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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (121116)	3/2/2010 9:54:46 AM
From: Pogeu Mahone	Read Replies (1) \| Respond to of 132070

Hunting fraud beyond Madoff Whistle-blower says SEC still falling short By Todd Wallack, Globe Staff \| March 2, 2010 Harry Markopolos, the Bay State whistle-blower who repeatedly and unsuccessfully warned the Securities and Exchange Commission about Bernard Madoff’s massive Ponzi scheme, says he and his investigative team have uncovered a raft of new multibillion-dollar frauds. “I have many Medicare fraud and pension fraud cases’’ involving billions of dollars, the 53-year-old Whitman resident said in an interview yesterday. Markopolos was promoting his book about the Madoff case, “No One Would Listen: A True Financial Thriller,’’ scheduled to be released today. In the first new case to become public, the independent financial investigator said it was his team that uncovered alleged fraud related to $35 billion in currency trades made by Boston’s State Street Corp. for California’s two largest pension systems. Markopolos, who said he has a network of tipsters who alerted him to the scheme, alleged that State Street falsely reported receiving the worst possible prices for currency trades on behalf of the pension funds, and pocketed the difference. The findings prompted the State of California to sue State Street last fall to try to recoup $200 million in potential overcharges and penalties. But Markopolos said other related suits are still under seal in several courts. “What you’ve seen is the tip of the iceberg,’’ Markopolos said. “There are tens of millions of American victims to this scheme. This is a very big scheme.’’ State Street declined to comment on Markopolos’s assertions, but has vowed to fight the California lawsuit and denied any wrongdoing in the case. Markopolos, who tried for more than eight years to persuade the SEC to investigate Madoff, gained international fame after the Ponzi scheme collapsed. He told Congress that he had sent a list of 30 red flags about Madoff’s investments to the SEC, but the agency still refused to take action. But in addition to chronicling his efforts to expose Madoff’s pyramid fraud, Markopolos spends much of the book talking about how he feared for his life. He says he began carrying a revolver, he upgraded his home alarm system, and he started changing the route he took home. “I never drove more than a couple of blocks without checking continually in my rearview mirror,’’ he wrote. And if Madoff ever contacted him, Markopolos said, he planned to strike first. “I was going to drive down to New York and take him out. . . . In that situation, I felt I had no other options.’’ Markopolos told the Globe he was never threatened by Madoff or his aides because he managed to keep his efforts to alert the government secret. But even in hindsight, he doesn’t believe he overreacted. “I doubt that anyone with half a brain would see these precautions as unwise.’’ Markopolos, who served in the Army Reserve, also fretted the SEC might stage a raid on his home to destroy any evidence that he had tipped off the agency about the Madoff fraud. “I loaded a 12-gauge pump shotgun with double-ought buckshot, attached six more rounds to the stock, and draped a bandolier of 20 more rounds on top of my locked gun cabinet,’’ Markopolos wrote. “Next, I got out my old army gas mask in case they came in using tear gas. If an SEC raid team showed up, I only had to scare them or slow them down enough’’ before the Whitman police would arrive. An SEC spokesman declined to comment on Markopolos’s fears. However, as a civil agency, the SEC does not typically have the authority to conduct raids. Madoff’s scheme collapsed in December 2008, and he is now serving a 150-year sentence in federal prison. Markopolos said he no longer needs to carry a gun or fear for his life. “This case was exceptionally dangerous,’’ Markopolos said. “I would never do another organized crime case again. It wasn’t worth it.’’ But Markopolos, who has already begun to make public appearances to promote his book, said he has little confidence the SEC will catch the next Madoff. He said the states have been far more aggressive than the federal government in prosecuting securities fraud, and the SEC has done little to fire the people who missed the Madoff case. “There’s no accountability,’’ Markopolos said. “They could care less about protecting investors.’’ Markopolos said he never earned a penny from his investigation into Madoff (other than any money he earns from his book). But he hopes to earn whistle-blower fees from his discoveries in other cases. He said another case could be announced as early as this year, but the timing is hard to predict. “The wheels of justice turn slowly, when they turn at all,’’ Markopolos said. Todd Wallack can be reached at twallack@globe.com. © Copyright 2010 The New York Times Company

