In 2005, Patrick Byrne, the CEO of Overstock.com and future Deep Capture investigative reporter, began a public crusade against illegal naked short selling (hedge funds and brokers creating phantom stock to manipulate stock prices down). He said, over and over, that the crime was destroying public companies and had the potential to trigger a systemic meltdown of our financial markets.
Soon after, I began to investigate a network of short sellers, journalists, and miscreants. I concluded that many of the people in this network were connected to two famous criminals – “junk bond king” Michael Milken and his associate, Ivan Boesky. I also began taking a close look at the Mafia’s involvement in naked short selling.
In my last installment (click here to read), I described some of the strange occurrences that attended this investigation. Where the story left off, I’d recently been threatened in a bookstore, and then ambushed by three thugs who told me to stay away from this story. My unwitting employer had been bribed by short sellers, Patrick had been told by a U.S. Senator that his life was in danger, and a Russian matryoshka doll had appeared on the desk of an offshore businessman.
Inside this matryoshka doll was a slip of paper marked with the letter “F”…
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Soon after receiving the matryoshka doll, the offshore businessman invited Patrick Byrne to a greasy spoon diner in Long Island. Over the previous year, the businessman had provided Patrick with some information about the naked short selling scam, and the hope was that he might have something more to say.
But that day at the diner, all he had was a message.
“I’ll make this quick,” the businessman said, with two other witnesses present. “I have a message for you from Russia. The message is, ‘We are about to kill you. We are about to kill you.’ Patrick, they are going to kill you. If you do not stop this crusade [against naked short selling], they will kill you. Normally they’d have already hurt someone close to you as a warning, but you’re so weird, they don’t know how you’d react.”
In a later conversation with a colleague of Patrick’s the businessman said [verbatim]: “These things don’t happen to me anymore. I mean, I’ve been out of that world [the world of Mafia stock manipulation] for a dozen years or more. These…there are defined signals here that lead me to believe that they [the Mafia] have been disturbed. The only way they coulda been disturbed is if they own Rocker or if he is using them for leverage.”
Rocker. That’s David Rocker.
At the time, David Rocker was a “prominent” hedge fund manager specialized in short selling (betting that stock prices will fall). It was also the case that Rocker had spent the last couple decades insinuating to people on Wall Street that he was somehow tied to the Mob.
But Rocker was probably full of it. He didn’t have ties to the Mob. Perhaps he merely believed that his insinuations lent him a certain cachet.
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From 1973 to 1981, Rocker was a general partner in a short selling hedge fund managed by Michael Steinhardt, who is one of Wall Street’s most “prominent” investors, regularly hailed by The Wall Street Journal and CNBC as a genius and a font of wisdom.
Some years ago, Steinhardt belatedly acknowledged that he is the son of Sol “Red” Steinhardt, who was once a major player in the Genovese Mafia organization. Steinhardt, Sr. spent several years in Sing-Sing prison after a New York City prosecutor described him as the “biggest Mafia fence in America.”
Incidentally, experts concur that the Genovese Mafia family brought the Russian Mob to America.
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The largest investors in Steinhardt Jr.’s first hedge fund were associates of the Genovese Mafia (whose investments came in large sacks of cash), Marty Peretz (future founder, with Jim Cramer, of TheStreet.com), Marc Rich (future fugitive charged with tax evasion and illegal trading with Iran and Libya), and Ivan Boesky (later imprisoned on multiple counts, most of them involving stock manipulation schemes orchestrated with “junk bond king” Michael Milken).
By 1991, Steinhardt owned another hedge fund — JGM Management – with a “prominent investor” named James Marquez. The star employee at JGM was “prominent investor” Samuel Israel III.
A few years later, Israel and Marquez founded the Bayou Group, one of the biggest hedge fund frauds in history. A significant part of the Bayou fraud involved Israel “feeding” his investors’ money into a Ponzi scheme run by Robert Booth Nichols, who has been targeted by authorities as a business associate of the Genovese Mafia family.
When Israel was sentenced to prison last year, he briefly disappeared. His car was found on a bridge. Scrawled in the dust on the hood was a note: “Suicide is Painless.”
Authorities arrested Israel’s girlfriend, whom they suspected of harboring a fugitive. Shortly after, Israel rode a red motor scooter to a Boston police station and turned himself in. Apparently, he was not dead. He had tried to fool us.
Meanwhile, Israel had filed a lawsuit against Nichols, alleging that Nichols had ripped him off. Apparently, Israel (who could not be reached for this article) would like us to believe that he is not tied to Nichols or the Genovese Mafia.
Nonetheless, Israel has a certain cachet. So do Steinhardt and James Marquez.
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In the 1990s, Steinhardt founded another hedge fund, Steinhardt Partners. The co-founder and head trader of Steinhardt Partners was a “prominent investor” named John Lattanzio.
The limited public information about Lattanzio concerns a Russian prostitute.
Apparently, Lattanzio proposed marriage to the prostitute and gave her a diamond ring. Alas, the couple separated, and Lattanzio asked for his ring back. After all, it had cost him $289,275.00.
But the prostitute seemed to believe that the ring was payment for services rendered. The dispute ended up in court, where the prostitute testified that Lattanzio had told her that he had ties to the Mafia.
Yes, said the prostitute, Lattanzio (Steinhardt Partners’ co-founder and head trader) had big-time Mafia connections, and he “would not hesitate to use them to harm me.”
From what I know of Russian strumpets, there is at least one area where they cannot be trusted – and that is where it concerns their love life. So perhaps Lattanzio had his heart broken. Perhaps, in the heat of passion, he said some crazy stuff about the Mafia to make himself seem dangerous. If that is the case, I send Mr. Lattanzio my condolences.
Indeed, I would enjoy meeting him. He has a certain cachet.
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Rocker left Steinhardt’s hedge fund in 1981 and went to work for an investment management firm called Century Capital Associates.
Information on this firm is limited, but it seems to have been largely owned in the 1980s by the Belzberg brothers — William, Sam and Hymie.
The Belzbergs were among Michael Milken’s closest cronies (family member Mark Belzberg was in fact implicated by the SEC in Milken’s stock manipulation schemes). They were at the inner core of the Milken machine – buying and selling the junk bonds of other Milken cronies. Often, the Belzbergs collaborated with Milken to blackmail, seize, or destroy public companies. .
In the late 1980s, the Belzbergs announced that they were going to take over Crazy Eddie, which was then a famous home electronics retail chain. The Belzbergs joined forces with Crazy Eddie’s founder, Eddie Antar, and the company’s chief financial officer, Sam Antar, in a supposed effort to take the company private.
This is a story for another time, but for now it suffices to say that Crazy Eddie was a massive fraud, the Belzbergs (and Milken) likely knew this already, and when the company was raided by the FBI a few months later, it emerged that Sam Antar had been feeding information to both the FBI and a lawyer, Howard Sirota, who was preparing to sue the company.
The Belzberg’s did not buy Crazy Eddie. Instead, just before the FBI arrived, the company was sold to another investor, Victor Palmieri. Robert A. Marmon, who was hired by Palmieri to run Crazy Eddie, told me that he arrived to find that the company’s top employees – the only people who had had direct access to the Antars – were all burly, armed thugs who claimed to be former employees of the Mossad, Israel’s secret intelligence agency.
It was Marmon’s job to fire the Antars’ corporate goons. “I’ve never been so scared in my life,” he said. “There weren’t any explicit death threats. They just stared you down, so you got the message.”
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Sam Antar is a convicted felon, but he never went to prison because he testified against his cousin, Eddie Antar, in return for house arrest. Now he is paid by short sellers with ties to David Rocker and associates of Michael Milken. The assignment to which he devotes the majority of his time is to use the Internet to harass and smear the reputations of Deep Capture founder Patrick Byrne and his colleagues.
At one point, Antar threatened the young children of Deep Capture reporter Judd Bagley, posting their names, ages, and address on the Internet. As I described in my last installment, Antar has made what I can only interpret to be veiled references to two seminal events in my life – the time I was ambushed and punched in the eye by three thugs, and the day that a goon in a bookstore threatened my close relative.
When he is not harassing us, Antar helps Howard Sirota (the attorney who sued Crazy Eddie) file bogus class action lawsuits against companies targeted by short sellers. A recent court case also describes Antar delivering $250,000 in cash to a man named Barry Minkow
In the 1980s, Minkow built a carpet cleaning and insurance restoration company called ZZZZ Best, with the bulk of his finance coming from Michael Milken, and other funds coming from associates of the Genovese organized crime family.
ZZZZ Best was a massive fraud that manufactured false restoration claims – some of them on Las Vegas casinos that had been financed by Michael Milken and investors tied to the Genovese organized crime family.
Minkow spent some time in prison. Now he runs an outfit called the Fraud Discovery Institute out of the Community Bible Church in San Diego, where he is a preacher. The Fraud Discovery Unit is in the business of publishing negative information about public companies targeted by Howard Sirota and short sellers tied to David Rocker, Michael Steinhardt, and associates of Michael Milken.
In one of Sam Antar’s famous Internet messages (he signs them, “Sam Antar, Convicted Felon”), he warned that we at Deep Capture were taking chances by writing about the Mafia connections of Barry Minkow, whom Antar described as his “friend.”
“You have awakened a sleeping giant,” Antar wrote.
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In addition to their involvement with Crazy Eddie and David Rocker’s operation, the Belzberg brothers – William, Sam, and Hymie – also tried in the 1980s to take over a investment services concern called the Bache Group. But executives of the Bache Group did not want the Belzbergs to seize their company.
According to the executives, the Belzbergs had ties to the Mafia. The executives went public with their allegations, citing, among other things, a U.S. Customs report that described the Belzbergs cavorting with some Genovese mafiosi in Acapulco.
Fortune magazine reported that these allegations were “unsubstantiated.”
But the Belzbergs have a certain cachet
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The Belzbergs were also the largest providers of capital to John Mulheren, a “prominent investor” who was famous in the 1980s for the arbitrage operation that he ran out of Spear Leeds & Kellogg, a broker-dealer and notorious naked short seller that was later merged into Goldman Sachs Execution and Clearing (which currently employs Elliot Faivinov, a Russian man who in 2006 was, for reasons of his own, receiving copies of the phone records of a woman who was then Deep Capture reporter Patrick Byrne’s girlfriend).
The Department of Justice alleged that Mulheren routinely engaged in stock manipulation schemes with Ivan Boesky, targeting companies financed by Milken. In 1987, when Boesky was indicted, and the government began to investigate Milken, Mulheren announced that he was going to murder Boesky.
Depending on the story, Mulheren either forgot to take his psychiatric medication, or he was worried that Boesky was going to squeal. Either way, he was arrested on the way to Boesky’s house. In Mulheren’s car, police found a 9-millimeter pistol, a .357 Magnum, a 12-gauge pistol-grip shotgun, a .233-caliber Israeli Galil assault rifle, and 300 rounds of ammunition.
It is a common misperception that Boesky’s testimony led to the 98-count indictment of Michael Milken. Considering the scope of business the two criminals did together, Boesky actually provided very little information to the government. He told prosecutors that he was afraid that he might be killed. On several occasions he told prosecutors that he might be killed by Milken’s “friends in Vegas.”
