I have been warning victims for some time now that if money recovered from the Swiss, Canadian and British banks goes to the US receiver the money won't go to the victims, $226 million will go to the IRS and we (The victims) will be lucky to see anything!
The joint liquidators on Antigua (Grant Thornton) have a claims process setup and have pledged to distribute any money they recover to the victims.
Kate
Posted Mar 16th 2009 12:45PM by Zac Bissonnette
Filed under: Law, Scandals
If the allegations are to be believed, Robert Allen Stanford ripped off his
investors to the tune of $8 billion and managed to cheat the IRS out of its
cut of his ill-gotten gains as well.
The IRS has asked a judge to allow it to continue its efforts to collect
$226.6 million in back taxes -- and there may be more to come because
Stanford still hasn't filed his 2007 tax return.
Maybe I'm naive in the ways of massive fraud and its tax implications, but
here's what I don't understand: Thousands of investors are in all
probability out billions of dollars because of Mr. Stanford's alleged
conduct. Given that, every penny that the IRS collects from him represents a
penny that won't be available to his victims.
I understand that the IRS has a legal right to pursue whatever money it
feels it is owed, but shouldn't the remains of the Stanford carcass be left
for his victims?
Bloomberg reports that "Investors in R. Allen Stanford's Antiguan bank may
have to get in line behind the Internal Revenue Service as they seek to
recover money from the alleged swindler."
Taxpayer money has already been used to pay bonuses to the AIG executives
who put the company in a position to need a bailout. Given that, shouldn't
we let money that was stolen from innocent investors be used to pay them
back -- instead of stuffing it into the United States treasury?
Showing posts with label banks. Show all posts
Showing posts with label banks. Show all posts
Monday, 19 March 2012
Saturday, 10 December 2011
Observations on Report by Morganstern Re Stanford-Related Cases
UPDATE ON STATUS OF MORGENSTERN STANFORD-RELATED CASES; CONTINUING RECOVERY EFFORTS AND CASE DEVELOPMENTS
December 9, 2011
PM says:
Peter D. Morgenstern
December 9, 2011
PM says:
Since our last update, there have been several developments that I wanted to call to your attention. This past Monday, we filed our response to the bank defendant's motions to dismiss our complaint against them. Unfortunately, we are not in a position to share the actual response with you because of confidentiality requirements imposed on us. We will continue to aggressively press ahead with this lawsuit against the banks, and have asked the Court to permit the Official Stanford Investors’ Committee (on which we serve) to join the case. The banks have an opportunity to respond, and it is unclear when the Court will consider and decide the motions. We remain confident about our cases, and believe that the claims against the banks could result in significant recoveries. Of course there remain no guarantees of success.
So you filed your response to the banks but we can’t know what that response is, well there’s a familiar story. Surely if you are filing on behalf of your clients (Stanford victims) then the clients have a right to know what you are saying? How much more time (It’s been nearly 3 years since you originally filed these actions against the banks) are you going to spend on these lawsuits before we hear something positive? And, as these are class action lawsuits (filed in Texas I believe) are they all going to be thrown out under SLUSA ? Can you also give me a reason why you feel the need to include the committee to join this case? I am glad you are not giving any guarantees about this one as I lost all confidence in this action a long time ago.
PM says:
On a second front, the hearing on the Antiguan liquidators’ motion for Chapter 15 recognition is scheduled for December 21 in Dallas. We are actively opposing that application, as we are very concerned about the prospect of the Antiguan court and government exercising control over (i) the hundreds of millions of funds located and frozen by the Department of Justice in overseas bank accounts, and (ii) the Antiguan government gaining access to litigation recoveries that we anticipate in the future and other assets. The Antiguan government itself owes at least tens, if not hundreds of millions of dollars to the Stanford investors, has a history of being corrupt, facilitated and was complicit in this fraud, and has since even failed to extradite Leroy King to the United States to respond to the serious criminal charges pending against him. Although the U.S. legal system is certainly not perfect, we believe it to be far superior to the Antiguan alternative for maximizing investor recoveries.