To: Knighty Tin who wrote (121116)	3/2/2010 9:56:21 AM
From: Pogeu Mahone	Respond to of 132070

Hunting fraud beyond Madoff Whistle-blower says SEC still falling short By Todd Wallack, Globe Staff \| March 2, 2010 Harry Markopolos, the Bay State whistle-blower who repeatedly and unsuccessfully warned the Securities and Exchange Commission about Bernard Madoff’s massive Ponzi scheme, says he and his investigative team have uncovered a raft of new multibillion-dollar frauds. “I have many Medicare fraud and pension fraud cases’’ involving billions of dollars, the 53-year-old Whitman resident said in an interview yesterday. Markopolos was promoting his book about the Madoff case, “No One Would Listen: A True Financial Thriller,’’ scheduled to be released today. In the first new case to become public, the independent financial investigator said it was his team that uncovered alleged fraud related to $35 billion in currency trades made by Boston’s State Street Corp. for California’s two largest pension systems. Markopolos, who said he has a network of tipsters who alerted him to the scheme, alleged that State Street falsely reported receiving the worst possible prices for currency trades on behalf of the pension funds, and pocketed the difference. The findings prompted the State of California to sue State Street last fall to try to recoup $200 million in potential overcharges and penalties. But Markopolos said other related suits are still under seal in several courts. “What you’ve seen is the tip of the iceberg,’’ Markopolos said. “There are tens of millions of American victims to this scheme. This is a very big scheme.’’ State Street declined to comment on Markopolos’s assertions, but has vowed to fight the California lawsuit and denied any wrongdoing in the case. Markopolos, who tried for more than eight years to persuade the SEC to investigate Madoff, gained international fame after the Ponzi scheme collapsed. He told Congress that he had sent a list of 30 red flags about Madoff’s investments to the SEC, but the agency still refused to take action. But in addition to chronicling his efforts to expose Madoff’s pyramid fraud, Markopolos spends much of the book talking about how he feared for his life. He says he began carrying a revolver, he upgraded his home alarm system, and he started changing the route he took home. “I never drove more than a couple of blocks without checking continually in my rearview mirror,’’ he wrote. And if Madoff ever contacted him, Markopolos said, he planned to strike first. “I was going to drive down to New York and take him out. . . . In that situation, I felt I had no other options.’’ Markopolos told the Globe he was never threatened by Madoff or his aides because he managed to keep his efforts to alert the government secret. But even in hindsight, he doesn’t believe he overreacted. “I doubt that anyone with half a brain would see these precautions as unwise.’’ Markopolos, who served in the Army Reserve, also fretted the SEC might stage a raid on his home to destroy any evidence that he had tipped off the agency about the Madoff fraud. “I loaded a 12-gauge pump shotgun with double-ought buckshot, attached six more rounds to the stock, and draped a bandolier of 20 more rounds on top of my locked gun cabinet,’’ Markopolos wrote. “Next, I got out my old army gas mask in case they came in using tear gas. If an SEC raid team showed up, I only had to scare them or slow them down enough’’ before the Whitman police would arrive. An SEC spokesman declined to comment on Markopolos’s fears. However, as a civil agency, the SEC does not typically have the authority to conduct raids. Madoff’s scheme collapsed in December 2008, and he is now serving a 150-year sentence in federal prison. Markopolos said he no longer needs to carry a gun or fear for his life. “This case was exceptionally dangerous,’’ Markopolos said. “I would never do another organized crime case again. It wasn’t worth it.’’ But Markopolos, who has already begun to make public appearances to promote his book, said he has little confidence the SEC will catch the next Madoff. He said the states have been far more aggressive than the federal government in prosecuting securities fraud, and the SEC has done little to fire the people who missed the Madoff case. “There’s no accountability,’’ Markopolos said. “They could care less about protecting investors.’’ Markopolos said he never earned a penny from his investigation into Madoff (other than any money he earns from his book). But he hopes to earn whistle-blower fees from his discoveries in other cases. He said another case could be announced as early as this year, but the timing is hard to predict. “The wheels of justice turn slowly, when they turn at all,’’ Markopolos said. Todd Wallack can be reached at twallack@globe.com. © Copyright 2010 The New York Times Company