Feeds: Email, RSS & Twitter

Get Our Videos By Email


8,300 Unique Visitors In The Past Day


Powered by Squarespace


Search The Archive Of 15,000 Videos




Hank Paulson Is A Criminal - Pass It On

"The Federal Reserve Is A Ponzi Scheme"

Get Our Videos By Email


Bernanke's Replacement: Happy Hour In Santa Cruz

Must See: National Debt Road Trip

"Of Course We're Not Going To  Payback the Chinese."

Dave Chappelle On White Collar Crime

Carlin: Wall Street Owns Washington

SLIDESHOW - Genius Signs From Irish IMF Protest

SLIDESHOW - Airport Security Cartoons - TSA

Most Recent Comments
Cartoons & Photos
« PRESENTING: The Goldmandales | Main | New Bill Requires $1 Million In Liability Insurance To Own A Gun »

Madoff Emails CNBC From Prison, Accuses JPM Of Fraud

Update - Madoff Sends Email To Fox News Accusing JPM

Madoff is now second guessing his guilty plea.

Scott Cohn on Madoff's missives from prison.

'Frustrated' Madoff Now Second-Guessing His Guilty Plea


"You should be aware that I have continued to offer Picard information concerning the complicity of the banks.  I was the only person in my firm that dealt with the officers that handled my account.  Not Frank (DiPascali, a Madoff lieutenant who has pleaded guilty to fraud charges) nor anyone else.  I have little doubt that the information I could provide would clearly demonstrate the vital role JPMorgan and other major banks played in carrying out my fraud, including their role in handling the accounts of my major customers.  The ball is in his court."



The interview that set the chain of events in motion:

Madoff and big banks complicit in fraud.


Update - Madoff Sends Email To Fox News Accusing JPM



Madoff: Banks Knew I Was a Crook (NYT Interview)

Madoff Trustee Sues JPMorgan: "They Were At The Very Center Of Madoff Fraud"

Bernie Madoff, Allen Stanford Tried To Ensnare Libya's Gadhafi In Ponzi Scheme

The Madoff Liquidator - 60 Minutes

Citigroup Saw Warning Signs, Knew Of Madoff Fraud; Picard Suit Wants $430M

Harry Markopolos On 60 Minutes

Harry Markopolos: “Don’t Trust Your Government”

JPM Did A Cost-Benefit to See If It Was Worth Keeping a Ponzi Schemer As a Client


PrintView Printer Friendly Version

EmailEmail Article to Friend

Reader Comments (21)

I hope that soon a peon &/or someone in prison from big banks or corps. open a closet door & all the skeletons fall onto the floor in plain view.

Feb 22, 2013 at 3:26 AM | Unregistered CommenterTR
Must be frustrating being in prison and seeing all the MUCH bigger frauds going on than what sent him to the slammer.
Feb 22, 2013 at 4:37 AM | Unregistered Commenterchiller
There is so much to this story that it's hard to know where to begin. Let's start with what looks like the premium paid to professionals who are criminally complicit in concealing fraud. The key paragraph from Scott Cohn's CNBC article (emphasis mine):

"You should be aware that I have continued to offer Picard information concerning the COMPLICITY OF THE BANKS," Madoff wrote. "I was the only person in my firm that dealt with the officers that handled my account. Not Frank (DiPascali, a Madoff lieutenant who has pleaded guilty to fraud charges) nor anyone else. I have little doubt that the information I could provide would clearly demonstrate THE VITAL ROLE THE MAJOR BANKS... PLAYED, IN CARRYING OUT MY FRAUD, including their role in handling the accounts of my major customers. The ball is in his court."

So Madoff is complaining that Irving Picard, the trustee, is in possession of information implicating "major banks" in the fraud, but is not acting on it. Why is this? The article provides a big fat clue:

"Picard and his firm, BakerHostetler, have billed more than $600 million in fees and expenses, money that is paid by Wall Street firms through their dues to the Securities Investor Protection Corporation."

$600 million. Really? That sounds like an awful lot for a law firm that's paid out only $5 billion to victims of Madoff's fund. By way of comparison, the largest bankrupty in U.S. history was Lehman Brothers. In that case, "Jenner & Block LLP, the law firm chaired by Lehman examiner Anton Valukas, earned $42 million for a year’s work producing a 2,200-page report on the bankruptcy that was published in a Manhattan bankruptcy court last week."