If you bothered to take any interest in the mood of Antigua, the government here and what is happening, you would (and do) know that Grant Thornton are acting completely independent from the Antigua Government. You would also know that the courts here come under English law and the appeals procedure again is laid down in English law. To date the courts in the US do not appear to be doing a very good job for the victims, hell they allowed mostly US lawyers to highjack all the positions on the committee. You also know that the Antigua government no longer have possession of any of the Stanford properties and assets and that Grant Thornton are working very hard to bring these under their control for the benefit of all victims. Talking about what the Antigua government owes to the victims, how about we look at what the US politicians owe from “donations” made by Stanford? Isn’t it about time all these politicians paid the money back? It comes to far more than Antigua ever borrowed from Stanford? Again, you talk about the Antigua government being complicit in the fraud. What about America, the CIA, the DEA, the last president, the SEC, the politicians? Compare that to one stupid Antiguan who accepted cash to keep Stanford informed about what was happening, he was a very small fish and he will be brought to justice. Let’s get things into prospective and get your own house in order before you start on Antigua. Also while we are talking about maximising the investors recovery, let’s just think for a moment about the IRS and what they are sitting waiting to take out of the Stanford estate, $260Million I believe at the last count and that can change if and when they take into account the $1.8 Billion “loan” that Stanford gave himself.
PM says:
Our opposition to the Antiguan liquidators is not an endorsement of how this case has proceeded to date. We remain very frustrated by the lack of substantial progress, and are continuing our constant efforts to speed up the cases and maximize recovery for all Stanford investors.
Grant Thornton have only been in situ for less than 6 months and have done a fantastic job, not least at keeping the investors informed about what they are doing and what is happening. They have brought together a TOTALLY INDEPENDENT VICTIM committee, which surprise, surprise is actually made up of VITIMS from around the world. They are asking the victims what their questions are and they are taking the trouble to answer those questions. Compare this to the US committee who for the most part have ignored letters and questions from the victims, have ignored their grievances, for the most part have failed to keep the victims informed, have misled the victims (I refer here to the idea and original composition of the committee we were led to believe would be formed). It’s no wonder they don’t want another (in my opinion) more professional and capable group of Liquidators (GT) coming in and spoiling their nice cosy little set-up.
PM says:
As usual, there continue to be unfounded and untrue rumors being circulated about the Investors Committee. The Committee, which we are part of, is working very hard and represents ALL Stanford investors, regardless of nationality or residence. This allegation about the Committee only serving U.S. investors, is completely untrue and unfair. This was the finding of the Court when it recently denied an attempt by the Kachroo firm to reconstruct the Committee, and denied their motion to intervene in the case.
With regard to the rumours, how are the victims supposed to feel when (see comments above) we have been ignored and to date the majority of efforts seem to have been spent trying to get SIPC for mainly US victims. The committee is made up of mainly Americans, the Political scene is working purely for the American victims, Angela Shaw sends out emails saying she will ONLY REPRESENT THE AMERICANS….der, I wonder why all the international victims doubt your sincerity about representing them? With regard to the finding of the courts regarding Kachroo’s motion to intervene,I believe this was denied on a point of law. Actions speak louder than words and the actions of the committee to date reflect the grave concerns the International Victims have about their neglect by you and the committee. If victim beleive they are not being fairly represented then clearly you have afiled to keep them informed. It would seem that Kachroo gave you all the kick up the butt that was so badly needed.
We are continuing to move forward with our investigation of potential sources of recoveries, are in discussions (which cannot be made public) with certain significant litigation targets, and are proceeding as quickly as possible with the filed litigations seeking substantial recoveries for investors. We are also representing your interests in all of the major court proceedings.
PM says:
I expect that we will have a further report for you after the next Court hearing on December 21. I know that many of you are frustrated by our lack of personal, individual contact with you. We are trying our best to concentrate virtually all of our efforts on the lawsuits and recovery efforts which we hope will result in significant distributions to you eventually. After the hearings in December and the upcoming holidays, I do plan to schedule a trip to Mexico and other locations, at the beginning of the year, to provide an in-person update to anyone who is interested in attending. In the meantime, please keep watching for updates and monitor the examiner’s website for other Committee news.
Well you are right about us being frustrated by your lack of personal, individual contact. There are a lot of very disillusioned victims out there. Hope you plan a trip to Antigua, I would LOVE to meet up with you…and while you are at it, please bring Ms. Shaw, I would also love to meet her…as would most of the Antigua population!!
Finally, we are all anxiously awaiting word about the commencement of Allen Stanford’s criminal trial, which remains unscheduled. We will provide you with that information as soon as possible.
Peter D. Morgenstern
Friday, 25 February 2011
Wednesday, 16 February 2011
From Prison, Madoff Says Banks ‘Had to Know’ of Fraud
Bernard L. Madoff said he never thought the collapse of his Ponzi scheme would cause the sort of destruction that has befallen his family.