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Far more important to the government’s case against Milken was evidence that it obtained when 50 armed troopers stormed the offices of a hedge fund called Princeton-Newport. The founder of this hedge fund, Edward Thorp, once partnered with the Genovese organized crime family to develop a system for cheating Las Vegas casinos. He wrote a seminal book on counting cards in black jack, and soon after, he was a critical – perhaps the most critical – figure in the Milken operation.
The base of Milken’s operation was the high-yield debt department of Drexel Burnham Lambert in Beverly Hills. From there, he underwrote and sold billions upon billions of dollars worth of junk bonds. Hence the moniker, “the junk bond king.”
But most observers believe that Milken derived a greater part of his fortune from a web of private partnerships and personal brokerages that traded, and often manipulated, not just the debt, but also the stock of public companies. Most profitable of all Milken’s businesses were two Chicago-based brokerages – Belvedere Securities and EGM partners – that he co-owned with the Genovese Mafia card-counter Edward Thorp.
In 2006, Thorp’s son, Jeffrey, was charged by the SEC with destroying more than 20 companies in a scheme that involved unbridled naked short selling (millions upon millions of phantom shares sold into the market). Jeffrey Thorp also collaborated closely in short selling schemes with Anthony Elgindy, a notorious phantom stock peddler who is now serving an 11 year prison sentence for stock manipulation, extortion, and bribing FBI agents.
Elgindy, like Thorp’s father, is tied to the Genovese organized crime family.
When Elgindy appeared in court for sentencing, the judge noticed that Elgindy was missing the tip of one finger. Elgindy could not provide a straight answer as to what had happened, but a source close to the Elgindy investigation claims that Elgindy was forced by Russian mobsters to saw off his own finger as a warning not to squeal on his partners in crime.
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When delivering the death threat to Patrick Byrne, the offshore businessman mentioned David Rocker, and as we now know, Rocker was a general partner in Michael Steinhardt’s first hedge fund — largely capitalized by the Genovese Mafia and Ivan Boesky. We also know that Rocker later worked for Century Capital, largely owned by the Belzbergs – William, Sam, and Hymie – who might or might not have been cavorting with Genovese mafiosi in Acapulco, but were certainly the largest funders of John Mulheren.
After getting caught on his way to murder Ivan Boesky, Mulheren went to jail, where he spent most of his time in consultation with Anthony “Fat Tony” Salerno, a Genovese Mafia capo who had recently begun a 100 year prison sentence.
Upon his release, Mulheren (whose convictions were later reversed on appeal) went into business with a “prominent investor” named Israel Englander. Soon after that, Mulheren died (apparently of a heart attack), but Englander continued to manage Millennium Partners, a “prominent” short selling hedge fund whose major investors are the Belzbergs – William, Sam, and Hymie.
By this time, David Rocker had left the Belzberg’s Century Capital to start his own hedge fund – Rocker Partners.
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Here I must skip ahead more than a decade: In 2004, Deep Capture reporter Patrick Byrne (pursuant to his day job of being CEO of Overstock.com) was on a Lehman Brothers-sponsored road show seeing dozens of hedge funds, attempting to sell a $120 million convertible bond in Overstock. When he sat down in Millennium’s offices, a man entered. His opening words were, “Millennium wants to take the entire $120 million of this offering. Of course, we’ll need a board seat to go with that.”
This would have given the hedge fund access to inside information about Overstock. And it would have given Millennium the ability to sell the company short without borrowing shares in the open market.
This is a common strategy employed by short sellers tied to Michael Milken or his associates. As I will show in future stories, many companies that agree to this arrangement are eventually destroyed or seriously wounded by naked short selling – hedge funds offloading phantom stock.
Overstock board member Gordon Macklin, the former chairman of Hambrecht & Quist, a straight-shooting investment bank, warned Patrick not to do the deal with Millennium.
Millennium, after all, had a certain cachet.
Patrick declined Millennium’s offer, and went ahead with the offering to a number of hedge funds.
A few months after Millennium’s offer to acquire the bonds, affiliated hedge fund managers, including David Rocker, began a short selling attack on Overstock.
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One hedge fund closely affiliated with David Rocker is SAC Capital, which is managed by Steven Cohen, and is said to account for more than 3 percent of all the trading on the New York Stock Exchange. BusinessWeek magazine has described Cohen as “The Most Powerful Trader on Wall Street.”
Some years ago, there was an article by Fortune magazine called “The Shabby Side of the Street.” This article did not mention Steve Cohen. It did not mention him because, by this time, Cohen was a “prominent investor.”
But while “The Shabby Side of the Street” does not mention Cohen, it is all about Gruntal & Co., which is where Cohen spent his formative years. Cohen was a proprietary trader for Gruntal in the 1980s and early 1990s – up until the day when he founded SAC Capital.
Gruntal, we can assume, is where Cohen developed his network and learned the tricks that made him the “most powerful trader on Wall Street.”
Fortune magazine interviewed a former Gruntal employee, who described the ambience there: “Gruntal was the Island of the Misfit Toys. But they didn’t care what was going on in our sick, dysfunctional office as long as we were making money. We had no manager, and it’s illegal not to supervise brokers. I remember doing cartwheels down the hall, drinking beer at my desk, smoking pot, having sex in the stairwell. Whatever!”
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The Fortune magazine article about Gruntal also failed to mention Michael Milken. It did not mention Milken because Milken was, by then, a “prominent philanthropist.” But Milken had been intimately involved with Gruntal, whose parent company, a financial services and insurance conglomerate called the Home Group, had been central to the Michael Milken empire.
As nearly every account of Michael Milken’s schemes will tell you, Milken worked with a select group of cronies (many of whom controlled large insurance and financial services conglomerates) to operate what amounted to a Ponzi scheme.
The cronies would sell junk bonds through Milken to raise finance. Then the cronies would use much of this finance to buy (from Milken) the junk bonds of other cronies in the group. The cronies and Milken would then trade the junk bonds among themselves, raising their prices incrementally as they passed them on to the next crony (a process known as “daisy-chaining”), before fobbing them off to little old ladies and dimwitted pension fund managers.
Until the scheme collapsed, Milken’s junk-bond merry-go-round generated enormous profits and seemingly unlimited finance for his select cronies. So the cronies could not only buy more junk bonds from Milken, but they could also use their billions to harass, destroy, or initiate hostile takeovers of public companies.
Meanwhile, Milken presided over a nationwide network of private partnerships (such as those he had with the Mafia card-counter Edward Thorp), arbitrage and short selling partnerships (such as Ivan Boesky’s criminal operation), short selling hedge funds (such as Michael Steinhardt’s Mafia-funded outfit), and brokerages that could help put public companies on the defensive.
Home Insurance was a key buyer and issuer of Milken junk bonds. It was the second largest unsecured creditor to Milken’s operation at Drexel. It also owned about $15 million worth of Ivan Boesky’s short selling and arbitrage outfit. Meanwhile, Home’s subsidiary, Gruntal & Co., employed traders who were on quite friendly terms with Milken and others in his network.
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Gruntal’s options department was founded by a man named Carl Icahn. After leaving Gruntal, Icahn formed Icahn & Co., receiving most of his finance from Michael Milken, but also a significant chunk of capital from a “prominent investor” named Zen Wolfson.
Since then, Wolfson has been involved with a number of Wall Street brokerages that are tied to the Genovese Mafia. One such brokerage is Pond Securities, which, in 2001, was implicated by the SEC in a massive naked short selling (phantom stock) fraud. Among the victims of Pond Securities were companies that had employed the services of Ladenburg Thalmann, an investment bank largely controlled by Carl Icahn.
In an upcoming story, I will tell you more about Ladenburg Thalmann’s role in the naked short selling scandal. I will tell you more about Pond Securities and its relationship with a man who remains a fugitive in Austria. And I will tell you more about Carl Icahn, who is not only one of the most “prominent investors” in America, but also a man with a certain cachet.
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Another employee of Gruntal – a fellow who sat next to Steve Cohen (later known as “the most powerful trader on the Street”) – was Stephen Feinberg, who had moved to Gruntal from Michael Milken’s operation at Drexel Burnham Lambert. Feinberg had been one of Milken’s most favored employees. Most likely, he moved to Gruntal (“the “shabby side of the Street,” as Fortune magazine described it) to reinforce the relationship between Gruntal and Milken’s nation-wide stock manipulation network.
Nowadays, Feinberg runs Cerberus Capital, one of the most powerful private equity firms in America. In an upcoming story, I will tell you how Cerberus loots the companies it seizes.
Its techniques have a certain cachet.
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Yet another “prominent investor” who sat on Steve Cohen’s trading floor at Gruntal was Samuel Israel III.
Israel left Gruntal to work for a hedge fund owned by Steinhardt (the son of the “biggest Mafia fence in America”). As you will recall, Israel later wrote “Suicide is Painless” on his car and briefly disappeared after being sentenced for masterminding one of the largest hedge fund frauds in history – a fraud that Israel ran with help from a co-founder of Steinhardt’s hedge fund and another fellow connected to the Genovese Mafia.
Also on Steve Cohen’s trading floor at Gruntal was Maurice A. Gross, whose biggest client was Thomas Gambino, a prominent member of the Gambino Mafia family. This was in the days when the Gambinos and the Genovese still collaborated on Wall Street.
Gross later left Gruntal, and in 1997, he and a Pakistani fellow named Mohammad Ali Khan tried to steal the Gambinos’ money.
Fortunately, Elliot Spitzer intervened. At the time, Spitzer was New York’s attorney general. Throughout his political career, Spitzer received by far the greatest percentage of his campaign funding from short sellers (such as Jim Chanos, who provided a rent-free beach house to the hooker who later forced Spitzer to resign as governor) who are closely tied to Steve Cohen and SAC Capital.
Spitzer forced the former Gruntal broker to give the Gambinos their money back. There is no evidence, however, that Spitzer was concerned that New York’s second largest organized crime family was running money through a brokerage owned by cronies of Michael Milken and Ivan Boesky.
In 1996, Gruntal was charged with embezzling millions of dollars. By then, Steve Cohen had left to begin his career as the “most powerful trader on the Street.”
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So in 2006, I was investigating Steve Cohen’s SAC Capital, David Rocker, Michael Steinhardt and their network of miscreants. I was also investigating “prominent” journalists (at The Wall Street Journal, The New York Times, CNBC and other major news organizations) who had unusual relationships with this network and who were going to extraordinary lengths to cover up the naked short selling (phantom stock) scandal.
That’s when three guys in Armani suits saddled up to me in a quiet bar. As you will recall from my last installment, one of the Armanis introduced himself to me as a former Boesky employee, and told me a story about a fellow who got his brains blown out after “peeking” into the ladies underwear department at Saks Fifth Avenue.
Steve Cohen’s SAC Capital is known colloquially as “Sak.” I do not know for certain that Armani was telling me I shouldn’t be “peeking” at Cohen’s dirty underwear. It was a strange encounter, to say the least.
