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Jp Morgan Chase, Bernie Madoff's Unknowing Money Laundry, And Other Ancillary Tales

Edward Jay Epstein has been filling in the holes (three in recent weeks right here) in the saga of Bernard Madoff who, as a friend said to me the other day, was satanic enough to contribute money to charities from which he stole.

One of the big lacunae was how Madoff did and hid his money laundering. Actually, it's not so complicated, as Edward Jay Epstein demonstrates below:

Bernard Madoff did not merely plead guilty to running a multi-billion dollar Ponzi Scheme. He' also pleaded guilty to multiple counts of "international money laundering." This latter criminal enterprise has not fully come to light because while Madoff talked freely to prosecutors about the mechanics of the swindle itself, he stonewalled the court-appointed Trustee Irving Picard's effort to unravel his tangle of money laundering to the extent that his counsel, David Sheehan, wrote the court just before his sentencing that Madoff has "not provided meaningful cooperation or assistance to the trustee since his arrest." So even looking at a 150 year prison sentence, his money laundering operation therefore remains a crucial missing piece in the puzzle. ...  As far as the actual money went, Madoff shuffled between two different bank accounts, siphoning off some of it to pay the clients who withdrew their money. He also wrote checks to pay for his life style and operating expenses (both licit and illicit). These banking records as well as the checks he wrote and credit card bills are now in the hands of the Trustee's forensic accountants. Their analysis shows that all the money that Madoff withdrew for himself and family members, including everything from his expenditures on yachts, country clubs, real estate, plane and travel to loans to his children, gifts, and capital calls on his wife's private equity investments, amount to less than one percent of the stolen money. The money Madoff withdrew from all his bank accounts to run his scam, including rent for his offices in the Lipstick building in Manhattan, his payroll (which included his boat crew), commercial taxes, accounting, legal bills, and even the surreptitious kickbacks to fund managers through his London subsidiary amounts to, at most, another 4 percent. He paid these expenses by wiring money to his London subsidiary which then wired it back to his account at Bank Of New York Mellon.