In his first interview for publication since his arrest in December 2008, Mr. Madoff — looking noticeably thinner and rumpled in khaki prison garb — maintained that family members knew nothing about his crimes.
But during a private two-hour interview in a visitor room here on Tuesday, and in earlier e-mail exchanges, he asserted that unidentified banks and hedge funds were somehow “complicit” in his elaborate fraud, an about-face from earlier claims that he was the only person involved.
Mr. Madoff, who is serving a 150-year sentence, seemed frail and a bit agitated compared with the stoic calm he maintained before his incarceration in 2009, perhaps burdened by sadness over the suicide of his son Mark in December.
Besides that loss, his family also has faced stacks of lawsuits, the potential forfeiture of most of their assets, and relentless public suspicion and enmity that cut Mr. Madoff and his wife Ruth off from their children.
In many ways, however, Mr. Madoff seemed unchanged. He spoke with great intensity and fluency about his dealings with various banks and hedge funds, pointing to their “willful blindness” and their failure to examine discrepancies between his regulatory filings and other information available to them.
“They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ ”
While he acknowledged his guilt in the interview and said nothing could excuse his crimes, he focused his comments laserlike on the big investors and giant institutions he dealt with, not on the financial pain he caused thousands of his more modest investors. In an e-mail written on Jan. 13, he observed that many long-term clients made more in legitimate profits from him in the years before the fraud than they could have elsewhere. “I would have loved for them to not lose anything, but that was a risk they were well aware of by investing in the market,” he wrote.
Mr. Madoff said he was startled to learn about some of the e-mails and messages raising doubts about his results — now emerging in lawsuits — that bankers were passing around before his scheme collapsed.
“I’m reading more now about how suspicious they were than I ever realized at the time,” he said with a faint smile.
He did not assert that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth. Rather, he cited a failure to conduct normal scrutiny.
Both the interview and the e-mail correspondence were conducted as part of this reporter’s research for a coming book on the Madoff scandal, “The Wizard of Lies: Bernie Madoff and the Death of Trust,” for publication this spring by Times Books, a division of Henry Holt & Company.
In the interview and e-mails, he also claimed he had been helping the court-appointed trustee who is seeking to recover lost billions on behalf of his swindled clients. In e-mails, Mr. Madoff said repeatedly that he provided useful information to Irving H. Picard, the trustee trying to recover assets for the fraud victims. He met with Mr. Picard’s team over four days last summer, he said. The e-mails were written in December and January, but he only recently agreed that they could be made public.
In prison, Mr. Madoff’s access to the outside world is both limited and monitored. All visitors must be approved by prison authorities, who also screen his limited collect calls and his incoming and outgoing e-mails and letters, though interviews with lawyers like Mr. Picard and his colleagues are less restricted and can be conducted in private.
Asked about his cell, he described a room about 12 feet square with a big window looking out on the grounds; he said he had a roommate, the second since he arrived at the prison.
It was clear from the e-mails and interview here that Mr. Madoff closely followed news related to his case in December, the second anniversary of his arrest. He lashed out at what he called some of the “disgraceful” coverage of the suicide of his son Mark on Dec. 11.
Disputing reports that he refused to attend any funeral services for Mark, he said the prison informed him it would not approve a request for him to attend a service because of “the public safety issue” and the limited time available to make arrangements. He concluded any funeral he attended “would be a media circus” and that it “would be cruel to my family” to put them through that, he wrote on Dec. 29.
Regarding his meetings with Mr. Picard’s legal team, Mr. Madoff asserted in an e-mail written on Dec. 19 that he had given Mr. Picard’s legal team “information I knew would be instrumental in recovering assets from those people complicit in the mess I put myself into.”
In a message 10 days later, he was even more explicit about what he told the trustee: “I am saying that the banks and funds were complicit in one form or another and my information to Picard when he was here established this.”
Mr. Madoff’s claims must be weighed against his tenuous credibility. After deceiving federal regulators and supposedly sophisticated investors for at least 16 years, he would certainly be branded as a liar by defense lawyers if he appeared as a witness against any defendant in a courtroom — a fact he acknowledged somewhat ruefully during the interview on Tuesday.
Despite his many references to the complicity of others, he acknowledged in the Dec. 19 e-mail that he had not shared his information with the federal prosecutors working on criminal cases related to his fraud — although the trustee most likely would have done so, if Mr. Madoff’s information was relevant to the investigation.
Mr. Madoff wrote in an e-mail that while he was willing “from the beginning” to give prosecutors information “to help recover assets only, I refused to help provide them with criminal evidence.” In the interview he declined to discuss any of the criminal cases under investigation.