But if you doubt that journalists sometimes receive such threats, consider the case of Los Angeles Times reporter Anita Busch. One day after work, Busch found, in the front seat of her car, a dead fish and a rose. In the windshield of her car, there was bullet hole and a note that said, simply, “Stop!”
Later, the LA Times reporter was nearly killed when two men in a black Mercedes tried to run her over.
All of this was the handiwork of Anthony Pellicano, a former soldier in the Genovese Mafia organization who had found employment as a hired-thug and private investigator. Most of Pellicano’s clients had been Hollywood actors like Steven Seagal (who has been reported by some news organizations to have ties to the Mob, though I have not confirmed those reports) and various billionaires, a significant number of whom had ties to Michael Milken.
When Pellicano put the dead fish and the bullet hole in the reporter’s car, he was working for Michael Ovitz, the Hollywood mogul. Busch and the LA Times were investigating the business dealings of Ovitz, and Ovitz apparently hired the former Genovese Mafia soldier to stop the story in its tracks.
Ovitz, as you may know, is one of Michael Milken’s closest friends. They were high school classmates. In later years, Milken and Ovitz did a lot of business together.
While Pellicano was threatening an L.A. Times reporter, he was also employed by Adam Sender, who runs a hedge fund called Exis Capital. Sender is a former employee of Steve Cohen at SAC Capital. Steve Cohen — the “most powerful trader on the Street” — provided Sender with most of his start-up capital. Exis and Sender are considered by most everyone on Wall Street to be essentially subsidiaries of SAC (a.k.a. “Sak”).
Apparently, Sender had some kind of dispute with a business partner, so he called Pellicano, the former Genovese Mafia soldier. In a conversation that was recorded by the FBI, Sender said to Pellicano: “You have 100% free reign to do whatever you feel will make this cocksucker as unhappy as possible…I’d like to make the fucking asshole as uncomfortable as possible…I’m going to continue the lawsuit until doomsday… when the time is right I’m going to fix him.”
You can listen to the full conversation here.
In a later conversation, Pellicano allegedly offered to have Sender’s business partner disappear. The former Genovese soldier said he’d make his move while the business partner was driving to Los Angeles from Las Vegas. He’d force the business partner off the road. Then Pellicano would kill the business partner and bury him in the Nevada desert. Nobody would know a thing.
In court, Sender testified that he turned down Pellicano’s murder-for-hire offer. But Pellicano was convicted for multiple crimes – such as offering to have a man buried in the Nevada desert and putting a dead fish, a rose, and bullet hole in the car of a journalist investigating Michael Milken’s best friend from high school.
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I do not know whether any merit can be given to the offshore businessman’s speculation that Rocker might be “owned” by the Mafia. I do not know whether Rocker had anything to do with the message that the Russian Mafia was going to kill Patrick Byrne.
I do know, however, that in a later phone conversation, the offshore businessman explained how the death threat had been conveyed to him. He said he returned home one night and his wife told him there was a package on his desk. “And there was a beautiful little box, and inside was a matryoshka.”
“And I opened up the…matryoshka, and inside is an `F’ with a cross on it — which is from Felix.”
The businessman said he contacted Felix. And Felix said, “tell [Patrick]….we’re going to fucking take it private.”
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In 1998, Felix – that’s Felix Sater – forgot to pay the rent on a locker at the Manhattan Mini Storage in Soho. As a result, police found inside this locker two pistols, a shotgun, and a gym bag stuffed with documents outlining various money laundering and stock manipulation schemes orchestrated by Felix Sater and his partners.
Felix is a Russian immigrant said by authorities to have ties to both the Russian Mafia and the Genovese organized crime family.
In 1991, Felix stabbed a stock broker in the face with a broken stem of a wine glass.
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After reviewing the contents of Felix’s locker, the FBI launched a sweeping investigation that culminated, in the summer of 2000, with the bureau’s famous “Operation Uptick” – sometimes referred to as the “Mob on Wall Street” operation. More than 100 stock brokers and investors allegedly tied to the Mafia were arrested – the biggest securities bust in FBI history.
Among those arrested in the “Mob on Wall Street” operation were a number of people tied to Michael Milken or his closest cronies. One of them was Gene Phillips.
In the 1980s, Phillips ran a company called Southmark, which was at the center of the Milken Ponzi. Southmark was, in fact, the single largest real estate conglomerate ever financed by Milken. But it didn’t just buy real estate. In only one of many transactions, Milken delivered over $400 million in junk bond finance to Phillips, and Phillips used every penny of that finance to buy (from Milken) the junk bonds of other Milken cronies.
The “Mob on Wall Street” case alleged that Phillips engaged in stock manipulation schemes with a coterie of miscreants who were tied to the Genovese organized crime family. Ultimately, Phillips was acquitted.
But even before he was arrested, Phillips had a certain cachet.
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Felix Sater (the man who allegedly sent the matryoshka doll) was ultimately named as an “unindicted co-conspirator” in a Mafia-run stock fraud. One of his friends co-authored a book, “The Scorpion and the Frog,” which suggests that Sater (whom the author of the book gives a pseudonym, “Lex Tersa”) cut a deal allowing him to avoid prosecution if he helped the CIA set up a phony arms deal with Osama Bin Laden. Anything is possible, I suppose.
At any rate, Sater is now the (silent) proprietor of the Bayrock Group, a real estate investment company. The Bayrock Group has eleven partners. All are of interest, but let’s focus on two of them.
One is The Sapir Organization, which is an organization run by a Russian immigrant named Tamir Sapir. A lawyer for The Sapir Organization said the organization would answer no questions because the organization is “very, very private.” So information about Sapir’s background is spotty.
Sapir has stated publicly that he once owned a home electronics store that catered to Russian KGB officials living in New York. The name of the store remains a mystery. All Sapir has said is that he was “the Crazy Eddie of Russia” – a playful reference to Sam Antar’s electronics company (i.e., the massive fraud that the Antars were going to take private with those Milken cronies, the Belzbergs – Walter, Sam, and Hymie).
After electronics, Sapir began trading oil. Then he struck it big in real estate. Now, he is believed to be a billionaire.
He might also be a Russian Mafia boss. Journalists have danced around this issue. Sapir himself has stated to The New York Times that “I am not Mob.” But he once had Genovese Mafia associates running his real estate empire. So if Sapir is not a Russian Mafia boss, he is at least a Russian boss of Mafia employees.
By way of example: The man who formerly ran The Sapir Organization’s real estate portfolio is named Frederick J. Contini. In addition to being associated with the Genovese Mafia clan, Contini once entered a secret plea to racketeering.
Also, Contini once stabbed a man in the face with the broken stem of a wine glass.
He said it was just a bar fight.
This was some months after Felix Sater stabbed a man in the face with the broken stem of a wine glass.
Felix said it was just a bar fight, too.
* * * * * * * *
The second important partner of Felix Sater’s Bayrock Group is Apollo Real Estate Advisors, which is part of the empire controlled by a famous billionaire – Leon Black.
If Michael Milken were to name the ten people who are closest to him, Leon Black would surely be one of them. The two men have known each other since at least 1975, when “prominent investor” Carl Lindner, who was one of Milken’s key junk bond cronies, was acquiring shares in United Brands, formerly known as United Fruit, a company that has been accused of everything from bribing heads of state to funneling money to Latin American drug gangs.
Lindner eventually gained control over the company, but not before Eli Black — United Brands’ CEO and the father of Leon Black — crashed through a thick plate-glass window on the 44th floor of the Pan Am building, and plunged to his death.
They said Black broke through the plate glass window with his briefcase.
They said it was suicide.
* * * * * * * *
Some years after his father crashed through the window, Leon Black was heading up mergers and acquisitions at Drexel Burnham Lambert, home base of Milken’s junk bond operation. Black was Milken’s most ardent ally at Drexel. After Milken was indicted, Black rallied to Milken’s defense. It was Black, more than anyone, who prevented Drexel from firing Milken. And Black has remained obstinately loyal to the criminal Milken ever since.
After Milken went to prison, Black founded the Apollo Group, an investment partnership that received most of its initial funding from a French aristocrat named Rene Thierry Magon de La Villehuchet.
Among Black’s first moves as an independent “prominent investor” was to launch a takeover bid for Executive Life, a bankrupt insurance and financial services conglomerate.
The Black group won the bid after a fierce battle with a group of competing bidders, led by Jack Byrne, who was then the chairman of Fireman’s Fund, a major insurance company.
Later, though, it emerged that Black’s takeover of Executive Life had been illegal because he had secretly been fronting for certain French investors, including Monsieur Rene Thierry de La Villehuchet. Some of the French investors had illegally parked stock with Black to hide their involvement (“parking stock” being one of the favorite techniques of the Milken-Boesky-Thorp crew, and a recurrent theme in the 98-count indictment that sent Milken to jail).
There were indictments (though, somehow, not of Black or Monsieur Rene Thierry de La Villehuchet). After the indictments, Jack Byrne, recognizing that he’d been cheated out of a deal, sued Black and won an $80 million dollar judgment, some $30 million of which was ultimately paid to Jack Byrne’s company.
Jack Byrne, of course, is the father of Patrick Byrne, who a few years later received a vicious death threat, allegedly by way of a Russian matryoshka doll delivered by Leon Black’s Mafia business partner Felix Sater.
* * * * * * * *
None of which is to suggest that Black or Michael Milken had anything to do with the matryoshka doll or the death threat. Milken is now a “prominent philanthropist,” and Black is a “prominent investor.” But if anybody sees Mr. Black, please ask him if he thinks his Mafia friends could help us get to the bottom of this.
(Neither Black nor Felix nor Milken return my calls).
* * * * * * * *
Executive Life, the company that Black’s group illegally purchased, was in bankruptcy because it had been transformed into a Ponzi scheme by Fred Carr, who is widely regarded to have been Michael Milken’s single most important junk bond crony.
Milken delivered billions of dollars in junk bond finance to Carr, and Carr used much of his Milken finance to buy (from Milken) junk bonds that had been issued by Gene Phillips, the Belzbergs, Carl Lindner, and few others in Milken’s close circle of cronies.
Prior to destroying Executive Life, Carr was tied to a mutual fund company called Investors Overseas Services. Carr was a “feeder” (somebody who raised money) for Investors Overseas Services, and at one point he announced that he was a major shareholder in the company and planned to take it over.
Another “feeder” to Investor Overseas Services (OIS) was John Pullman, a reputed associate of the Genovese organized crime family. At one point, Canadian police taped a conversation in which Anthony “Fat Tony” Salerno (the fellow whom John Mulheren befriended in prison after failing to assassinate Ivan Boesky) suggested that Pullman owed him money.
There was also Sylvain Ferdman. He couriered cash to IOS from clients in South America. Ferdman testified before a grand jury in New York that he had also been a courier for the Genovese organized crime family.
* * * * * * * *
No story about Michael Milken is complete without reference to a “prominent investor” named Meshulum Riklis. By most every account, Riklis was Milken’s first big client and his most important mentor – the man who taught Milken the art of junk bond Ponzis and stock manipulation.
