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The Madoff Family and Friends Chinese Wall Begins to Crumble

By Steve Lombardi

Everyone is wondering how one person can spend $50 billion. We shouldn't have to wonder much longer. The AP reports on the trustees findings of the Madoff family spending and how there were significant credit card charges by several having nothing to do with the business of investing. As can be seen by the law suits the gloves are coming off and investors will be suing investors to get his preferential transfers returned and redistributed. The following statement if true is incredible and tends to show the linkage will go beyond mere family.

'Stanley Chais, an investment manager and prominent Los Angeles philanthropist, was sued Friday by a court-appointed trustee who accused him of getting such outsize returns on his family's accounts with Bernard L. Madoff that he 'knew or should have known' that his family was participating in an illegal Ponzi scheme.

The complaint asserted that Mr. Chais was a primary beneficiary of the Ponzi scheme for at least 30 years, reaping annual returns on his family accounts that averaged 40 percent and were sometimes as high as 300 percent, The New York Times' Diana B. Henriques reports.'

Madoff Family Members Withdrew Heavily In Days Before Collapse

Once you begin to read about the trustee's lawsuits you have to wonder how many years this went on. The man who figured this scheme out ahead of most everyone else is Harry Markopolos. He started sending information to the SEC in May of 2000, then on four additional occasions; all to the shegrin of those entrusted with investigating investment fraud. See his 60 Minutes interview from March 1, 2009.

http://www.youtube.com/watch?v=s68FR1MXT8Q

Today again I came back to Bernard Madoff and listened again to him speak. The things he says at the October 20, 2007 conference and listening to what Madoff had to say when he was questioned by what appear to be potential or client investors is appalling to say the least. Look below at some of what he says to this group.

If anyone else has videotape of Madoff it should be uploaded to YouTube for a collective evaluation of the words he chooses. You never know what admissions could lead to other accomplices in this Ponzi Scheme of $50 billion. Should you not wish to put it on the Internet I'd be happy to review and analyze it privately and for no charge. All I ask is that you allow me to talk about what it shows and quote Mr. Madoff or his assistants.

If law students want to learn how to question a witness and to dissect what and how a deponent testifies, you should evaluate this taped discussion. Law students today have so much more to use to learn. The tools available on the Internet are incredibly useful.

This clip that follows is almost 34 minutes long and certainly too long for most people's attention. If you have an idea of what to listen for and look at it helps with watching and listening to the entire clip. May I suggest you watch Bernie Madoff and listen to the main speaker? Knowing now, that this was all a Ponzi Scheme listen to the explanations and see how he never really answered the question asked about his investment strategy. You can learn a lot from the Madoff case about investment fraud.

Allow the video to fully load so you can pick your start time. Then start at 11:30 P.M. His premise is that you're not really smart enough to understand the strategy so they hired math people from MIT but had to get away from them because 'They spent too much time thinking.' And then continues with, 'I understand that's not something you people want to hear.' I kid you not. Go to 11:30 and listen. At 12 minutes he discussed hiring MBA's then math people.

Bernie Madoff on the modern stock market

http://www.youtube.com/watch?v=auSfaavHDXQ

In the end we all know Madoff investors lost $50 billion in this phony investment strategy. The investors didn't start asking for the proof of the conclusions until it was too late. I equate Madoff investors with honest hard working people who through no fault of their own are injured, suffer severe economic loss and then can't believe they've been taken by tort reform. Tort reform takes away your right to receive compensation irrespective of who you are an how it's affected you and your family. So before you vote for tort reform make sure you can personally accept the consequences of tort reform measures.

Looking back at this video clip I have to wonder: Who is Josh Stampfli? I suspect before this is all over with we will know a lot more about him.

I'll be covering this again as part of a ten-part series about tort reform. That post should post ten days from now.

Originally posted at InjuryBoard by Steve Lombardi

Full post as published by Des Moines Personal Injury Lawyer on May 19, 2009 (boomark / email).