Madoff may not have benefited most in scam

[Amerigo Vespucci]

Source: MSNBC

It is rare these days to see Bernard Madoff's name in print unaccompanied by the word "Ponzi." Yet recent allegations raise the possibility of one key difference between Madoff's crimes and those of legendary con artist Charles Ponzi. While Ponzi's scam was under way, Ponzi himself was its biggest beneficiary. It now appears that the biggest winner in Madoff's scheme may not have been Madoff at all, but a secretive businessman named Jeffry Picower.

Between December 1995 and December 2008, Picower and his family withdrew from their various Madoff accounts $5.1 billion more than they invested with the self-confessed swindler, according to a lawsuit filed by the trustee who is trying to recover money for those Madoff defrauded.

In contrast, shortly after he confessed, Madoff declared his household net worth to be between $823 million and $826 million, according to court documents. While the Madoffs clearly lived opulently, no evidence has emerged that their combined assets and expenditures approached the amount the Picower family is alleged to have withdrawn from the scheme.

In an era when billions of dollars are being tossed about in financial collapses and government bailouts, remarkably little attention has been paid to Jeffry Picower's extraordinary success with Bernie Madoff. If Picower has penetrated the popular consciousness at all, it is as a Madoff victim. The victim narrative is buoyed by testimonials from the nonprofits who received funding from his charitable foundation — which quickly closed on the heels of the swindler's confession. For this reason, ProPublica decided to take a closer look at both Jeffry Picower and the complaint filed against him by Madoff trustee Irving Picard.

Read more: http://www.msnbc.msn.com/id/31510209/ns/business-small_business/

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Jeffry Picower, shown with his wife Barbara in picture at Picower Institute, has avoided media interviews and, with a few notable exceptions, keeps a low profile. If the Picowers were recognized at all, prior to their Madoff notoriety, it was through praise for their philanthropy.

[imdjh]

1. I'm starting to believe it is true: Behind every great fortune is a great crime. nt

[Amerigo Vespucci]

2. I'd like to see the Prescott Bush story taught in every classroom in the United States.

How Bush's grandfather helped Hitler's rise to power

http://www.guardian.co.uk/world/2004/sep/25/usa.secondworldwar

George Bush's grandfather, the late US senator Prescott Bush, was a director and shareholder of companies that profited from their involvement with the financial backers of Nazi Germany.

The Guardian has obtained confirmation from newly discovered files in the US National Archives that a firm of which Prescott Bush was a director was involved with the financial architects of Nazism.

His business dealings, which continued until his company's assets were seized in 1942 under the Trading with the Enemy Act, has led more than 60 years later to a civil action for damages being brought in Germany against the Bush family by two former slave labourers at Auschwitz and to a hum of pre-election controversy.

The evidence has also prompted one former US Nazi war crimes prosecutor to argue that the late senator's action should have been grounds for prosecution for giving aid and comfort to the enemy.

The debate over Prescott Bush's behaviour has been bubbling under the surface for some time. There has been a steady internet chatter about the "Bush/Nazi" connection, much of it inaccurate and unfair. But the new documents, many of which were only declassified last year, show that even after America had entered the war and when there was already significant information about the Nazis' plans and policies, he worked for and profited from companies closely involved with the very German businesses that financed Hitler's rise to power. It has also been suggested that the money he made from these dealings helped to establish the Bush family fortune and set up its political dynasty.

[customerserviceguy]

3. Until I have at least a shadow of evidence that Bernie let him in on the scheme

I'm going to assume this Picower guy is innocent. It is inevitable that there would have been some that have taken out more than they put in, if we assume that the investors thought the whole thing was 100% legit (and even a mere year ago, anyone would have made that assumption), then why not withdraw your investment earnings and even a hefty portion of your principal, if you have other goals for it?

From what I've read, the Picower Institute has been devoted to medical research related to mental health issues, if you or someone you love is ever cured of autism, dementia or Alzheimers, perhaps it will be from research done by a doctor or team of doctors who got a grant from this foundation.

[druidity33]

5. according to the article

(if you read all 3 pages), the Picower Foundation was in the habit of telling Madoff what gain percentage they wanted to earn. "Yo Bernie! I need a return of 18% this year, that ok?"... "sure", says Bernie. "I'll just backdate all these transactions and fudge a few numbers for ya...".



Whether they did good work or not... it looks to me like they took advantage. People don't write their own profit margin. And if you think about this:

"By 2007, it was reporting about $958 million in assets and about $23.4 million in donations for the year."

That's what, 2% towards their Foundation work? And that's only what they're reporting. The article states they withdrew nearing 6 Billion dollars. Think they really earned that dough?


:shrug:

[customerserviceguy]

8. And if I went to a stock broker

and said, "I need to make a return of 10% (to beat what I could get in an alternative investment)," then that would be pretty much the same thing, wouldn't it?