Riklis, who was also known as the husband of Hollywood starlet Pia Zadora, began working with Milken not long after Riklis bought Schenley Distributors, a distillery, in a deal that was clouded by accusations of pay-offs to organized crime. Schenley retained as its major distributors one Joseph Fusco, reputed to be a former member of Al Capone’s gang in Chicago, and Joseph Linsey, a colleague of the Genovese family mobster Meyer Lansky (who worked closely with Michael Steinhardt’s father).
Riklis’s next move was to buy the Riviera casino in Las Vegas. Reportedly, he was hand-picked for this deal by the sellers, a group of Mafia-affiliated characters led by Morris Shenker, who was the personal attorney, close confidant, and business partner of Jimmy Hoffa, the Mafia-connected president of the Teamsters.
One day, Hoffa had a meeting scheduled with Anthony “Tony Jack” Giacalone and Anthony “Tony Pro” Provenzano, two capos of the Genovese organized crime family. Hoffa disappeared on the way to the meeting and was never seen again.
By then, though, the Teamsters had become one of Milken’s most important customers –dependable buyers of junk bonds that Milken issued for select cronies – Riklis, Carr, Gene Phillips, Carl Lindner (who was acquiring United Brands when Leon Black’s father fell through a thick plate glass window), and just a few others.
* * * * * * * *
Through Riklis and the Teamsters, Milken built a solid clientele of Las Vegas casino operators, such as Carl Icahn, and related enterprises (such as the Genovese-financed ZZZZ Best carpet cleaning outfit).
One of Milken’s biggest clients was Steve Wynn, a “prominent investor” who received lots of Milken finance to open casinos and buy (from Milken) junk bonds issued by other Milken cronies – Lindner, Riklis, Gene Phillips, Icahn, and a just a few others (all of whom had a certain cachet – more on the others in upcoming stories).
Wynn is now widely credited with transforming Las Vegas into the kind of place where you can go with the kids.
Meanwhile, Milken describes Wynn as one of his closest friends.
In 1983, which is right around the time that Milken and Wynn began doing business together, the Criminal Investigation Department of London’s Scotland Yard produced a report stating that “the strong inference which can be drawn from the new intelligence is that Stephen Wynn…has been operating under the aegis of the Genovese [Mafia] family since he first went to Las Vegas in the 1960s…”
Scotland Yard determined that there was an especially strong relationship between Wynn’s father, Mike, and Genovese mobster Anthony “Fat Tony” Salerno. Around this time, the FBI caught “Fat Tony” on tape, in a conversation that suggested that the mobster had ties to the younger Wynn as well. Among other things, “Fat Tony” told his colleagues that they should try to get the younger Wynn to reign back his activities in Las Vegas. Wynn had become too conspicuous.
This was before “Fat Tony” entered into jail-cell consultations with John Mulheren, the Milken crony who had sought to murder Ivan Boesky. It was after “Fat Tony” was caught on tape describing his relationship with the “feeder” who worked with Milken crony Fred Carr on the Investors Overseas Services.
Wynn vigorously denies any connection to “Fat Tony” and the Mafia.
By the way, “Fat Tony” wore a fedora and usually had big Cuban cigar in his mouth. These people really do exist.
They have a certain cachet.
* * * * * * * *
Meshulum Riklis also denies having any connection to the Mafia.
But he does not deny that he at one point tried to buy Investors Overseas Services. This was right about the time that Milken-crony Fred Carr began buying up shares in IOS. It was also right about the time that Investors Overseas Services was found to be the biggest Ponzi fraud in history.
Soon after, Investors Overseas Services was handed over to a “prominent investor” named Robert Vesco, who looted it dry, and fled to Cuba.
* * * * * * * *
Investors Overseas Services was the biggest Ponzi scheme in history until last month, when Bernard Madoff’s Mafia-affiliated operation was revealed to be the new all-time biggest Ponzi scheme.
Investors Overseas Services was a straight-forward swindle. Bernard Madoff’s $50 billion Ponzi was more complicated, involving not just his fund management business, but also his brokerages.
Madoff’s brokerages engaged in naked short selling (offloading stock that had not been borrowed or purchased—phantom stock), likely on behalf of miscreant hedge funds looking to drive down prices. In fact, Madoff successfully lobbied the SEC to enact a rule that allowed market makers such as himself to engage in naked short selling. At the SEC, this rule was called “The Madoff Exception.”
Moreover, a source who has seen some of Madoff’s trading records says that Madoff filled buy orders for stock by naked short selling the stock to his customers’ accounts. So, perversely, significant buying volume through Madoff’s brokerages in a firm’s stock would generate yet more phantom shares, putting downward pressure on the price of that stock.
All of this naked short selling created massive liabilities (probably accounted for as “stock sold, and not yet delivered”). Those liabilities, plus the money that Madoff simply pocketed instead of buying or borrowing real stock, surely accounted for a large chunk of that $50 billion figure.
Last summer, naked short selling (phantom stock) burst into public view as an integral factor in the implosion of the U.S. financial system. In November 2008, former SEC Chairman Harvey Pitt, echoing the words of many other experts and officials, said, “Naked short selling is what’s causing a lot of the problems in the market.”
In other words, Madoff’s operation was not just the largest known swindle in history. It was also a phantom stock machine. And that makes it but one participant in a much bigger scandal — a crime that might have brought us to the brink of a second Great Depression.
* * * * * * * *
At any rate, historic achievements tend to have overlapping protagonists. So it was no surprise to learn that one of Madoff’s most important “feeders” was Fairfield Greenwich Group, part-owned by a “prominent investor” named Philip Taub. Philip’s father, Said Taub, a “prominent investor” from Europe, had been an important “feeder,” along with Michael Milken’s cronies and other people affiliated with the Genovese Mafia, for the Investors Overseas Services Ponzi.
Another Madoff “feeder” (and a partner with Madoff in a brokerage called Cohmad) was a “prominent investor” named Robert Jaffe. Previously, while working for E.F. Hutton, Jaffe ran money for the Anguilo brothers, the Boston dons of the Genovese organized crime family.
There was also Sonja Kohn, who was a “prominent” member of the Wall Street investment community before moving to Austria to set up Bank Medici, the primary purpose of which seems to have been to find Russian oligarchs and mafiosi (often one and the same) to participate in Madoff’s schemes.
According to The New York Times, Kohn has disappeared. She apparently told people that she feared that somebody would have her killed.
* * * * * * * *
And, finally, there is the sad story of the French aristocrat Monsieur Rene Thierry Magon de La Villehuchet.
As you will recall, this aristocrat almost single-handedly funded Leon Black’s Apollo Group. And you will remember that this aristocrat also played a key role in Black’s bid for Executive Life – a bid that turned out to be illegal, resulting in Black losing an $80 million lawsuit to the father of Deep Capture reporter Patrick Byrne.
In later years, this French aristocrat remained one of Leon Black’s most important business associates. He was a loyal friend – a committed member of the Michael Milken network – even after Black’s Mafia business partner Felix Sater threatened to murder Patrick Byrne (This according to the courier of that threat, who quoted Felix as saying, “we’re going to fucking take it private” if Patrick continued his crusade against illegal naked short selling.).
All of which makes it interesting to know that this French aristocrat also raised billions of dollars for the greatest Ponzi scheme the world has ever known – a Ponzi scheme that entailed illegal naked short selling that probably helped topple the American financial system.
That’s right, Monsieur Rene Thierry Magon de La Villehuchet not only provided most of the initial funding to Milken-crony Leon Black’s Apollo Group. He was also one of the most devoted “feeders” to the Bernard Madoff $50 billion phantom stock Mafia swindle.
And one day last month, police entered a luxurious office in a New York skyscraper. On the desk, there were pills (what kind of pills has not yet been revealed). On the floor, there was a box cutter. There was no note.
But there he was — Monsieur Rene Thierry Magon de La Villehuchet.
He was dead.
They said it was suicide.
* * * * * * * *
To be continued….
* * * * * * * *
Mark Mitchell is a reporter for DeepCapture.com. He previously worked as an editorial page writer for The Wall Street Journal in Europe, chief business correspondent for Time magazine in Asia, and as an assistant managing editor responsible for the Columbia Journalism Review’s online critique of business journalism. He holds an MBA from the Kellogg Graduate School of Management at Northwestern University.
If this article concerns you, and you wish to help, then:
1) email it to a dozen friends;
2) go here for additional suggestions: “So You Say You Want a Revolution?“
Context: http://articles.latimes.com/2008/apr/02/local/me-pellicano2
Mark,
Your podcast link doesn’t work. It appears the podango website has shut down.
Great work!
Many thanks for this, Mark. Like Madoff whistleblower Harry Markopolos, you are handing the DOJ all the evidence and red flags on a “silver platter” – they just need to get off their behinds and jail these miscreants!
Milken’s office manager brought down 200,000 customer accounts on September 11, 2001. His friend Anthony Elgindy, a naked short that worked with the FBI shorted the airlines on September 10, 2000.
Khashogi is friends with every president and involved with every recent financial scandal, including S&L and BCCI and the Iran Contra Affair.
Khashoggi, along with Ramy El-Batrawi, was the principal financier behind GenesisIntermedia, Inc. (formerly NASDAQ: GENI), a publicly traded Internet company based in Southern California. After the September 11, 2001 attacks, Khashoggi’s U.S. based checking accounts were frozen and Khashoggi was unable to make a margin call with Native Nations Securities, whose CEO and largest shareholder, at the time, was Valerie Red Horse, former office manager of junk bond king, Michael Milken. In turn, Native Nations was unable to meet its obligations on it margin loan to MJK Clearing, Inc.[2][3] Trading in the stock of GenesisIntermedia was halted in September 2001. Khashoggi’s unwillingness to pay his margin loan to Native Nations Securities, and Native Nations inability to pay its debts to MJK Clearing, began a series of bankruptcies that ended in the largest payout in Securities Investor Protection Corporation history.[4][5] Native Nations Securities and MJK Clearing both eventually filed for bankruptcy.[6]
http://www.sipc.org/pdf/SIPC_dt.PDF
Adnan Khashoggi’s sister Samira Khashoggi Fayed was the mother of Dodi Fayed, who dated the late Lady Diana.
http://en.wikipedia.org/wiki/Adnan_Khashoggi
Another stunning chapter Mark. What a service you have done for all the decent and honest individuals who try agaist such odds to make a living in the ‘market’.
I truly hope you have some very serious and competent protection, for I am certain you have some very serious enemies by now.
In his testimony today, Markopolos said Madoff had Russian mob investors because of feeder fund evidence:
http://www.youtube.com/watch?v=6Q9A1PDpg0o
I just read this piece and I am stunned. I do not have the words to express the incredulity and disgust that things like this have taken and are taking place.
There have been very, very few moments when I felt that the veil has been lifted and I can see clearly. Without exaggeration, this must be what Neo (in the “Matrix” movie) felt like when he took the pill and saw just how deep the rabbit hole goes.
I hope and pray for justice.
And I hope and pray for your safety and well-being.
Thank you for your service, persistence and determination.
