Where The Money Went

[prole]

And I thought the comparison between casino capitalism and a 30-year coke-binge was just figurative!

 

Lawsuit: Madoff's Workplace Was Rife With Cocaine, Sex

 

NEW YORK (CNN) -- A new lawsuit alleges that convicted swindler Bernie Madoff financed a cocaine-fueled work environment and a "culture of sexual deviance," and he diverted money to his London, England, office when he believed federal authorities were closing in at home.

 

The lawsuit, filed Tuesday in New York's State Supreme Court, was brought on behalf of former investors and seeks unspecified punitive damages and compensation.

 

Beyond that, it offers a look at what the plaintiffs' attorneys say was once Madoff's multimillion-dollar empire and what is now his world in a federal prison in North Carolina.

 

Among the allegations in the 264-page lawsuit are that during the mid-1970s, Madoff began sending employees to buy drugs for company use.

 

The complaint alleges that some employees and investors were aware of the drug purchases, and that BMIS [bernard Madoff Investment Services] was known by insiders as the "North Pole" in reference to the excessive amount of cocaine use in the work place.

 

Attorneys Joseph Cochett and Nancy Fineman filed the complaint based on an investigation, including a four-hour interview with Madoff in prison in July, that they conducted for former investors. They also allege that major financial institutions, including KPMG, the Bank of New York and JP Morgan Chase, were aware that Madoff was transferring stolen funds to his London office for personal purchases.

 

According to the complaint, Madoff transferred funds to London to buy extravagant personal items.

 

"In 2006 Madoff thought the end was near because the [u.S. Securities and Exchange Commission] investigated. He realized he had to change things up so his focus shifted to London," Fineman said. "We know that KPMG were the auditors for the London branch and that money was used to buy yachts and Bentleys, they are supposed to look at related-party transactions. KPMG should have noticed these as a red flag."

 

Officials of KPMG and the Bank of New York did not immediately respond to calls from CNN Wednesday evening for comment on the lawsuit.

 

JP Morgan Chase spokesman Tom Kelly said, "We do not comment on pending litigation."

 

The alleged illicit behavior outlined in the complaint did not stop at drug use and extravagant spending. Company parties consisted of topless entertainers, and some employees had affairs in places such as Madoff's own office, the lawsuit says.

 

Madoff was fond of escorts and masseuses, and used money stolen from investors to pay them, according to the complaint.

 

Madoff was convicted of operating a Ponzi scheme and defrauding thousands of investors. He pleaded guilty in March to 11 counts, including fraud, money laundering and perjury, and was sentenced to 150 years in prison. Prosecutors have said it was the largest investor fraud ever committed by a single person, totaling billions in losses to investors.

 

Before Madoff, 71, was transferred to Federal Butner Correctional Complex outside of Raleigh, North Carolina, he lived a life of luxury. The lawsuit states that he had multimillion dollar residences in Manhattan, Montauk on New York's Long Island; Palm Beach, Florida; and Cap d'Antibe, France.

 

The complaint includes details of Madoff's drastically different life now in prison. He lives in a cell where he sleeps on the bottom bunk while up top sleeps his 21-year-old cellmate, who is serving time for drug crimes, according to the lawsuit. Madoff's recreational activities consist of walking around the prison track at night, and eating pizza cooked by a convicted child molester, the lawsuit says.

 

Madoff now spends his time with infamous inmates, the lawsuit says, including Carmine Persico, a former organized-crime former boss, and Jonathan Pollard, a convicted spy for Israel. Many of his fellow inmates are in prison for drug and sex crimes, according to the lawsuit.

 

Going after large financial institutions that allegedly allowed Madoff's scheme to flourish is the goal of Fineman and her associates.

 

"Our goal of meeting with Madoff during the investigation is to get as much money back from responsible parties and that's why lawsuits are filed and why lawyers do what they do," Fineman said. "Even now, 10 months later, the pain in the victims' voices is still evident. I still hear it when I talk to people who were being defrauded for so long."

 

According to the complaint, Fineman and Cochett are seeking punitive and compensatory damages for their clients with "an amount to be determined at trial, including interest thereon."

 

Fineman said that during the prison interview with Madoff, "He said he was apologetic, but he didn't seem apologetic."

 

"I forgot I was in prison, he was talking to us as if we were in a restaurant -- he has quite an ego, you could see why people would be drawn to him," Fineman said.

 

"He told us things that were self-serving to him," she said. "But he told me he knew he would die in prison."

[j_b]

Just one bad apple that got caught after only 30 years. Anyway, the DOW is back up and it's gravy time again. There is nothing further to discuss. Move along.

 

 

 

 

[aint_this_great]

I'm sure he'll enjoy the cocaine in prison too...but prob' not the sex.

[tvashtarkatena]

Um...who gives a fuck about the 'culture of sexual deviance'? It would seem that 'ass raping the entire country with a raspy dildo the diameter of the Holland Tunnel' might be a little more apropos.

[prole]

Um...who gives a fuck about the 'culture of sexual deviance'? It would seem that 'ass raping the entire country with a raspy dildo the diameter of the Holland Tunnel' might be a little more apropos.

 

No, it's entirely appropriate and quite instructive that the suffering and destruction caused by these people and those like them is driven by the basest, most pathetic motivations possible. These "captains of industry", the "best and the brightest" that are driving the planet off a cliff (whether they're doing it legally or not) are simply infants playing in each others dirty diapers or strung-out adolescents. It's a simple truism but it is an obscenity and makes the suffering they're creating actually seem worse. No wonder we need to create myths of shadowy, omnicient conspiracies to understand the exercise of power. The reality is far more depressing.

 

Cue the "human nature", "it's always been this way", biodeterminist horseshit whenever...

[JosephH]

...or strung-out adolescents.