I do believe that questions need to be asked, and the foundation and the Picowers need more investigating, but I'm withholding judgement until I see more.

[truthisfreedom]

6. Did you read the article?

[Hannah Bell]

11. the foundation was part of the scam. they were bleeding it for their own profit; it was a front,

tax free.

a lot of foundations are scams. "good works" aren't always what they seem.

Major foundation falls to Madoff fraud
Prominent MIT, Harvard benefactor to close; May be largest charity claimed by scandal

By Jeffrey Krasner and Tracy Jan
Globe Staff / December 20, 2008

The unfolding scandal surrounding the alleged Ponzi scheme run by Bernard L. Madoff yesterday claimed as a victim one of the largest foundations in the country, which has funded groundbreaking brain research at the Massachusetts Institute of Technology and diabetes research at Harvard Medical School.

The Picower Foundation of Palm Beach sent an e-mail to "colleagues and friends" late yesterday saying that it was a victim of Madoff's alleged scheme and that it would soon shut down. With assets of more than a half-billion dollars, it is believed to be the largest charity to have been forced to close by the unfolding scandal.

"It is with great sadness that I write to inform you that the Picower Foundation has ceased all grant-making, effective immediately, and will close its doors in the coming months," wrote Barbara Picower, the foundation's president, who added that its money was managed by Madoff.

[lindisfarne]

4. There was an article a while back that said they were going to try to recover from people who profit

profited from the fund by pulling out money before things collapsed (even years before) - something about their proceeds being from ill-gotten gains.

http://www.msnbc.msn.com/id/30390787/

[DFW]

7. Withdrew $5.1 billion MORE than they invested?

How much DID they invest, and where, pray tell, did it come from?

Grandma's mattress must have been the size of Rhode Island.

[NashVegas]

9. A Better Question Might Be "What" Did They Invest, Rather Than "How Much"

I suspect that if you check the drying machine filters in Bernie's Laundromat, you'd probably find a little drug residue.

[leveymg]

10. Picower Foundation was major contributor to Israeli charities and settlers

http://blogs.forward.com/bintel-blog/tags/picower-foundation/

December 20, 2008, 2:36pm

Billion-Dollar Foundation To Shutter Amid Madoff Woes
By Gabrielle Birkner

A billion-dollar foundation that gave to a wide array of Jewish causes is the latest charitable organization to announce that it is closing in the wake of Bernard Madoff’s financial collapse.

The 19-year-old, Palm Beach, Fla.-based Picower Foundation, which distributed more than $23 million in 2007 — including gifts to about two dozen Jewish organizations — announced Friday that it will shutter, the New York Times and other news organizations are reporting.

According to its 2007 tax return, the foundation gave $225,000 to the Limmud NY conference of Jewish learning; $185,000 to the Jewish Outreach Institute, which provides support services to interfaith families; $109,278 to the Foundation for Jewish Camping, and $100,000 to a program that aids children and families living in Sderot, Israel. Picower also made five-figure gifts to such organizations as the Jewish Coalition for Service, AVODAH, Hillel, Jewish Family & Life, the Jewish Television Network, and the JCC in Manhattan.

Medical research institutions, after-school programs, and human rights organizations also benefited from foundation grants. Picower assets are valued at nearly $1 billion.

This largesse appears to have been a common denominator among many of the largest Madoff feeder funds and clients.

[leveymg]

13. Picower - Boesky and conservative politics - this also smells like Carl Lindner, McCain's

patron and mentor to Charles Keating, of S&L ripoff fame. Here's another common link: BCCI.

[Hannah Bell]

12. Boesky crony, shady "charity".

http://www.forbes.com/forbes/2002/1014/068_print.html.

What government enforcers keep tax-exempt institutions responsive to the public interest? Often, none--witness the goings-on at Jeffry Picower's charities.


Jeffry M. Picower, 60, is a rich man. The former New York lawyer and accountant is worth at least $300 million, the fruits of his days as a tax shelter promoter, greenmailer, investor in Ivan Boesky's arbitrage fund and all-around dealmaker. Perhaps his cleverest deal of all is one he made with himself. In that deal he got control of a potential gold mine of a medical discovery.

Deal with himself? The curious story starts a little over a decade ago, when Picower set up two charities, the Picower Foundation in Palm Beach, Fla. and the Picower Institute for Medical Research in Manhasset, N.Y. Using those vehicles, he donated money for medical research and other worthy causes. Lots of it: Assets of the foundation were last reported at $615 million.

As is not uncommon in medical research, the scientists working for the institute were given an economic incentive: Some of them got shares in a for-profit entity set up to commercialize any of their discoveries that could be turned into patented drugs. The charitable entities got the majority of the stock in the for-profit Cytokine Networks, while the researchers got most of the rest. Picower effectively controlled Cytokine Networks because he held sway over the boards of the charities that owned most of it...