Judge Orders Freeze Of Madoff’s Assets; Investigators Will Try To Determine If Funds Were Co-Mingled In Ponzi Scheme
UPDATE DEC. 14, 7:51 A.M. EST (U.S.A.): Forbes.com is quoting a lawyer from Akerman Senterfitt on the Bernard Madoff case. Akerman Senterfitt is representing Andy Bowdoin in the Ad Surf Daily Ponzi scheme case. The attorney quoted at Forbes.com is being quoted in a general sense as an expert in unraveling Ponzi schemes.
We reported yesterday that some of the world’s great publications and journalists are reporting on the Bernard Madoff case. We’ve included a few links at the bottom of this post. Though Madoff’s alleged fraud is much more involved than the allegations against AdSurfDaily, the issues in the cases are strikingly similar. If you’ve been following the ASD case, you’ll learn a lot by following the Madoff case.
Here, below, our earlier post . . .
It hasn’t taken long for the probe into Bernard Madoff’s failed securities business to kick into high gear. A receiver appointed by a federal judge already has seized Madoff’s website. Meanwhile, the judge already has issued an order that empowers the SEC to go over Madoff’s financial statements and bank accounts with a fine-tooth comb. Included in the order are business and personal accounts.
Elsewhere, clients and companies that have billions of dollars invested with Madoff already have started their own probes. One of them, Fairfield Greenwich Group, has acknowledged it had $7.5 billion — more than half of its $14.1 billion portfolio — “invested in vehicles connected to Bernard L. Madoff Investment Securities.”
“We are shocked and appalled by this news,” said Jeffrey Tucker, founding partner of
Fairfield Greenwich Group. “We have worked with Madoff for nearly 20 years, investing
alongside our clients. We had no indication that we and many other firms and private
investors were the victims of such a highly sophisticated, massive fraudulent scheme.”
Federal prosecutors said last week that Madoff had been running a giant Ponzi scheme that had gone undetected for years. Preliminary losses were pegged at $50 billion. The alleged scheme reportedly unraveled when customers sought $7 billion due them and Madoff had no more shells to move.
Madoff, the former chairman of Nasdaq and a Wall Street titan, is 70. If convicted, he faces up to 20 years in prison and a fine of up to $5 million.
One of the things investigators will try to determine is whether Madoff co-mingled funds from business accounts and personal accounts.
Co-mingling is an issue in the AdSurfDaily case. Authorities said ASD President Andy Bowdoin was running a $100 million Ponzi scheme tied to checking and bank-card accounts over which he had sole signatory authority. Investigators said the accounts were used to purchase $51,000 in jewelry on a single day, along with real estate in Florida and South Carolina.
Prosecutors said ASD was insolvent and that Bowdoin was paying older program members with money from new members, the classic Ponzi set-up. The U.S. Secret Service seized ASD’s assets.
Insolvency also is an issue in the Madoff case. Madoff acknowledged the firm was insolvent and had been running a giant Ponzi scheme for years, federal officials said. As was the case in the ASD probe, a judge froze Madoff’s assets in a bid to contain the damage — or, as the court documents say — to preserve the “status quo.”