In the months after the Picard team’s prison interviews, the trustee’s law firm, Baker & Hostetler, filed hundreds of civil lawsuits seeking approximately $90 billion in damages and fictional profits withdrawn from Mr. Madoff’s scheme over the years. The defendants in those cases included the Wilpon family, the owners of the New York Mets; JPMorgan Chase, which served for decades as Mr. Madoff’s primary banker; and Sonja Kohn, the Viennese financier at the hub of a network of hedge funds that invested heavily with Mr. Madoff.
Mr. Madoff said about Fred Wilpon and Saul Katz, Mr. Wilpon’s brother-in-law and business partner: “They knew nothing. They knew nothing.”
There was no obvious sign that any of those lawsuits were based on evidence or guidance from Mr. Madoff. All the defendants have said they had no knowledge of the fraud and have denied the trustee’s claims that, as financially sophisticated investors, they should have been suspicious from the beginning.
Mr. Picard declined to comment on whether his team had interviewed Mr. Madoff and would not say whether information from him had contributed to the vast body of litigation filed since last summer.
In some e-mails, Mr. Madoff conceded that Mr. Picard’s team conducted its own investigation into the withdrawals made by some big clients, in the years before the Ponzi scheme collapsed, to determine who might have known what and when. Such withdrawals could indicate that investors could have been aware of the fraud, which could increase their liability.
However, Mr. Madoff added, “the facts are that I alone was present at certain meetings with these clients.”
To date, none of the major banks or hedge funds that did business with Mr. Madoff have been accused by federal prosecutors of knowingly investing in his Ponzi scheme. However, Mr. Picard in civil lawsuits has asserted that executives at some banks expressed suspicions for years, yet continued to do business with Mr. Madoff and steer their clients’ money into his hands.
All the financial entities facing civil lawsuits by Madoff victims and Mr. Picard have denied they had any knowledge of the fraud.
In a related e-mail on Jan. 12, Mr. Madoff cited out-of-court settlements that some banks and funds had negotiated with private Madoff investors over the last two years and claimed some settlements were made “to keep me quiet” about the role the institutions played in “creating my situation” and about the identity of the beneficial owners of some of their private accounts.
Mr. Picard has already recovered roughly $10 billion through asset sales and settlements with several foreign banks and a few significant Madoff clients, including the estate of a private investor, Jeffry Picower, and the family of Carl Shapiro, a philanthropist in Palm Beach, Fla.
While the Picower settlement had been under negotiation since at least the fall of 2009, the settlements with the Shapiro family and a Swiss bank, Union Bancaire Privée, both came after Mr. Picard’s trip to the prison here in Butner. But because both settlements came before Mr. Picard had filed any public claims in court, it is unclear whether information from Mr. Madoff was a factor in those settlement talks.
Neither Mr. Shapiro nor the Swiss bank has been accused of any complicity in Mr. Madoff’s crimes, and Mr. Picard has publicly acknowledged their good-faith cooperation with his inquiries when he announced the settlement agreements, which totaled more than $1 billion.
The only people formally charged with complicity in Mr. Madoff’s crime are his former auditor and members of his own staff.
Although Mr. Madoff swore in court that he had carried out his elaborate fraud on his own, his accountant, David H. Friehling, and Mr. Madoff’s senior lieutenant, Frank DiPascali, have pleaded guilty and are cooperating with prosecutors. Five other former Madoff employees have been indicted; they have asserted their innocence and are awaiting trial.
While Mr. Madoff said he was determined to aid the trustee’s efforts to recover assets, he was also critical of the trustee’s reach, claiming that Mr. Picard was seeking far more money than was needed to resolve valid investor claims.
In addition to the customer claims for the cash losses and the paper wealth that vanished, the Madoff estate also faces claims by general creditors, like unpaid vendors and landlords, who cannot recover until all the valid customer claims are paid.
Mr. Madoff argued in several e-mails that Mr. Picard’s responsibility was to return only the $20 billion in out-of-pocket cash that investors lost in his scheme.
Given that Mr. Picard has already recovered roughly $10 billion, Mr. Madoff calculated that the lawsuits against major banks and hedge funds would produce more than enough to cover the rest of the cash losses without Mr. Picard having to pursue “clawback” litigation against some longtime investors who withdrew more from their accounts than they put.
In his first interview for publication since his arrest in December 2008, Mr. Madoff — looking noticeably thinner and rumpled in khaki prison garb — maintained that family members knew nothing about his crimes.