…Shines A Totally Different Light On My View of “Current” Events!
Now, It Wouldn’t Surprise Me To Learn That, The “Current” Occupant of The White House Was In Fact, a Plant For ‘Damage Control’ /Diversion About ALL This…
Strangely, I Feel Like We Are Approaching a “Kings Mountain” Moment In This Sordid Story:
http://en.wikipedia.org/wiki/Battle_of_Kings_Mountain
The mafia have long been known to have infiltrated our markets by means of manipulation and money laundering. Lets take it one more step. What better way to cover thy tracks than to infiltrate the watchdogs of our markets? I would be curious to see how these connections reach into our regulatory agencies. We know Gary Aguirre was a straight shooter and look where that got him? Who protects the “juice” of WS and why?
R101
A repeat, but a good one. For those that doubt the mafia’s involvement in wallstreet, scroll down to the picture of grasso, chairman of the NYSE who received a $140 million secret compensation package from the NYSE, which was supposed to be non profit at the time.
http://www.narconews.com/narcodollars1.html
http://en.wikipedia.org/wiki/Richard_Grasso
Another interesting connection:
William Ackman has a hedge Fund that is funded by Marty Peretz (who, as you have detailed, has also provided funding for Cramer and Steinhardt). Ackman has been very vocal in their short selling attack on companies like MBIA and Ambac. Both of these companies have appeared on the Reg SHO list for the past 18 months and it is obvious that have been victims of NSS. Ackman’s associate, Whitney Tilson, has alleged ties to Barry Minkow.
Jack Byrne had a protege at Fireman Funds. His name is Jay Brown. He succeeded Jack Byrne as CEO upon his retirement from Fireman’s Fund. Jay Brown then went on to become the Chairman and CEO of MBIA.
Coincidence? I think we have all seen enough “coincidences” to question each and every one of them…
Another significant if only coincidental Khashoggi connection: Theresa LePore used to work as a flight attendant on his private jet. LePore, of course, was the elections supervisor responsible for producing the infamous West Palm Beach butterfly ballot that likely threw the 2000 election to George W. Bush.
http://en.wikipedia.org/wiki/Theresa_LePore
How weird does reality have to get before it’s easier to just believe in fantasy?
The story is being picked up.
http://www.marketrap.com/article/view_article/9152/bernard-madoff-the-mafia-and-the-friends-of-michael-milken
NOYBIZNIZ,
And here I thought women were the ones thought to hold a grudge. This is absolutely incredible but very believable. Dot+Dot+Dot+Dot=
Deep Capture the story
Deep Capture the facts…….
Great writing…I vote Pulitzer.
Could someone make a new flow chart of the relationships? PDF perhaps. It might help the readers. People are visual.
imho.
Lots of details in there. You don’t have to go so fast.
Do them slow.
The ball clearly now goes back into the court of the DTCC management. Will they buy-in all of these delivery failures or let the mobsters keep the money of the investors they sold bogus shares to?
Overstock.com downgraded to Sell at Stifel Nicolaus
Now I wonder who owns this firm that did this downgrade? If there were only a pattern. Want to bet if we check it out it may be some parties mentioned in the above article? I willing to bet something. Any takers? LOL!! This is just incredible. Thanks again Mark and the DC gang!!!
INTERESTING to notice how several of these folks with a certain ‘cachet’ also have another label planted upon them when they show up on CNBC.
That being pronounced by one on the CNBC pocket puppets as a ‘LEDGENDARY INVESTOR’.
I wonder if some of us common folk could not also become ‘LEDGENDARY INVESTORS’ if we also had the inside crooked control these crims have?
LEDGENDARY my butt!
You guys, Mitchell and Jud have ‘LEGENDARY’ courage to be doing this work!
God bless you and keep you safe!
Patrick as well on the courage thingy
Client/Customer list for Madoff:
http://online.wsj.com/public/resources/documents/madoffclientlist020409.pdf
I think i saw Gary Weis’s name on Madoff’s list .
What a great gesture of courage and tenacity on the part of your whole team Mark. We are indebted to you and to Mr. Markopolis and can only admire the guts and talent you guys display. Thank You.
rtway
These are the people who handle “TAXPAYER DOLLARS”
Watchdog: Treasury overpaid for bank stocks
By JIM KUHNHENN, Associated Press Writer Jim Kuhnhenn, Associated Press Writer – 1 hr 12 mins ago
WASHINGTON – The federal government overpaid for stocks and other assets in attempting to help financial institutions last year, a government watchdog said Thursday, taking further issue with the beleaguered $700 billion rescue program.
Elizabeth Warren, chairwoman of the Congressional Oversight Panel for the bailout funds, told the Senate Banking Committee on Thursday that Treasury in 2008 paid $254 billion and received assets worth about $176 billion.
The figures were reached by extrapolating the results of a study of 10 government transactions, comparing the price paid by Treasury and the value of the asset at the time of purchase. Warren did not present details of the transactions the panel analyzed. A full report will be released Friday.
In a bright spot for the rescue program, however, banks that received capital infusions from Treasury have already paid $271 million in dividends to the federal government. A Treasury official said Thursday that banks are expected to pay more than $1.5 billion in dividends by the end of this month. Among them is Wells Fargo, which received a $25 billion infusion. The bank announced this week it would pay Treasury $371 million in dividends.
Still, lawmakers and watchdog groups continued to express frustration with the implementation of the rescue plan, known as the Troubled Asset Relief Program. Congress approved the plan last fall, but members of both parties criticized spending decisions by the Bush administration and former Treasury Secretary Henry Paulson.
The misgivings come as new Treasury Secretary Timothy Geithner is preparing to place the Obama administration’s imprint on the program with a sweeping new framework for helping banks, loosening credit and helping reduce foreclosures. Geithner plans to unveil the changes next week.
“The plan will strengthen transparency and accountability measures so that taxpayers know where and how their money is being spent and whether it’s achieving real results,” said Treasury spokesman Isaac Baker.
Referring to overpayment on assets, Warren said Treasury has failed to specify its goals and methods in helping more than 300 institutions.
“There may be good policy reasons for overpaying, but without a clearly delineated reason we can’t know that,” Warren said.
Senate Banking chairman Christopher Dodd, D-Conn., said the overpayment was sure to “raise eyebrows.”
“I can understand some gap,” he said. “No one is expecting perfection between the price you pay and what you think you’re getting. But that’s a pretty large disparity.”
Many thanks to the entire DeepCapture team. This is outstanding work and a service to make our country and society better.
We have to learn to stand up to this criminal influence and amoral standards, root it out and not tolerate it. No matter who the individuals are. Otherwise it creeps and grows like a cancer everywhere.
These are definitive steps to accomplishing that and eradicating this from our society.
Spread the word of these stories, write, call and visit your elected officials.
Tom
ssessing the Madoff Ponzi Scheme and Regulatory Failures
Wednesday, February 4, 2009, 9:30 a.m., 2128 Rayburn House Office Building
Click Here To View Archived Webcast
http://financialserv.edgeboss.net/wmedia/financialserv/hearing020409.wvx
Felix Sater changed the spelling of his name to Satter to avoid people knowing about his criminal past…
How does Mr. Tofik Arif (Russian) fit in to this story? He is the majority owner of Bayrock Group employer of Felix Sater.
Was my comments and questions out of line, since I see my junior blog was removed? What gives? Please let me kow if I broke any rules and what they were. Thanks in advance.
Until I get an answer about my missing post I will leave you guys with the best thing to happen for our cause other that Deepcapture..
Re: Video of House Hearing on Madoff & regulatory failureHere is a C-Span link to Markopolos’s entire testimony:
http://www.c-span.org/Watch/watch.aspx?MediaId=HP-R-15116
Deep Capture has a stupid automated system. If you take the time to footnote your post with more than two links, the system automatically deletes it as spam.
Whatever you do, avoid giving people links to back up your comments.
It makes you wonder how many supporters are driven away by this arbitrary system. I was quite angry until they explained to me why my posts were taken down and put them back up.
http://crooksandliars.com/susie-madrak/bush-sec-holdovers-cite-executive-pri
Fascinating story developing!!…And to think CNBC portrays Icahn as this doer of good for public companies…I’d like the FBI to raid CNBC and start investigating their journalists…Mainly Cramer, Faber, and GAsperino…i think they may have something to say.
I encourage everyone to email Congressman Janzorski (House Finance Speaker) and Congressman Ackman regarding Deep Capture. They were very out spoken with discontent for the SEC. If you view the whole hearings, they ripped the SEC Atty and General counsel a new ArseHole. Let them know about Deep Capture. Let them see that other’s know exactly what Mr Markopolos speaks of and lend even more credibility to his testamony.
correction Congressman Ackerman. He had a friend who lost everything to Madoff and is extremely agitated.
http://www.house.gov/ackerman/contact.shtml
Congressman Kanjorski contact:
http://kanjorski.house.gov/
What an awesome piece of work. Thank You.
Dave
Great piece of work. I continue to pass it along to all in my network (approx 100) and to those who suggest they are concerned for the “working folk” i.e Oreilly, as well as Cavuto, Limbaugh, and while at the C.E.S recently I approached Clayton of Fox. I spent time educating him as well as giving him the info re Deep Capture. He then passed it on to Fox business producer who was on location… HOWEVER, to date..all the above have done nada although Cavuto did give Patrick some time a bit ago.And Orielly is an embarassment as he walks the thin edge as he fronts run against GE. And NO ONE calls him on it. YET none of this will accompllish ANYTHING UNTIL someone simply does their job. You are doing yours? Why isn’t Gasporino doing his and why isn’t someone calling him on it? Where are the enforcement types.. We are well past the discussion stage as we face TRILLIONS in debt and companies and the financial system collapsing. I enjoy the discussion and investigation but in the real world of producion action is required. It’s time for those out there who can do something to DO IT and stop yakking. Be Well and God Bless
Fox Business Channel is almost as much of a joke at CNBC. Just this past weekend, who did they have on one of their weekend shows? None other than Sam Antar!
Eric I had no links it was just a brief comment!!
Buy lots of guns and ammo.
GMC’ THEY ARE WAY AHEAD OF YOU ON THAT SCORE!
http://www.govtrack.us/congress/bill.xpd?bill=h111-45
Brought to you by the Obama Chicago machine, “Big Brother”
Are you ready for the House Bill titled ‘HR 45, Blair Holt Licensing and Record Act of 2009′.
It will make it illegal to own a firearm unless it is registered with the database in Washington D.C. As a gun owner you will have to be finger printed, you will be required to provide your DL#, SS#, you must maintain a valid address at all times, submit to mental amd physical health records being put on file, you will also be required to file any address changes and you must report any ownership changes even if private sale. Each update will cost $25 and if you fail to comply you will lose your right to own firearms and be subject to criminal penalties.
I don’t think Congress is going to do anything about what has come out about the SEC by what Mr Markopolos revealed. He may become a target of some other Gov. agentcy is more likely IMO.
Ask Gary Aguirre.
Heaven forbid Mr.Markopolos feels threatened enough to arm himself for protection as that would be the perfect cover to nail him if he were in DC or NYC armed.
