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Wednesday
Jun292011

BUSTED: SEC's Top Lawyer Sued By Madoff Trustee In Clawback Suit For Family's Ill-Gotten Ponzi Gains

There is no mention of impropriety in Picard's suit, but it raises conflict of interest questions related to the SEC's failure to prosecute Madoff, despite dozens of tips over decades and multiple (9) investigations, including Harry Markopolos famous report which spelled out 'ponzi fraud' in giant Technicolor candles on a birthday cake with Madoff's face on it. 

The New York Post has the story.

--

The family of the top lawyer at the Securities and Exchange Commission invested with Bernie Madoff and earned more than $1.5 million in ill-gained profits, according to trustee Irving Picard, who has named the lawyer, David M. Becker, as a defendant in a clawback lawsuit, a Daily News investigation has found.

The apparent conflict of interest raises significant questions about the watchdog commission's failure to stop Madoff and his $65 billion Ponzi scheme, despite repeated red flags and investigations into his operations.

Becker, 63, who is leaving his post as general counsel and senior policy director of the SEC in five days to return to the private sector, has never publicly disclosed his family's ties to Madoff. He and his two brothers, who are also defendants in the suit, were named executors of their mother's estate, which included a Madoff account, after her death in 2004. They liquidated the account in 2005, withdrawing $2,042,845, and are being sued as co-executors of the estate and individually.

"If families of high-ranking SEC officials were heavily invested in Madoff it may help explain why the SEC was less than vigilant in scrutinizing his activities," Simon said. "We know they were asleep at the switch. This may help explain why."

Legal records show that the Becker brothers' mother, Dorothy G. Becker, was a Madoff investor, and that her sons became executors of her estate after her will was admitted to probate on Sept. 22, 2004. A Madoff account (No. 1B0270) was formed in the name of "The Estate of Dorothy G. Becker," according to Picard, whose filings show that the check for $2,042,845 was wired out of the account on Feb. 10, 2005.

Picard's clawback complaint claims that Madoff "made transfers to Defendants totaling at least $1,544,494 in fictitious profits from the Ponzi scheme," and that the funds were "non-existent profits supposedly earned in the Account, but in reality they were other people's money."

At the time of the Becker estate transactions, the SEC had already received multiple warnings about Madoff, and indeed, had conducted one of its nine examinations of Bernard L. Madoff Investment Securities not even a year earlier, according to a report issued by the SEC's Official of the Inspector General.

One of those complaints, an eight-page memorandum by Boston investment professional Harry Markopolos, had come under Becker's watch in 2001.

A lawyer with ties to a number of Madoff victims, speaking on the condition of anonymity, expressed outrage about "the crookedness and incestuousness of this whole affair," in reference to the SEC's failure to investigate Madoff.

"First, in a prison interview, you have Madoff calling Mary Schapiro 'a dear friend,' " the lawyer said. "Now you have the general counsel of the SEC - a lawyer whose job it is to police this world, being named as a defendant because his mother's estate had money with Madoff.

"I don't care how much money David Becker and his brothers made or didn't make. It's wrong. It's just wrong. A lot of lawyers are getting rich and everybody else is getting screwed."

Continue reading at the New York Post...

 

 

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Reader Comments (6)

Dec 05 2010, New York — Relatives of both Bernard Madoff and his wife are among those being targeted in 40 lawsuits announced Friday by the trustee trying to recover money for victims fleeced by the disgraced financier.

Twenty-two of the lawsuits were filed against relatives of Madoff and his wife, trustee Irving Picard said in a news release. Eighteen lawsuits were filed against former employees of Bernard L. Madoff Investment Securities LLC, he said.

http://articles.nydailynews.com/2010-11-27/news/27082537_1_ponzi-scheme-ruth-madoff-irving-picard
Feb 23, 2011 at 2:03 PM | Registered CommenterDailyBail
Wilpons, trustee for Bernie Madoff Ponzi victims both urge judge to unseal lawsuit against Mets

http://articles.nydailynews.com/2011-02-03/sports/28534576_1_irving-picard-saul-katz-mets-owners
Feb 23, 2011 at 2:04 PM | Registered CommenterDailyBail
Trustee representing Madoff's victims seeks $300M from Mets owners, Wilpon calls suit 'outrageous'

Feb 13 2011, New York — Bernie Madoff and his dirty money were so intertwined with Fred Wilpon's business operations - especially the Mets - that the team owner and his associates had to know that the disgraced Wall Street star was engaged in a massive Ponzi scheme, according to a lawsuit filed by the trustee representing Madoff's victims.

The trustee, Irving Picard, is seeking at least $300 million in "fictitious returns," the net gain from some 200 accounts held by Fred Wilpon, his son, Jeff and Saul Katz, Fred Wilpon's brother-in-law and business partner.

http://articles.nydailynews.com/2011-02-04/sports/28534768_1_saul-katz-irving-picard-madoff-accounts
Feb 23, 2011 at 2:05 PM | Registered CommenterDailyBail
Bernie Madoff insists Wilpons knew nothing of Ponzi scheme in New York Times interview from jail

Diana B. Henriques of the New York Times gets Bernard Madoff to talk now from prison, talk on the record, about massive theft and massive con, about banks and hedge funds, about the funeral of his son Mark, dead to a suicide before Christmas. Madoff talks about all that and about Irving Picard, the court-appointed trustee trying to get back money that Madoff stole.

But when Henriques asks Madoff about Fred Wilpon and Saul Katz of the Mets, whom the trustee Picard says did know or should have known about Madoff's fraud in a legal document that runs to nearly 400 pages, this is what Madoff, the guy who does know, says:

"They knew nothing. They knew nothing."

http://www.nydailynews.com/sports/baseball/mets/2011/02/16/2011-02-16_bernie_madoff_insists_wilpons_knew_nothing_of_ponzi_scheme_in_new_york_times_int.html#ixzz1EoJOXbjE
Feb 23, 2011 at 2:06 PM | Registered CommenterDailyBail
I wonder how much more exposure of this kind of corruption it's going to take before the people wake up and demand a RotoRooter of reform to clean up that sewer called a government in Washington D.C.
Feb 23, 2011 at 2:50 PM | Unregistered CommenterSagebrush
i don't have that answer sage, but you can tell awareness and anger are both growing...
Feb 23, 2011 at 2:52 PM | Registered CommenterDailyBail

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