About that Bernie Madoff banking "back side" . . .http://tinyurl.com/d86wow
The use by jailed Ponzi scammer Bernard Madoff of Cayman Islands accounts that were linked to a Belize Bank "back side" financial flow channel, has reignited interest in Belize and its number one investor, Lord Michael Ashcroft, the deputy leader of the British Conservative Party and its former Treasurer, who is a citizen of the United Kingdom, Belize, and the Turks and Caicos Islands.
On March 13, 2009, we reported: "we have learned how some of Madoff's international operations were conducted. At 3:30 pm every day Madoff Investment Securities employees would call banks in Grand Cayman, Cayman Islands, and tell them to 'roll the accounts.' That was insider language for 'lend the money.' In some cases, money was moved to the Belize Bank, which was described by a Madoff insider as a 'back side' for secretive banking operations in the Cayman Islands and Switzerland."
The report also stated: "Madoff's London operation were handled out of a one-room small office located at 43 Newell Street. Every time Madoff visited the office, the London staff was extremely nervous. According to a Madoff insider, the Madoff London office was nothing more than a "front" operation. There may have also been some synergy between Madoff's London operations and American International Group's (AIG/CIA), which reportedly is missing $500 billion from a similar small office pass-through operation in London." In addition, Charlesworth Shelley Hewlett, who died from "unusual" causes in January, was the accountant who audited the books of Antigua-based Stanford International Bank from his small office between fish and chips shops in north London.
Ashcroft's holding company owns Belize Bank, as well as a number of other assets in the country. Ashcroft has also plied funds to Belize's two main political parties, which means that Ashcroft wins any election in the Central American country, even though when one of the two major parties loses. Ashcroft donated generously to the 2003 campaign of former People's United Party Prime Minister Said Musa, the victor, but also was a major donor to present Prime Minister Dean Barrow of the United Democratic Party, who defeated Musa in 2008.
In August 1999, The Times of London reported that Ashcroft's name appeared in Drug Enforcement Administration (DEA) files on drug trafficking and money laundering in Belize. Ashcroft promprly sued the Rupert Murdoch-owned paper for libel.
The deputy Tory leader is chairman of BB Holdings, the holding company that owns Belize Bank. Ashcroft has owned the bank since the 1980s.
Ashcroft's son operates Belize Bank in the Turks and Caicos Islands, another favorite off-shore banking location. On February 22, 2009, The Timesof London reported that Britain's Electoral Commission was investigating campaign donations to the British Conservatives that originated from an overseas network of companies through Bearwood Corporate Services (BCS), a reputed Ashcroft company which is owned by Bearwood Holdings, which is owned, in turn, by Astraporta UK with Stargate Holdings of Belize being one of Astraporta's major shareholders. On September 27, 2008, The Daily Mirrorof the UK quoted former Belize Prime Minister Manuel Esquivel, whose one-time close relationship with Ashcroft has grown cold, as saying, "Everything he [Ashcroft] does operates out of the Belize Bank. After he bought it, many new laws were passed which everybody widely believes - and I don't think he would deny - were basically written by his lawyers. Everything just escalated to where he became the boss."
On June 17, 2005, Belize House of Representatives member Mark Espat stated in the Belize House that "For 15 years now, the Carlisle Group of companies, led by Mr. Michael Ashcroft and sporting various disguises such as the Belize Bank, the Belize Holdings and more recently, Mercury Investments, Pillow Talk and E-Com, has pursued a scorched earth campaign to gain control of Belize’s most profitable public company – BTL [Belize Telecommunications Ltd.] . . . Throughout this conspiracy to control and suck dry BTL and its Belizean consumers, it would appear that this government has been an all too willing accomplice. As it has appeared to the Belizean people, the relationship between the conspirator and his accomplice is a 'Master-Puppet' relationship."
In 1998, Ashcroft merged Carlisle Holdings with his Belize Holdings Inc. (BHI). The global firm owned a number of cleaning companies, including OneSource.
Madoff's use of Belize Bank as a back side enterprise has taken on greater significance with the connection to a top British politician and, if the Tories beat Labor in the next election, a possible major British government official. The presence of small "front" operations run by Madoff, Stanford, and AIG/CIA in London also pose additional questions as to the relationship between the Caribbean operations of Madoff, Stanford, and Ashcroft to the current global economic meltdown. In addition, AIG/CIA was involved in shady operations from companies it operated in the Cayman Islands and the Netherlands Antilles, as well as New Zealand, Ireland, and France, through various companies it controlled, including Lumagrove Finance Company Ltd., Palmgrove Finance Company Ltd., and Maitengrove Finance Corporation.
There is also the "Bermuda connection." In August 2002, The Guardian(UK) reported that the Securities and Exchange Commission (SEC) and Manhattan District Attorney Robert Morgenthau, who has held that job since 1961 and who just recently announced his retirement, placed Ashcroft under investigation as part of a tax evasion probe of Tyco, the Bermuda-based company headed up by later jailed firm's chief Dennis Kozlowski.
One of Ashcroft's major critics was the late British Foreign Secretary Robin Cook. On August 6, 2005, Cook died suddenly while hiking in his native Scotland. Prime Minister Tony Blair, for whom Cook served as Foreign Secretary before resigning in protest over the Iraq war, failed to attend Cook's funeral.