So in comparison to the $40 million in legal fees for the biggest bankrupty ever, the $600 million in services for the Madoff case--which, as the CNBC article states, "is paid by Wall Street firms"--looks a lot more like hush money than straight legal fees.

Strange that Cohn and CNBC aren't interested in checking out Madoff's allegations when there is so much verifiable information in them, no?
Feb 22, 2013 at 1:20 PM | Registered CommenterCheyenne
Picard did sue JPM for $6 billion but it was thrown out I think.


Here's another piece.


The upshot here: after buying Bear Stearns in March of '08 (where Madoff had a long trading relationship), JP Morgan execs smelled a rat and pulled all their funds from Madoff accounts. However, they allegedly failed to tell any of their clients to pull their funds, and these were clients who had invested with Madoff at JPM's recommendation. Not to mention that they didn't contact the SEC to report their suspicions.
Feb 22, 2013 at 2:12 PM | Registered CommenterDailyBail
$600 million. Really? That sounds like an awful lot for a law firm that's paid out only $5 billion to victims of Madoff's fund.


It's a ridiculous sum. My jaw dropped when I heard Cohn.
Feb 22, 2013 at 2:13 PM | Registered CommenterDailyBail
The lawyers at Baker could at least provide a fighter jet or a 2200-page report for that sum. My God...
Feb 22, 2013 at 2:18 PM | Registered CommenterCheyenne
Irving Picard's lawsuit against JPMorgan reveals many names of executives who suspected that Bernie Madoff's fund was a ponzi scheme, but did nothing.

Most damningly, sometime before or after that meeting, JPMorgan did a cost-benefit analysis to determine what would happen IF Madoff turned out to be a ponzi scheme. AND it insured against the chance of Madoff being a fraud.

Feb 22, 2013 at 2:22 PM | Unregistered CommenterDailyBail
BoA continues to dual track mortgages in spite of agreement with fed and will not get into further trouble, the Chinese ave purchased a bunch of taxpayer funded green energy companies in which in return we get nothing, Cuntzine gets to keep his day trader lisence, Made Off is petulant because he has to stay in prison, Mary Joe Gash gets a boat load of STFU money while she toils away at DC insider parties, and the Pope is made to retire because the gays have shoved it up his ass figuratively and maybe literally. Did I miss any of the other major news for the week? I'm sore, tired,and cold. I need a beer. Wake me up when it is over.
Feb 22, 2013 at 2:35 PM | Unregistered CommenterSKINFLINT
As one who billed time in a prior life, $600mil is, to be frank, an impossible legitimate billable number for one firm, even for a firm of BakerHos' size and the years this number covers. Cannot happen, except if over billing is rampant. Did the entire law firm work the Madoff matter for 2 years?

Over billing is a crime, btw...
Feb 23, 2013 at 1:17 PM | Unregistered CommenterJosie
Hitler didn't put up with this crap
Feb 23, 2013 at 3:33 PM | Unregistered CommenterBrian
I must confess that I've been trying to engage Bernie Madoff in a dialogue with correspondence since last month. My most recent missive concludes as follows:

"As you know, the popular press has demonstrated considerable interest in the extent to which mortgage-backed securities were sold to investors with the knowledge that their ratings were vastly erroneous. (This presumes, of course, that the mortgage paperwork was properly conveyed to investment trusts in the first place.) By curious contrast, the press has expressed no interest at all in what is a far more disturbing feature of mortgage-backed securities, namely, that many are not backed by mortgages at all. This has been demonstrated in studies and discussed by people such as Abigail Field, Adam Levitin, and Christopher Whalen (the latter in connection with Bear Stearns).

"Unless all of these people have been misinformed, it begs another question altogether: why is Bernard Madoff being singled out in a multi-trillion dollar sea of fraud? I am most interested in what thoughts you might have on this matter."

I think Madoff would make a fantastic addition to a film explaining the soup-to-nuts fraud that is the U.S. financial system and--more fundamentally--the mockery that the U.S. justice system makes of the rule of law. Ever since the Magna Carta was signed, the law must apply equally to all. If what Madoff did was a crime, then 100,000 bankers belong next to him in prison. Failing that rectification, a simpler one comes to mind: Bernie Madoff needs to be set free.