But during a private two-hour interview in a visitor room here on Tuesday, and in earlier e-mail exchanges, he asserted that unidentified banks and hedge funds were somehow “complicit” in his elaborate fraud, an about-face from earlier claims that he was the only person involved.
Mr. Madoff, who is serving a 150-year sentence, seemed frail and a bit agitated compared with the stoic calm he maintained before his incarceration in 2009, perhaps burdened by sadness over the suicide of his son Mark in December.
Besides that loss, his family also has faced stacks of lawsuits, the potential forfeiture of most of their assets, and relentless public suspicion and enmity that cut Mr. Madoff and his wife Ruth off from their children.
In many ways, however, Mr. Madoff seemed unchanged. He spoke with great intensity and fluency about his dealings with various banks and hedge funds, pointing to their “willful blindness” and their failure to examine discrepancies between his regulatory filings and other information available to them.
“They had to know,” Mr. Madoff said. “But the attitude was sort of, ‘If you’re doing something wrong, we don’t want to know.’ ”
While he acknowledged his guilt in the interview and said nothing could excuse his crimes, he focused his comments laserlike on the big investors and giant institutions he dealt with, not on the financial pain he caused thousands of his more modest investors. In an e-mail written on Jan. 13, he observed that many long-term clients made more in legitimate profits from him in the years before the fraud than they could have elsewhere. “I would have loved for them to not lose anything, but that was a risk they were well aware of by investing in the market,” he wrote.
Mr. Madoff said he was startled to learn about some of the e-mails and messages raising doubts about his results — now emerging in lawsuits — that bankers were passing around before his scheme collapsed.
“I’m reading more now about how suspicious they were than I ever realized at the time,” he said with a faint smile.
He did not assert that any specific bank or fund knew about or was an accomplice in his Ponzi scheme, which lasted at least 16 years and consumed about $20 billion in lost cash and almost $65 billion in paper wealth. Rather, he cited a failure to conduct normal scrutiny.
Both the interview and the e-mail correspondence were conducted as part of this reporter’s research for a coming book on the Madoff scandal, “The Wizard of Lies: Bernie Madoff and the Death of Trust,” for publication this spring by Times Books, a division of Henry Holt & Company.
In the interview and e-mails, he also claimed he had been helping the court-appointed trustee who is seeking to recover lost billions on behalf of his swindled clients. In e-mails, Mr. Madoff said repeatedly that he provided useful information to Irving H. Picard, the trustee trying to recover assets for the fraud victims. He met with Mr. Picard’s team over four days last summer, he said. The e-mails were written in December and January, but he only recently agreed that they could be made public.
In prison, Mr. Madoff’s access to the outside world is both limited and monitored. All visitors must be approved by prison authorities, who also screen his limited collect calls and his incoming and outgoing e-mails and letters, though interviews with lawyers like Mr. Picard and his colleagues are less restricted and can be conducted in private.
Asked about his cell, he described a room about 12 feet square with a big window looking out on the grounds; he said he had a roommate, the second since he arrived at the prison.
It was clear from the e-mails and interview here that Mr. Madoff closely followed news related to his case in December, the second anniversary of his arrest. He lashed out at what he called some of the “disgraceful” coverage of the suicide of his son Mark on Dec. 11.
Disputing reports that he refused to attend any funeral services for Mark, he said the prison informed him it would not approve a request for him to attend a service because of “the public safety issue” and the limited time available to make arrangements. He concluded any funeral he attended “would be a media circus” and that it “would be cruel to my family” to put them through that, he wrote on Dec. 29.
Regarding his meetings with Mr. Picard’s legal team, Mr. Madoff asserted in an e-mail written on Dec. 19 that he had given Mr. Picard’s legal team “information I knew would be instrumental in recovering assets from those people complicit in the mess I put myself into.”
In a message 10 days later, he was even more explicit about what he told the trustee: “I am saying that the banks and funds were complicit in one form or another and my information to Picard when he was here established this.”
Mr. Madoff’s claims must be weighed against his tenuous credibility. After deceiving federal regulators and supposedly sophisticated investors for at least 16 years, he would certainly be branded as a liar by defense lawyers if he appeared as a witness against any defendant in a courtroom — a fact he acknowledged somewhat ruefully during the interview on Tuesday.
Despite his many references to the complicity of others, he acknowledged in the Dec. 19 e-mail that he had not shared his information with the federal prosecutors working on criminal cases related to his fraud — although the trustee most likely would have done so, if Mr. Madoff’s information was relevant to the investigation.