Repost, but important.
I find it amazing the Michael Milken is tied into Adnan Khasshogi, friend of presidents and royalty and Michael Milken’s office manager was involved in the collapse of the firm holding the assets of 200,000 customer accounts and it happened on Sept. 11, 2001 and it hasn’t received any media coverage.
Milken’s office manager brought down 200,000 customer accounts on September 11, 2001. His friend Anthony Elgindy, a naked short that worked with the FBI shorted the airlines on September 10, 2000.
Khashogi is friends with every president and involved with every recent financial scandal, including S&L and BCCI and the Iran Contra Affair.
Khashoggi, along with Ramy El-Batrawi, was the principal financier behind GenesisIntermedia, Inc. (formerly NASDAQ: GENI), a publicly traded Internet company based in Southern California. After the September 11, 2001 attacks, Khashoggi’s U.S. based checking accounts were frozen and Khashoggi was unable to make a margin call with Native Nations Securities, whose CEO and largest shareholder, at the time, was Valerie Red Horse, former office manager of junk bond king, Michael Milken. In turn, Native Nations was unable to meet its obligations on it margin loan to MJK Clearing, Inc.[2][3] Trading in the stock of GenesisIntermedia was halted in September 2001. Khashoggi’s unwillingness to pay his margin loan to Native Nations Securities, and Native Nations inability to pay its debts to MJK Clearing, began a series of bankruptcies that ended in the largest payout in Securities Investor Protection Corporation history.[4][5] Native Nations Securities and MJK Clearing both eventually filed for bankruptcy.[6]
http://www.sipc.org/pdf/SIPC_dt.PDF
Adnan Khashoggi’s sister Samira Khashoggi Fayed was the mother of Dodi Fayed, who dated the late Lady Diana.
http://en.wikipedia.org/wiki/Adnan_Khashoggi
I’d say it’s just a little bit obvious why you guys were named the best business blog on the planet. Very impressive!
More proof (as if it were necessary) of why DeepCapture is so badly needed:
http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_content_id=1003938623
One of the best articles on this subject matter in a very long time. The lines drawn between the various conspirators are exceptional. Keep up the brilliant work
effort.
Great job.
If you fast-forward through the Madoff whistleblower testimony to 1:47:30 you will hear Markopolos explain why he feared for his life and why he believed that Russian mob and Latin American drug cartels contributed to Madoff funds:
http://cspan.org/Watch/watch.aspx?ProgramId=HP-A-40507
Valerie Red Horse put together “pitch books” at Drexel Burnham. The claim that she was the office manager at the 135 South Rodeo Drive offices of Drexel should be examined closer. The SEC has the records when she took the principals exam.
She was the Native Nations CEO. That firm contributed to the largest SIPC claim in history up to that time.
http://www.rgm.com/articles/sec.html
“The first, or second, casualty was Native Nations, a small New Jersey brokerage run by Valerie Red-Horse, who served as a former office manager for Michael Milken, the disgraced junk bond financier. (Besides being a rising brokerage executive, Ms. Red-Horse, a Cherokee Indian, has appeared as an actress in such television series as “Murder She Wrote,” “Santa Barbara,” “Babylon 5,” and “Perry Mason.”)
In the daisy chain, Native Nations received 7.2 million loaned GenesisIntermedia shares; in turn loaned the shares to the MJK; and MJK Clearing reloaned the shares to at least four brokerages. When GenesisIntermedia shares resumed after a three-day Sept. 21, 2001, closure, the stock fell, and the brokerages turned to MJK for money to cover them.”
someone should try and contact Jay Hoag and ask him why he left TheStreet.CON…i heard he bought in for a ten percent stake..i guess Cramer robbed that guy too…It would be interesting to hear what he has to say.
click.file.print.distribute.repeat.
this is soooo good… naming names, modus operandi, pieces coming together. I’m checking this site twice a day just to see if there are updates. i need more on pond. more on cerberus. more on kingsford. more on fairfax discovery. i’m in information greed mode. this should be mandatory reading for any invested or concerned citizen out there.
Sender hired Pellicano. He is likely the one who hired Contigouros to undermine Fairfax. I’m guessing that maybe it is Exis that is the criminal enterprise that Markopolos is discussing with the SEC IG.
This guy has an edge…. and it isn’t brains or hard work… he’s a crook.
Pellicano was into prostitution… Sender in the tapes wants to see one of Pellicano’s friends.. and they talk about a pool party.. Sender is 5-4 and looks like somebody’s little brother.
Who is Sender’s partner that Pellicano and Sender talk about? It is confusing because they also refer to Russo whom Sender was suing.
Sender paid 800K in attorney’s fees and PI fees to get back 1.1 million that Russo screwed him out of. He eventually got 25K back and he had to testify at Pellicano’s trial.
I think this is the same network. Mark Valentine’s group was supposed to be one of three groups that worked for someone bigger and it was all about money laundering originally.
http://www.offshorealert.com/OAShort.pdf
It begs the question why they got such leniency and why they didn’t keep pulling on the dandelion until all the network of roots had been exposed?
Mark bragged that he personally made $850 million through a network of about 400 accounts he controlled and all he got was house arrest in his mansion in Florida.
Another Chapter for your book re: Milken & his bag of dirty tricks……look into the Milken – Dr Howard Scher – Prostate Cancer drug trials – FDA scandal that is brewing over the Dendreon-Provenge delay in 2007….there are some very interesting facts uncovered so far…
The head of one third of the network, according to rumors.
http://www.rgm.com/articles/theriseandfall.html
http://network.nationalpost.com/np/blogs/fpposted/VALENTINE.jpg
If you track Milken’s other associates (Winnick, Pickens, Icahn, Turner, Murdoch, Greenberg, etc. ) the nexus is just draw dropping.
If you want to understand the cultural, political, and economic backdrop to this story:
http://www.kevinmacdonald.net/books.htm
Don’t forget the looting of Russia by BoNY, Al Gore, Harvard, and the oligarchs.
http://www.webspawner.com/users/milken1/index.html
http://cityfile.com/profiles/steve-cohen/gallery
Putrid shark profiled here.
Randolf Pace (firm Rudy Pace) is rumored to be running another wing of the phantom stock scam.
Bernstein, who founded StockPatrol.com worked for Randolf.
http://www.rgm.com/articles/nytimes2.html
I was told Valentine ran a third, Randolf Pace ran a third and I don’t know who ran the last third.
Only a rumor, but…
http://www.forbes.com/forbes/1997/0224/5904114a.html
This involves clearing customer trades, processing securities transactions and other paperwork, and providing capital necessary for smaller broker/dealers to conduct their business. A major player in the clearing business is the prestigious, publicly traded brokerage giant Bear, Stearns & Co. Inc. Guess who cleared for Baron? Bear, Stearns Securities Corp., its clearing subsidiary. And guess who figures prominently in the story? Randolph Pace, a notorious bucket-shop operator of the past, who has been the subject of numerous regulatory actions during his short career in the securities business. Pace co-owned Rooney, Pace Inc. in the 1980s.
Big names in clearing are Pershing, a division of Donaldson, Lufkin & Jenrette; Correspondent Services Corp., a subsidiary of PaineWebber Inc.; and Prudential Securities.
Ya, the same Donaldson who refused to investigate naked shorting when head of the SEC.
This is all from 1997, this article is a keeper. Keep an eye on Randolf Pace and ask yourself whether or not records were destroyed when Bear Stearns went down.
http://www.forbes.com/forbes/1997/0224/5904114a_3.html
Bear, Stearns’ clearing subsidiary is a big player, with 2,100 customers, up from 725 in 1987. It is so big in this business that it claims to handle 12% of the New York Stock Exchange’s volume. Its clearing customers generate more than 100,000 trades every day. A decade ago its daily trades averaged 33,000. Most of Bear’s clearing clients a
Company spokesperson Hannah Burns says: “Clearing is a very, very proprietary business for us, and we don’t want the public knowing about it.”
A strange comment. Doesn’t the public have a right to know how its trades are handled?
One of Bear, Stearns’ first clearing customers was Rooney, Pace Inc., a notorious stock manipulator firm shuttered by regulators in 1987. Former co-owner, Randolph Pace, is a close friend of Harriton and regularly brings new clearing customers to Bear. ;
Right now Bear, Stearns is the clearing firm for at least 15 brokerages that are, if not full-fledged bucket shops, close to it. These include Sterling Foster, charged last September in a $53 million fraud complaint by the NASD for manipulating stock prices of newly issued stocks; Lew Lieberbaum & Co., of Garden City, N.Y.; Josephthal Lyon & Ross Inc. of New York City.
Does having Bear as a clearing firm give cachet to smaller firms? Just ask Ian Barry, investment manager of Fiduciary Management Services, developers of Grand Bahama Island. In July 1995, Barry learned that the broker handling his client’s $2 million account was moving its back-office business from Denver-based Hanifen, Imhoff to industry giant Bear, Stearns. “I felt we were in excellent hands,” says Barry, from his office in Bermuda. “Bear, Stearns was a household name.”
Bear, Stearns’ financials don’t specify how much its clearing business brings in.
With reason: Why let outsiders in on how lucrative its clearing is? In 1996 Bear produced revenues of $5 billion, on which it earned $496 million. Clearing almost certainly contributed to Bear’s extraordinary results up 68% in its most recent quarter, ended December.
Randolf Pace, steered dirty introducing brokerages, market makers and hedge funds to Bear Stearns clearing unit. Those records would all be destroyed with the Bear Stearns bankruptcy.
http://money.cnn.com/1999/06/28/companies/bearstearns/
Sterling Foster, which was indicted by a grand jury last year for securities fraud, is said to have underwritten six small stocks that allegedly were secretly controlled by Randolph Pace, a principal of Rooney Pace, and processed through Bear Stearns Securities. Prosecutors are investigating that matter because the stocks allegedly were manipulated and because Randolph Pace, who also was indicted in the Sterling Foster case, was barred from the securities industry at the time, the Times report said.
Bear Stearns stock was up 3 to 44-1/4 in Monday midday trading
http://www.youtube.com/watch?v=cL9Wu2kWwSY
Is there any chance someone here has access to Markopolos and might get him interested in the FTD fraud? He has considerable credibility right now. Regulators and legislators fail to listen to him only at their peril, and least for now.
Naked short selling is the biggest problem on wall street right now and it is what is behind MOST of the problems we are having right now. WE NEED TO PUT AN END TO IT AT ALL COSTS.
Kansas City Shuffle underway? Here we are focussing on Markopolus as the SEC whistle blower of the day and the topic of Madoff. However, how many noticed that MS was able to get the spoils from C i.e Smith Barney and in the process the stock has risen from the lows of 8ish in July 08 ish to a recent 24 ish. NOT bad for a corporatoin where it’s CEO was named by another SEC whistle blower Gary Aguirre. Oh that’s right, MS CEO was determined to be a good guy and Gary Aguirre some disgruntled SEC employee. So what is the point of the comment. The games continue and as they do many a MS shareholder was fleeced at 8 and many a C shareholder is now being fleeced at 3. And what’s with FOX NEWS now doing segments on the appointment of GE’s IMMELT? Seems to me the forensic types should easily being able to track the behavior of the miscreants and GE stock. UNTIL the masses can clearly SEE then the games will continue.