Just sayin.
Feb 25, 2013 at 2:12 AM | Registered CommenterCheyenne
Over billing is a crime, btw...


I remember the Grisham novel and then the movie with tom cruise where over-billing was a key plot line. Can't remember the name.
Feb 25, 2013 at 4:49 AM | Unregistered CommenterDailyBail

Isn't Bernie jailed somewhere in NC...

In all honesty, I've never felt too bad for Bernie's customers. They missed the warning signs. And before it's over they will get a substantial portion of their principal returned, minus Picard's Lilliputian fee.

I thought Bernie should have gotten 10 years, given his age at the time prosecution. Give the guy a chance to die outside of prison. I think it's ridiculous that no one from any of the complicit feeder funds has been prosecuted. They knew it was a giant fraud, and yet continued to lure customers.

Feb 25, 2013 at 5:08 AM | Registered CommenterDailyBail
Yes, Madoff is inNC. The Cruise movie was called the Firm. The book was better, but now reality is even more fun. It just occurred to me that you guys are not only talking about shitty deals mortgages, but also no paper mortgages. Just what the hell is holding up these firms that purchased all this, not even junk, but no value at all stuff. Such is the life of a dumbass. Don't know if you remember Madoff fell off his bed and broke his face and ribs a couple of years back. With the death of his son by hanging, I would suggest that he won't make it out of there.
Feb 25, 2013 at 7:02 AM | Unregistered CommenterSKINFLINT
Agree with you, DB. As a whole, it's tough to feel bad for Madoff customers. Sure, there are many who did not know the thing was a massive fraud and are hurt. I feel for them. But, right after the thing blew up, we found out many (sophisticated investors, btw) knew it was a crock (12% every year, for life-really?), or thought he was front-running thru his market-making biz, and invested with him because they thought he was front-running, or could get out before it blew because they were close with BM...Wilpons, Picowers, etc...Greed.

And I also agree with you re: feeder funds. What about these guys? That Ezra guy? That Connecticut family who fled to their private island? Bernie goes down alone, essentially, and that's enough flesh for the DOJ? And I still cannot believe that $600mil number. Picard must have nice places in the Hamptons and Palm Beach now...
Feb 25, 2013 at 9:59 AM | Unregistered CommenterJosie
"I've never felt too bad for Bernie's customers."

You shouldn't. Many invested with him on the belief that his high rate of return was due to insider trading or, like Josie says, "because they thought he was front-running." Madoff was, after all, the former head of NASDAQ.


There's an interesting article that says every Ponzi schemes require two separate deceptions [with the 3rd layer below it all that is unaware that there's anything wrong to begin with]. In the case of Madoff, the first layer is the Ponzi itself (known to and profitable for only the Ponzi's managers), while the 2nd layer is the insider trading angle that reeled investors in (who know something is wrong, but have mis-diagnosed the problem).

The author says the U.S. financial system is a Ponzi scheme run by the ESF (1st layer), with the 2nd layer being things like the New World Order, UFOs, the Illuminati, etc. [with the 3rd layer believing everything on TV]. Scary, no?


"complicit feeder funds"

This would appear to be the contention Madoff is making from the Butner Federal Correctional Facility.
Feb 25, 2013 at 12:05 PM | Registered CommenterCheyenne
Q: What's the difference between Madoff and the CEO of a Wall Street bank?

A: Bernie never asked for a Bailout.
Feb 28, 2013 at 12:13 AM | Registered CommenterDailyBail
Mr. De Carbonnell states that he believes the central banks are not complicit in these crimes, that these crimes are being done by the ESF. Though he makes a compelling arguement to these facts and that there is a HUGE black hole of money anti matter, there seems to me at least, some sort of symbiotic relationship between the two and that the central banks have to have some sort of knowledge of fact that there are large sums of printed money going round the planet for dark purposes. Each piece of money has a number on it and so they should know when and if those dollars have been retired etc.
Feb 28, 2013 at 7:20 AM | Unregistered CommenterSKINFLINT

PostPost a New Comment

Enter your information below to add a new comment.

My response is on my own website »
Author Email (optional):
Author URL (optional):
All HTML will be escaped. Hyperlinks will be created for URLs automatically.