Mr. Madoff wrote in an e-mail that while he was willing “from the beginning” to give prosecutors information “to help recover assets only, I refused to help provide them with criminal evidence.” In the interview he declined to discuss any of the criminal cases under investigation.
In the months after the Picard team’s prison interviews, the trustee’s law firm, Baker & Hostetler, filed hundreds of civil lawsuits seeking approximately $90 billion in damages and fictional profits withdrawn from Mr. Madoff’s scheme over the years. The defendants in those cases included the Wilpon family, the owners of the New York Mets; JPMorgan Chase, which served for decades as Mr. Madoff’s primary banker; and Sonja Kohn, the Viennese financier at the hub of a network of hedge funds that invested heavily with Mr. Madoff.
Mr. Madoff said about Fred Wilpon and Saul Katz, Mr. Wilpon’s brother-in-law and business partner: “They knew nothing. They knew nothing.”
There was no obvious sign that any of those lawsuits were based on evidence or guidance from Mr. Madoff. All the defendants have said they had no knowledge of the fraud and have denied the trustee’s claims that, as financially sophisticated investors, they should have been suspicious from the beginning.
Mr. Picard declined to comment on whether his team had interviewed Mr. Madoff and would not say whether information from him had contributed to the vast body of litigation filed since last summer.
In some e-mails, Mr. Madoff conceded that Mr. Picard’s team conducted its own investigation into the withdrawals made by some big clients, in the years before the Ponzi scheme collapsed, to determine who might have known what and when. Such withdrawals could indicate that investors could have been aware of the fraud, which could increase their liability.
However, Mr. Madoff added, “the facts are that I alone was present at certain meetings with these clients.”
To date, none of the major banks or hedge funds that did business with Mr. Madoff have been accused by federal prosecutors of knowingly investing in his Ponzi scheme. However, Mr. Picard in civil lawsuits has asserted that executives at some banks expressed suspicions for years, yet continued to do business with Mr. Madoff and steer their clients’ money into his hands.
All the financial entities facing civil lawsuits by Madoff victims and Mr. Picard have denied they had any knowledge of the fraud.
In a related e-mail on Jan. 12, Mr. Madoff cited out-of-court settlements that some banks and funds had negotiated with private Madoff investors over the last two years and claimed some settlements were made “to keep me quiet” about the role the institutions played in “creating my situation” and about the identity of the beneficial owners of some of their private accounts.
Mr. Picard has already recovered roughly $10 billion through asset sales and settlements with several foreign banks and a few significant Madoff clients, including the estate of a private investor, Jeffry Picower, and the family of Carl Shapiro, a philanthropist in Palm Beach, Fla.
While the Picower settlement had been under negotiation since at least the fall of 2009, the settlements with the Shapiro family and a Swiss bank, Union Bancaire Privée, both came after Mr. Picard’s trip to the prison here in Butner. But because both settlements came before Mr. Picard had filed any public claims in court, it is unclear whether information from Mr. Madoff was a factor in those settlement talks.
Neither Mr. Shapiro nor the Swiss bank has been accused of any complicity in Mr. Madoff’s crimes, and Mr. Picard has publicly acknowledged their good-faith cooperation with his inquiries when he announced the settlement agreements, which totaled more than $1 billion.
The only people formally charged with complicity in Mr. Madoff’s crime are his former auditor and members of his own staff.
Although Mr. Madoff swore in court that he had carried out his elaborate fraud on his own, his accountant, David H. Friehling, and Mr. Madoff’s senior lieutenant, Frank DiPascali, have pleaded guilty and are cooperating with prosecutors. Five other former Madoff employees have been indicted; they have asserted their innocence and are awaiting trial.
While Mr. Madoff said he was determined to aid the trustee’s efforts to recover assets, he was also critical of the trustee’s reach, claiming that Mr. Picard was seeking far more money than was needed to resolve valid investor claims.
In addition to the customer claims for the cash losses and the paper wealth that vanished, the Madoff estate also faces claims by general creditors, like unpaid vendors and landlords, who cannot recover until all the valid customer claims are paid.
Mr. Madoff argued in several e-mails that Mr. Picard’s responsibility was to return only the $20 billion in out-of-pocket cash that investors lost in his scheme.
Given that Mr. Picard has already recovered roughly $10 billion, Mr. Madoff calculated that the lawsuits against major banks and hedge funds would produce more than enough to cover the rest of the cash losses without Mr. Picard having to pursue “clawback” litigation against some longtime investors who withdrew more from their accounts than they put.