Magazine article The Spectator

Marked Men

Magazine article The Spectator

Marked Men

Article excerpt


Last week I ventured down to Geneva for a meeting with my banker, a gentleman of the old school who did not get carried away by Bernie Madoff's siren songs. To the contrary, he went as far as Odysseus, tied himself to his desk and plugged up the ears of his underlings.

Metaphorically, that is. He had some interesting things to say. The mega-crook and fraudster never met suckers in person, except for those -- mostly Jewish -- friends of his in Palm Beach and in the Big Bagel.

Europeans and Latin Americans were handled by his feeder fund managers, around 150 known ones, and, according to my banker, perhaps as many as 200 more unknown ones. That's around 300 feeder funds working in secret to provide funds for a man whose name is already an adjective.

A feeder fund manager would approach a bank or a rich individual, announce how regretful it was that the Madoff fund was closed, but drop hints that, if an opening came up, the 'mark' could become a member of the 'club'. The con was on, and sure enough the 'mark' would soon get another visit and hear the good news that finally they could join the club. In my banker's case -- his name shall remain a secret -- he was told that, in view of the fact his bank is as prominent as it is, $500 million would be a minimum investment. My banker friend had contemplated investing perhaps 20 million for a look-see but, after the suggestion of 500 million big ones, told them thanks but no thanks. A wise and prudent man.

When the 'mark' or 'marks' would ask for details, the answer was automatic: 'We cannot reveal anything of Bernie's moves or investments because they might be leaked, and all of Wall Street will follow suit.' Or words to that effect. It was a good con, and they all fell for it. The $500 billion question is, of course, did the feeders know it was a con, or had greed got in the way of common sense? I'd say in the case of Philippe Junot, Charles Fix and Thierry de la Villehuchet, it was definitely the latter. They had, after all, put most of their own money in it. The rest are as suspect to me as those who claimed in Nuremberg they knew nothing of war crimes. Mind you, the Banco Santander has done something about it. Their private clients, who lost 2.33 billion euros to Madoff's con, will be repaid all their original investment. The bank is on to a winner. The payments will be in preferred Santander stock, thus tying up their clients for life, so to speak.

The clients, needless to say, must agree not to sue the bank, thus freeing Santander from litigation that is bound to last for a generation. …

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