Names and addresses are all that is needed.
Then maybe we can go to the end of the crooks driveways and protest, uhuh.
The only links clearly brought out into the light of day for all to see would be the Congressmen and Senators since none of us can fire one single person in the SEC,DOJ, or FBI for faling to do the jobs they were paid for.
As for the media, have you noticed how many of the news papers are going down? Seems like joe sixpack and Mary average while they may not understand what is going on, has still decided the news boys are not giving our anything anymore of any value. Most news boy frauds wouldn’t report on a bank robbery they watched and photographed as long as the bank robber threw them a few dirty dollars out in the parking lot befor speeding away in the getaway car.
Very sad that our country has sunk to this level.
A vicious, JUDGEMENT is coming with no mercy!
Ron, here’s a picture of Steve’s house.
http://www.thebillionaireslist.com/2007/05/17/profile-of-steven-cohen-the-hedge-fund-king/
sac, goldmine.
I guess this explains the hedge funds’ obsession with secrecy and not being subject to regulation.
Everyone is out to get YOU!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! oh my!!!!!!!!!!!!
Russian mob, organized crime, Madoff, all discussed at house hearing Markopolos: http://cspan.org/Watch/watch.aspx?MediaId=HP-A-15082
(it’s like a good album or cd, you can listen to it over and over again and get something new each time.)
2+2 is looking more and more like 4
~~~~~~~~~~~~~~~~~~
I never watched the Sopranos, probably because corruption in real life is disgusting enough.
If anybody knows of the individual who sends out e-mails from the account counterfeitingstock@gmail.com, please get the message out to this fool.
It is irresponsible to send out e-Mail rants to others and use the names of such important people as Patrick and Mark in your message if such a rant will be laced with racist remarks. This is a fight against people of small moral character and for you to bring this effort down to their level by becoming one of them is inexcusable.
Recently you sent out such a missive to Sam Antar that was foul and racist. You provided Sam the opportunity to use your shortcomings against the highly ethical efforts of people like Patrick and Mark. He has already started posting that e-Mail on message boards as an indication of what type of character we have. If you can not clean up your act I would request that you move on to another topic of interest and leave this fight for people of a higher character.
Dave
Higher character ??? sure Dave .
Here is an email where Dave blasts Bud Burrell .
From: Dave Patch ———->To: —————Sent: Fri, 25 Apr 2008 7:56 pmSubject: RE: The original Complaint Filed By USXP Against the SEC
You do know Bud is about getting paid right. Quits every six months, claimsAltomare owes his money, and works closely with the stock promoters inMiami. He is close friends with Rod and yet is willing to shit on all tosound legit. Clearly Rod covers Bud’s back but not necessarily the otherway around. Bud even called me this past week and told me that he would never talk tothe OIG after they contacted him because he was too important except….theydid not contact him he initiated contact with them AFTER I was called. Budclaims he is personally threatened over and over and yet every federalperson I have spoken to have NEVER heard of him. I am not about self promotion or recognition. It is what makes meuntouchable. I could disappear in the trees and care less. Now, you want to critique my efforts have at it. But before you do makesure you have attempted to help people beyond yourself and your personalinvestment. Bet ya can’t. bet you haven’t spent the tens of thousands ofdollars or the ungodly hours of working for free to help companies andinvestors in positions you have no financial interest in. me, I amcomfortable with who I am. YOU contacted me and didn’t like the response.
I see we lanced a boil. The poison is oozing out.
You’re toast. Run and hide while you can. We won this one. Now, we get to clean up your mess. And we will.
House of Cards Collapsing….Who will be there handing down Indictments?
http://www.nytimes.com/2009/02/09/business/09hedge.html?_r=1
Hedge Fund Lets Investors Withdraw What Is Left
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By ZACHERY KOUWE
Published: February 9, 2009
In a move that could force similar changes at other money-losing hedge funds, the well-known fund manager William A. Ackman is cutting his fees and allowing investors to take what is left of their money from one of the funds he manages.
Mr. Ackman, who runs Pershing Square Capital Management, is suffering huge losses on a fund he started nearly two years ago to bet solely on the rise of the stock of the discount retailer Target Corporation.
The fund, called Pershing Square IV, is down nearly 90 percent this year, and Mr. Ackman has been feeling pressure from investors who want to take their money out. In an effort to mollify those investors, Mr. Ackman apologized for the losses in a letter sent on Sunday. He personally committed $25 million to the fund to help pay investors.
“Bottom line, PSIV has been one of the greatest disappointments of my career to date,” Mr. Ackman said in the letter. “That said, we continue to believe that we will ultimately be successful in our investment in Target.”
Those who want to withdraw what is left of their capital from the fund will be paid in March, Mr. Ackman said. About 90 percent of the investors in the Target fund are also investors in Pershing’s other hedge funds, which were down 11 percent to 13 percent at the end of last year.
For those investors, Mr. Ackman has agreed to forgo any performance fees on the other funds until he makes up for the current losses in the Target fund, according to the letter. The concessions could spur other hedge fund managers to cut their fees and increase the amount that investors can withdraw. Hedge funds typically charge customers yearly fees of 2 percent of total assets managed plus 20 percent of any profits.
Several large hedge funds, including Citadel Investment Group and Farallon Capital Management, have halted investor redemptions in certain funds after having huge losses last year.
Mr. Ackman said in the letter that he was disappointed by the fund’s “dreadful performance,” adding, “I apologize profusely for the fund’s results to date.”
Next Article in Business (16 of 34) » A version of this article appeared in print on February 9, 2009, on page B8 of the New York edition.
DING-DONG the witch is dead, the wicked witch is gone!
LindaThomsen out at SEC!
Now kill off the rest of the WHORE-DOGS and I might believe!
Ron Doc,
Woohoo!
UK Daily Mail Headline: “Bring back the guillotine for bankers”
http://www.dailymail.co.uk/debate/article-1138673/Vince-Cable-Bring-guillotine–bankers.html
I love the look on her face, oh boo hoo.
http://abcnews.go.com/Politics/Business/story?id=6821972&page=1
Thompson should have a job waiting for her on WS. Didn’t she stiffle the Gary Aguirre case to protect Mack? Either way, I am sure she bedded many on WS and probably can take her pick of positions.
Sammy..I am conflicted…off with the head or gut em like a carp.
All Schapiro is doing is trying to move attention off of FINRA’s role, especially her role of the Madoff case and distract by claiming to clean up the SEC. She has plenty of dirt on herself to clean before she can ever think I would believe her actions at the SEC are legit. She is a snake just like all of those like her. Congress should wipe her out as a regulatory agent of any kind because she DOES NOT pass the sniff test. What a loser she is along with Thomsen.
More of the same insiders protecting insiders…Look who will replace Thomsen.Can it get more obvious?
Former federal prosecutor Robert Khuzami
Mr. Khuzami, currently a top lawyer at Deutsche Bank AG in New York
SEC Expected to Name Khuzami Enforcement Director
FEBRUARY 9, 2009
By KARA SCANNELL
http://online.wsj.com/article/SB123414308702261917.html#
Former federal prosecutor Robert Khuzami will be named the new head of enforcement at the Securities and Exchange Commission as soon as this week, a person familiar with the matter said, in the latest bid by the SEC’s new chief to restore its credibility.
Mr. Khuzami, currently a top lawyer at Deutsche Bank AG in New York, was offered and accepted the position of enforcement director, this person said. He will replace Linda Thomsen, the division’s first female director, who is expected to resign this week, the person said. A spokesman for Deutche Bank declined to comment.
Mr. Khuzami and Ms. Thomsen couldn’t be reached for comment. A spokesman for the SEC and a spokesman for Deutche Bank declined to comment.
The appointment of Mr. Khuzami, a respected prosecutor who served as the chief of the securities fraud unit at the U.S. attorney’s office in Manhattan, is part of SEC Chairman Mary Schapiro’s effort to reinvigorate the enforcement division. The division has been criticized for not aggressively pursuing a tip that could have unraveled the alleged multibillion-dollar Ponzi scheme carried out by money manager Bernard Madoff.
Ms. Schapiro took steps Friday to remove the division’s “handcuffs” by ending a two-year-old pilot program implemented by former SEC Chairman Christopher Cox that required the staff to seek permission from the five commissioners before negotiating penalties. Now, as before, the staff can negotiate a penalty and bring it to the commission for final approval.
Just 10 days into her job, Ms. Schapiro is moving quickly to fill staff positions at a critical time in the agency’s 75-year history. Friday, she named David Becker, a partner with Cleary Gottlieb Steen & Hamilton LLP, as the SEC’s general counsel, a post he held from 2000 to 2002.
Mr. Khuzami, a Republican, spoke at the 2004 Republican National Convention on behalf of then-President George W. Bush and the Patriot Act, which gave authorities more tools to investigate terrorists but raised civil-liberties concerns.
As a prosecutor, he oversaw cases involving the Mafia’s influence on Wall Street and gained a conviction in what was described at the time as the largest Ponzi scheme. In the case, a jury convicted Patrick Bennett for bilking 12,000 investors out of $700 million.
Mr. Khuzami was one of three lawyers involved in a nine-month trial that led to convictions of a blind Egyptian cleric and nine others for a failed plot to blow up landmarks across New York City.
He is taking over the enforcement division as the SEC tries to secure its existence in a broad revamp of financial regulation under study in Congress and the White House. Ms. Thomsen was a frequent target in Congress, most recently over the Madoff case.
Her friends and colleagues say she was unfairly tarred in the financial crisis and was a victim of constraints from a less aggressive enforcement culture.
Write to Kara Scannell at kara.scannell@wsj.com
Below is a link to 4 1/2 hours of the House hearing on Madoff this past Wednesday. First is the terrific testimony of Harry Markopolos, followed by canned statements by five SEC jerkoffs and attempted questioning of them by members of Congress. It’s long, but not to be missed.
http://cspan.org/Watch/watch.aspx?MediaId=HP-A-15082
Anon, the more things change the more they are the same!
Now Ob’s SEC fraud Rico/Woman is in charge inplace of the gangster Cox we know all about WHAT ‘Change & Hope’ really mean to our fli-flam man Ob!
Here is what Ob has to say to us now he’s in that big white pad: “Hey DOPES, you drank the kool-aid, didn’t ya?”
Go read the DRUDGE REPORT…Madoff has made a deal with the SEC.
Anyone who doubts the veracity of DeepCapture’s thesis that a group of mafia-connected hedge funds who collude to manipulate stocks ought to read these two articles:
___ From the FBI website:
“As a result of the [criminal] investigation, 33 people were indicted on charges of extortion, securities fraud, stock manipulation and commercial bribery. The defendants including several members and associates of the Genovese and Bonanno LCN Families, as well as the principals of Health Tech and Meyers, Pollack and Robbins. Twenty-eight defendants pled guilty and five were convicted after two separate jury trials.” Here’s the link:
http://www.fbi.gov/hq/cid/orgcrime/casestudies/mobstocks.htm
___ From the Laborers International Union of North America website archive:
“When Robert Gallo applied to be a registered stockbroker, he mentioned his only previous experience was as a labor foreman. He did not say anything about his reputed association with one of the nation’s largest crime families, New York’s Genovese clan.