Welcome to Wall Street and trading in general - at least we've largely moved it out of the pits. But, then again, things could only happen as as fast as people could talk back when trading happened in pits.

[JayB]

Um...who gives a fuck about the 'culture of sexual deviance'? It would seem that 'ass raping the entire country with a raspy dildo the diameter of the Holland Tunnel' might be a little more apropos.

 

No, it's entirely appropriate and quite instructive that the suffering and destruction caused by these people and those like them is driven by the basest, most pathetic motivations possible. These "captains of industry", the "best and the brightest" that are driving the planet off a cliff (whether they're doing it legally or not) are simply infants playing in each others dirty diapers or strung-out adolescents. It's a simple truism but it is an obscenity and makes the suffering they're creating actually seem worse. No wonder we need to create myths of shadowy, omnicient conspiracies to understand the exercise of power. The reality is far more depressing.

 

Cue the "human nature", "it's always been this way", biodeterminist horseshit whenever...

 

Clearly, sex and drug-use amongst consenting adults are only permissible when undertaken to promote social justice.

 

 

[ivan]

Cue the "human nature", "it's always been this way", biodeterminist horseshit whenever...

“If I say it’s safe to surf this beach, then it’s safe to surf this beach!!!!”

 

[G-spotter]

That's, like, your opinion, man.

[prole]

Um...who gives a fuck about the 'culture of sexual deviance'? It would seem that 'ass raping the entire country with a raspy dildo the diameter of the Holland Tunnel' might be a little more apropos.

 

No, it's entirely appropriate and quite instructive that the suffering and destruction caused by these people and those like them is driven by the basest, most pathetic motivations possible. These "captains of industry", the "best and the brightest" that are driving the planet off a cliff (whether they're doing it legally or not) are simply infants playing in each others dirty diapers or strung-out adolescents. It's a simple truism but it is an obscenity and makes the suffering they're creating actually seem worse. No wonder we need to create myths of shadowy, omnicient conspiracies to understand the exercise of power. The reality is far more depressing.

 

Cue the "human nature", "it's always been this way", biodeterminist horseshit whenever...

 

Clearly, sex and drug-use amongst consenting adults are only permissible when undertaken to promote social justice.

 

If you'd like to argue that the "culture of permissiveness" and risk engendered at these firms would be as powerful and destructive as it's been if these "titans of finance" were getting comped Disney World tickets instead of banging whores in the mop closet and rails off their keyboards you're welcome to it. I don't think it's going to hold much water though.

 

At any rate, I don't give a shit. What's far more interesting is that these instances show what a sham we've been fed by your "invisible hand": that given free rein from onerous regulation and operating according to the dictates of the free market, the best and the brightest acting in accordance with their own selfish needs and desires would lead to a outcome that would benefit all. What a joke. The corporate media has been cheer-leading for these fratboys for decades; here they're revealed as nothing more than 21st century Caligulas spending our retirement money on call-girls and coke. If this were a chimp colony, they'd be torn limb from limb.

[JayB]

The two might be related in this case but insisting that drug-use and promiscuity/sexual-misconduct only manifest themselves in morally permissive environments requires a level of innocence that few people can persist in maintaining over the age of about nine. Just saying the words "Army Barracks," or "Catholic Church" should be enough to put that argument to rest.

 

Most people who favor the free market readily acknowledge that people are inherently fallible in ways that manifest in every conceivable fashion, which is why they tend to favor mechanisms that minimize the centralized concentrations of power so that the amount of damage that any single coke-addled, power-hungry fuck-up can do is minimized. I'll take the kind of disasters that the likes of a Bernie Madoff & Co can conjure in an exchange economy over what the likes of Stalin, Mao, Pol-Pot, and Hitler can conjure up any day. Hell, it's not even necessary to go that far - add up 3-4 years of medicare fraud and the cost will outstrip the tab for the entire bailout.

 

They also argue that even if humans weren't beset by the urges to lie, cheat, steal, and snort lines of coke off of their secretary's ass from time to time - the knowledge required to keep the economic basis of civilization going is so massively dispersed and contextual that it could never be centralized and administered by any single person, committee, or institution. This is an insight that seems to escape people who spend their time trying to precisely actuate the price of corn or computing a dollar figure that represents the "right" amount of gross national spending on health-care.

 

Ditto for the notion that something magical happens to people when they start working for the government that nullifies all of the faults and foibles that characterize human behavior in the private sector. Bernie Madoff running a single financial companies is a disaster. Constructing a system where the next Bernie Madoff is in a position to effectively run all financial companies is a sure way to bring about a catastrophe that'd make the recent implosion look mild by comparison.

[tvashtarkatena]

Um...who gives a fuck about the 'culture of sexual deviance'? It would seem that 'ass raping the entire country with a raspy dildo the diameter of the Holland Tunnel' might be a little more apropos.

 

No, it's entirely appropriate and quite instructive that the suffering and destruction caused by these people and those like them is driven by the basest, most pathetic motivations possible. These "captains of industry", the "best and the brightest" that are driving the planet off a cliff (whether they're doing it legally or not) are simply infants playing in each others dirty diapers or strung-out adolescents. It's a simple truism but it is an obscenity and makes the suffering they're creating actually seem worse. No wonder we need to create myths of shadowy, omnicient conspiracies to understand the exercise of power. The reality is far more depressing.

 

Cue the "human nature", "it's always been this way", biodeterminist horseshit whenever...

 

Perhaps if they'd established a firm foundation of respectful friendship with those coke whores before getting blown....

Edited October 27, 2009 by tvashtarkatena

[tvashtarkatena]

Yeah, I'm not really sure I care whether or not the money went for the kids piano lessons...in Monaco...or some chick with coke spoons for pasties.

[prole]

At least we might have gotten a piano player out of the deal...