The not so innocent market maker
Madoff's U.K. Business 'Played Significant Role' in Operation
MARCH 27, 2009, 10:48 A.M. ET
By CASSELL BRYAN-LOW
online.wsj.com
LONDON -- U.K. authorities investigating Bernard Madoff's massive Ponzi scheme believe criminal offences have been committed by people other than the New York financier and expect to start filing charges within months, according to investigators.
In addition, Mr. Madoff's U.K. operations "played a significant role in the operation" of Mr. Madoff's scheme, said Glyn Powell, a case controller at U.K.'s Serious Fraud Office, which opened a criminal investigation into Mr. Madoff's U.K. business earlier this year.
The SFO also said Ruth Madoff received two million of dollars in payments from Mr. Madoff's U.K. business in late November, just weeks before he was arrested. Attorneys for each of Ruth Madoff and Bernard Madoff didn't return requests for comment.
Mr. Madoff was arrested on Dec. 11. Earlier this month, Mr. Madoff pleaded guilty to masterminding a scheme that caused losses of tens of billions of dollars for investors. No one else in his family has been charged with wrongdoing.
U.K. authorities are focusing, among other things, on significant amounts of money that went back and forth between Mr. Madoff's trading operations in the U.S. and the U.K. outfit, called Madoff Securities International Ltd.
During 2008, for instance, £698 million, or about $1 billion, were transferred to the U.K. outfit's principal bank account from Mr. Madoff's U.S. trading operations, Bernard L. Madoff Investment Securities LLC. And £1.1 billion was transferred back across the Atlantic that year.
The U.K. business was "a cog in the giant washing machine" of the scheme, Mr. Powell said.
The U.S. government, in criminal charges filed in federal court earlier this month, said Mr. Madoff used the London operation to launder client money. He carried out the fraud, authorities said, by transferring client money from the investment-advisory business in New York to London and then back to the U.S. to support the U.S. trading operation of Bernard L. Madoff Investment Securities LLC.
Starting as early as 2002, Mr. Madoff "caused more than $250 million" of advisory client money to be directed through wire transfers to accounts held by the London operation, according to authorities.
Mr. Madoff also used the U.K. operations to buy and maintain property and services for his personal benefit and for family members and associates, authorities said.
Write to Cassell Bryan-Low at cassell.bryan-low@wsj.com
online.wsj.com |