Mafia-run stock-market firms focus on violence and ripping off clients.
Once Gallo joined the Monitor Investment Group at 20 Exchange Place, however, he acted in a manner more consistent with a character in “The Sopranos” than someone who keeps track of ‘Moneyline News Hour.’
On June 14, Gallo was indicted along with 119 others in the biggest securities fraud case in U.S. history. Since then, law enforcement officials and financial regulators have come to believe the mob’s influence on Wall St. may be even greater than they once supposed.”
Here is the link:
http://laborers.org/nyd_Mob_WallSt._9-10-00.html
A simple Google search with the keywords “bonanno genovese stock fraud” easily turned up these vivid examples of the Mafia’s involvement in stock manipulation.
Ron Doc, Obama should not be nor is he the object of you ire, he has nothing to do with the state of things so please take thae political bias of yours out of here and keep on topic. Here is not the place for your political rhetoric. Keep your eyes on the criminals that stole our money not our New President. Never heard you speak about Bush in this manner and I don’t wonder why!!Thank you!!!
Sean, I feel exactly about Bush as Ob. Both look the other way about market manipulation and hire or keep on the same criminal regulators who seem to work only for the crooks.
They both keep picking banksters and hedgie connections so the wolves can keep eating all us underclass as they think of us.
Pol’s in general don’t seem to give a flat rip! That’s why the same scum stays in posts under and administration from what I can tell. Show me different if you can.
They are all Republicrats, very little difference between any of them so if your flavor is Ob so be it but the all stink,AND AS WE NOW SEE LIE regardless of what they made you expect.
If that offends you too bad bud, not my intention, but it is the way it is.
Sean,
You are a prime example why they deployed 20,000 units in the USA. Most people are seeing some politicians ( both repub and Dems) for what they are…part of the problem as opposed to a solution to the problem. Someone has to control the masses when the A’politicals clash with the hard left wingers. Just the mention of Obama’s name draws you into a defensive mode. Loosen up bud, just because you are anti Obama doesn’t mean you are pro Bush either. I despise them both. Lets agree to disagree but be able to speak freely because that is our right….for now anyway. Face it, both sides have aided and abetted the collapse of America as we once knew it. Its ok to admit that. I hold people accountable for their actions, not their party affiliation.
This is GREAT ! Amen & Amen
From:
“Patch, David
To:
thomsenl@sec.gov
Cc:
Schapirol@sec.gov, waltere@sec.gov, aguilarlu@sec.gov, paredest@sec.gov, caseyk@sec.gov, vollmera@sec.gov, kreitmanm@sec.gov
Linda,
I watched the c-Span replay of the hearings held last week regarding Bernie Madoff and have a few questions I wonder if you would mind answering.
1. You continued to refer to the fact that the SEC opened an investigation into Bernie Madoff in 2006. Can you explain what exactly transpired in the window comprising that day in 2001 when Markopolos first approached the SEC and 2006 when the investigation was initiated by the NY Bureau?
2. A 2007 findings report out of the GAO revealed that the SEC was generally slow in closing down enforcement investigations with many cases remaining open well past the 5-year statue of limitations. Can you explain why and how an investigation of this nature was closed down so rapidly based on the allegations presented and the details provided? I can only think of one other such investigation hastily closed in recent years and that involved Gradient Analytics. Like Madoff, evidence after the fact regarding Gradient support the allegations made by Overstock.com and support allegations of wrong doing by Gradient. The SEC had sworn depositions by former Gradient employees that backed up the claims of Overstock.com and yet something motivated the commission to hastily close down that case.
The report reveals a large number of open investigations that, though no longer active, have never been closed. According to the SEC’s internal case-tracking system, 3,700 investigations are now open. Of that number, at year-end 2006, two-thirds (2,467) had been open for two or more years, one-third (1,233) had been open for five or more years, and an eye-opening 481 had been open for 10 or more years. http://www.gao.gov/new.items/d07830.pdf
3. You repeatedly informed the members of Congress that the people of the SEC “live to bring an enforcement case” and that “the bigger the case the better” and yet the Congressional and OIG investigations into the handling of John Mack and Pequot reveal a very different culture. A culture where “political juice” impacts the agencies motivations to bring a case forward. Do you not think that the very fact that Gary Aguirre was fired for going after a politically connected CEO factors into the energies enforcement attorneys would dedicate to similar members of society? If the Senior staff is going to terminate attorneys who go after people like John Mack, why risk your career going after a similarly respected individual in Bernie Madoff?
4. Finally, one member of Congress asked specifically about details involving the closed investigation and referrals. With the initial investigation closed, the matter is available for public interests under the Freedom of Information Act. Details of enforcement actions, enforcement notices, and referrals is a matter of public record in a closed case and thus the Commission has no authority to deny the public or the members of Congress of this information. Would you care to delve into why you misled the members of Congress on this matter?
I am glad your career at the SEC is being terminated. It should have taken place long ago. You have fallen out of touch with those that work within your Division and fallen out of touch with those you are required to protect – the investing public. Senior staff within the Division of Enforcement are under investigation for perjury charges in cases they brought before the courts, have been recommended for disciplinary actions relative to professionalism in the work place, professionalism relative to individuals under investigation, and for the wrongful termination of an employee. You personally were recommended for disciplinary action relative to your personal interference in a high level investigation. These allegations are not indicative of a well run division, these allegations represent a division out of control and leaderless.
In your tenure as Director of Enforcement you set back the confidence of the investing public and the confidence of those who work within your department. I am glad you received the public flogging the members subjected you to as it has been a long time coming. You appeared arrogant and uninformed in that hearing and let the world witness such incompetence first hand. You presented to the public how many perceive many at the SEC and it was a sight Mary Schapiro will have a long time correcting.
Best of luck to your next employer. Hopefully they will not be so delinquent in terminating such a poor performer as our federal government has been.
Remember; you heard it here first with regards to a full in depth investigation into a captured regulator.
Dave Patch
http://www.investigatethesec.com
Ron Doc, not offended but this is not the forum for such rhetoric. Also President Obama has been in office for less than 20 days. Maybe, just maybe you can give him a chance to see if he can make a difference, they gave Bush eight years and you give President Obama 1 month!1You see where people other than myself might see some hypocrisy on your part.Now if we can point the fingers in the direction of the true criminals like Mark et al are doing I think the focus is on point. We will have to agree to disagree on this one Ron. Peace SMZ. P.S. Anonymous, I agree wholehearted with most of your statement but same is my response to you. GIVE PEACE A CHANCE!!! I trust no politicians but non of them run Hedge Funds do they? Stay on point. Focus on the real criminals and Our current President has not yet had an opportunity to make change. I think you guys are being shortsighted but this is’nt the first time and probably won’t be the last. I don’t believe either of you are being fair is my point. And we can drop this discussion as this is not the forum for it would be my other point. Again peace!!
Sean said “I trust no politicians but non of them run Hedge Funds do they?”
Sean, surely you can’t be serious, can you? If so, you really need to do a little more homework and connect some more dots. And when you do, be sure to remove your partisan rose-colored glasses…. you will see that the American public has been, and is being fleeced by both parties.
Do you know how many former politicians are working in the banking system at high levels? How about Private Equity (which, in many cases, are Hedge Funds)? Do you think that these people suddenly stop talking to their former associates in government once they enter the private sector? Come on….
And, regarding the new administration, do you really think that this “stimulus” bill is going to have a positive effect on the economy? Or result in more bureaucratic red tape and hassles for employers? Do you really think that we can spend our way out of this mess? Do you agree with Obama that “ONLY GOVERNMENT” can get us out of this mess??
btw, this is as good a forum as any to discuss these matters. I will give Obama a chance to clean things up; but, until I see some people associated with Naked Short Selling crimes doing a perp walk, I will not be satisfied that this problem is being given the attention it deserves!
Noybizniz, you don’t know me or what I know or don’t so lets not go there. Your assumption that I belong to one party or another is wrong so your whole point is moot!!! Our entire Country from top to bottom is corrupt and needs to be purged and you and I bickering over nonsense on a blog designed to ferret out and expose these Miscreants is not the place or time to do such. As I said NOT THE TIME OR PLACE!!! This is my last response on this topic. Oh and one other time I AM A VERY SERIOUS PERSON!!! And this is not “our place” we don’t design the agenda here Patrick and the Deepcapture journalists do, so lets please respect them and that. Peace.
“Mr. Khuzami, currently a top lawyer at Deutsche Bank AG in New York, was offered and accepted the position of enforcement director, this person said. He will replace Linda Thomsen, the division’s first female director, who is expected to resign this week, the person said. A spokesman for Deutche Bank declined to comment.”
VERSUS
” May 06, 2003 (The Asian Wall Street Journal – ABIX via COMTEX)
MJK Clearing, a US securities group, is in liquidation of holdings of 200,000 customers. Its collapse on September 11, 2001 has given rise to an unusual stock fraud case involving Deutsche Bank and Adnan Khashoggi. An ex-MJK trustee claims the defendants perverted the “short” sales system, using a chain of brokerage groups through which certain securities were channeled. No shares were sold to the public. The trustee alleges that Deutsche Bank financed the “wide-ranging and sophisticated” scheme, through which it obtained $US200 ”
Enough said?
Ron:
Plus de la change, plus de la meme chose!
The difference this time is that this time is different. The miscreants with their bought SHELBYville politicians, newspapers and TV don’t understand that we can inform each other over the internet and the right viral email can reach everyone in the country in a day or two.
People are reading what you and I write, including powerful politicians, DOJ, regulators, miscreants, etc.
They will lose and we will win, the only question is the date of our victory party!
Our little snow flakes are piling up for some big plus de la change and the avalanche is coming and it is going to take the thieves off guard.
Sean,
What you have in our government is those directly involved with corruption (the majority) and those who choose to look the other way, indirectly involved ( the minority ). This is no different than the whistle blower Marcolopos laying a white collar fraud case in its entirety in front of the SEC for years yet they looked the other way and did nothing.
Can you not see why people are kept divided ? When the chit hits the fan and there is no food to be found, we’ll turn on each other and place blame on each other rather than put the blame where it should go, on WS and on our government. If people do not wake up and say we are Americans as opposed to party affiliations we are doomed. ( Divided we fall ) Don’t think for one minute many of those government officials sitting in their respected seats day after day and year after years are clueless as to what has happened here. They just thought they were one of the minority to take lobby money when in fact, they were a majority. The industry has used their ( ill gotten gains ) they robbed from the populace and bought and paid for the agenda’s of the criminals who paid them.
No one can fix this mess we are in and it is time to start calling like it is….America as we knew it has been brought to her knees by ” THE LOVE OF MONEY.”
I am an American above all and so should you be. Stay divided and we fall.