard and his chief counsel, David Sheehan.
Sheehan and Picard are also working under the assumption that there is still some money hidden, quite a lot of it, in fact. Picard told the show, "We'd assume it's millions and millions of dollars." Yet, this probably wouldn't help with the task in front of them.
Disgraced Ponzi schemer Bernie Madoff's (former) Montauk, Long Island home is no longer on the market. A buyer willing to pay more than the $8.75 million asking price has picked up the property, only two weeks after the U.S. Marshals Service listed it for sale.
Anne Lacombe, spokeswoman for the Corcoran Group, a real estate broker involved in the transaction, said the home was under contract for more than asking but did not have information on the exact amount, buyer or closing date, according to the Associated Press.
Looking for a 4,000-square-foot duplex with four fireplaces and a doorman on the Upper East Side of New York? You are in luck, because the U.S. Marshals will put Bernie Madoff's "luxury penthouse" on the market. The apartment is believed to be worth $7 million, so if you have some extra cash laying around, you could find yourself movin' on up to the Upper East Side. A list of the amenities includes ornate cabinets, stainless steel countertops, Baccarat crystal glasses, a winding staircase to the bedroom, an atrium breakfast nook, and a flat-screen TV in one of the bathrooms.
Instead, he's sending out notices to find all the investors who lost money with Fairfield as a result of its investments in Bernie Madoff's Ponzi scheme. The state does not intend to settle, though negotiations between the state and Fairfield are ongoing.
Each of the charges carries a term of five to 20 years in prison, not to mention fines of up to $5 million. But his cooperation is expected to lessen the blow a bit, though we'll have to wait until at least May 2010 to find out what the outcome will be. We don't even know if DiPascali will be able to wait for sentencing from his own home -- nothing on bail has been determined. The prosecution has asked for a $2.5 million bond, secured by equity in DiPascali's sister's home and co-signed by "three financially responsible individuals," according to a Reuters report.
The May sentencing date suggests that prosecutors will be willing to deal, based on the information DiPascali provides in the interim. District Judge Richard Sullivan, as well, hopes that information will be forthcoming, which he expressed to one of the victims who spoke at the hearing.
Bernie Madoff's long-time go-to guy, Frank DiPascali, isn't trying to beat the system any more. He has decided to plead guilty to criminal charges spanning more than two decades.
DiPascali is the first of Madoff's employees to be charged. Aside from Madoff, the only other person greeted by the criminal justice system has been outside auditor David Friehling, who isn't going as easily as DiPascali (he's pled not guilty).
If all goes as planned, DiPascali will plead guilty in U.S. District Court on Monday at 3 PM. For now, everyone's remaining tight-lipped, and the terms have not yet been revealed.
So, here's one for you -- according to Joseph Cotchett (a lawyer for some of Bernie Madoff's victims), Bernie Madoff is surprised that his Ponzi scheme lasted as long as it did. The revelation came during a 4.5 hour interview, wherein Madoff revealed how the scheme worked and how securities regulators didn't catch him. Madoff did apologize, repeatedly, for the harm he caused victims.
The most interesting part of the interview is when Madoff described meetings with the Securities and Exchange Commission (SEC) while he was committing the fraud and how the SEC was unable to catch him, which didn't surprise him. These comments lead Cotchett to theorize that "many people" were negligent, including the government watchdog agencies. Let's not forget that the SEC has seen no evidence of wrongdoing by its staff as far as the Madoff situation is concerned. Nevertheless, the SEC has undergone many changes in order to continue to protect investors and the market.
David Friehling is only the second person to face criminal charges in the Bernard Madoff debacle. He served as Madoff's auditor from 1991 to 2008, though it's hard to say if they'll resume their relationship as cellies. For now, Friehling has only been charged (innocent until proven guilty, and such) with securities fraud, abetting investment adviser fraud and filing false reports with the SEC. On five of the six charges filed, he faces a 20-year maximum.
It's alleged that Friehling didn't conduct "meaningful" audits while in Madoff's employ, despite issuing reports saying that he'd done his job -- which paid close to $15,000 a month (no work for big pay . . . where do I sign up?). In particular, he's said to have not bothered to verify Madoff's business assets, revenue sources or bank accounts. This is no-brainer stuff for an auditor.
To help Americans understand what prison life will be like for Bernie Madoff, a number of news outlets have enlisted the help of ex-con turned jail expert Larry Levine. After serving a lengthy prison term for narcotics, securities fraud, and weapons charges, Mr. Levine is now operating Wall Street Prison Consultants, a firm that provides advice and training on adjusting to prison life.
To learn a little about what Madoff has to look forward to, watch the video below -- and pay special attention to the last 30 seconds where things go a little, well, off-kilter.