Lord Michael Ashcroft mirrors Allen Stanford and Conrad Black, who also basically "bought" their royal titles as Sir Allen Stanford and Lord Black, respectively. Black is serving a prison sentence in the United States for fraud involving his Hollinger Corporation, a global media empire. Ashcroft's virtual control of Belize also mirrors the control that Allen Stanford once held over Antigua and Barbuda. Ashcroft, like Stanford and Madoff, has also maintained a residence in Florida....The Madoff thing is pretty good, but it does seem a cover-story when billions were siphoned to Israel.....
Where's the money?
The Bernie Madoff who appeared in court in March was a diminished figure, a sad version of the vital, regal person he'd been just a few months before. Gone was the smirk that some had detected in the videos of him right after his arrest. From 10 feet away in the jury box, where a handful of reporters were seated, one could detect what looked like turbulent currents under the placid exterior. Even with his eyes closed, Madoff blinked furiously at moments, his eyebrows spasming above the top of his rimless glasses. His hands betrayed his tension: At times he gripped and twisted his pen; he cracked his knuckles; he steepled his hands so hard that his fingers trembled.
The impression was of a mighty attempt at control. And somehow, Madoff managed to preserve a modicum of dignity, even as he pleaded guilty to 11 charges of fraud, theft, money-laundering, and perjury and absorbed the anger directed at him from the audience, where his victims watched. One of them addressed Madoff directly: "I don't know whether you had a chance to turn around and look at the victims," he said angrily. Madoff hesitated and then wheeled awkwardly in his seat as the judge admonished the victim for speaking to Madoff rather than to the court.
When the judge remanded him to custody that day, Madoff silently pulled his shoulders back and allowed himself to be handcuffed. The cuffs, which gleamed as if freshly polished, seemed somehow suited to the fastidious elegance of the defendant. And then Madoff was gone, likely never to take another step on free soil. He awaits sentencing on June 16. And even if he doesn't get the maximum 150 years, whatever he does receive will effectively be a life sentence for a 71-year-old.
The federal investigation proceeds. Less than a week after Madoff's plea, the firm's outside accountant, David Friehling, was charged with criminal fraud for years of signing off on phony statements. (Friehling's lawyer, Andrew Lankler, declined to comment.) The charges did not assert that Friehling knew of the Ponzi scheme. Friehling now appears to be trying to negotiate a deal with prosecutors.
Investigators continue to try to locate Madoff assets -- a bit more than $1 billion has been discovered so far, with specialists now fanning across the world's offshore locations. The court-appointed trustee, whose job it is to gather assets, has hired lawyers in the Cayman Islands, Gibraltar, and Luxembourg, with more jurisdictions likely to come. They're uncovering $50 million here, $75 million there. What isn't going to happen is the miraculous discovery of a giant vault with $65 billion in cash. That's because that $65 billion -- the most widely cited figure for the size of Madoff's heist -- is a fiction and always was. It's a tally of the stated value of all the account statements of every Madoff account holder as of Nov. 30. The total includes, in some cases, decades of fabricated returns. According to experts, the actual amount investors gave to Madoff over the years is probably closer to $20 billion. But even that outlandish sum will never be found; it was chipped away year after year after year. That, after all, is the definition of a Ponzi scheme: Most of the cash put up by new investors went to pay the old ones.
Put another way, if Madoff had still enjoyed access to large sums of cash in December, he would have continued paying his investors. The collapse of a Ponzi scheme means there is no money left. In the end, victims will likely collect only a tiny fraction of what they lost -- and some substantial portion of that will come from other Madoff investors who had appeared lucky enough to pull their cash out before the entire edifice crumbled.
This is arguably the most prominent financial crime ever, and the prosecutors -- who declined to be interviewed -- have to be aware that the public's rage won't be placated with the conviction of Bernie Madoff. So it will likely come as a huge relief to the Madoff family that DiPascali is telling prosecutors they were not participants in the scam. After all, nobody, apart from Bernie Madoff, is better positioned to describe who took part. But it's worth remembering that such a statement represents less than a full exoneration.
One of the most widely made assumptions is that various family members "had to know" what was going on. Frank DiPascali, of course, is not in a position to say what the family knew or didn't know. Representatives for all the family members have declared their innocence.
Even if Bernie Madoff never informed his family members of the fraud, there were a number of events that could have -- perhaps should have -- raised their suspicions. As the people in charge of the legitimate Madoff businesses, Peter, Mark, and Andy knew or should have known, for example, that some $250 million had been transferred from the Madoffs' London office to their business. That cash, Madoff later admitted, was money laundered from the illegitimate operation to the legitimate one. (Those funds, it turns out, were crucial. In court, prosecutor Marc Litt asserted that "at times, his [legitimate] firm would've been unable to operate but for the cash generated by this Ponzi scheme.") A lawyer for Mark and Andy Madoff says, "They had no knowledge whatsoever that their father engaged in any fraudulent activities, including allegedly fraudulent transfers of funds through Madoff Securities International in London."
Whatever happens, Peter, Ruth, and to a lesser extent the other Madoffs have many years of civil litigation to look forward to as various individuals, funds, and government entities try to recover whatever assets they can find.
As for DiPascali, his potential testimony may provide some good news for at least one feeder fund. According to a person familiar with the matter, DiPascali has no evidence that Fairfield Greenwich's top brass knew of the scam.
But DiPascali could spell trouble for certain key Madoff customers. DiPascali, according to this source, admits manipulating the returns of several clients, jiggering them up or down -- phantom gains added or reduced -- to suit their needs. Says the source: "This is a group of inside investors -- all individuals with very, very high net worths who, hypothetically speaking, received a 20% markup or 25% markup or a 15% loss if they needed it." The investors would tell DiPascali, for example, that their other investments had soared and they needed to find some losses to cut their tax bills. DiPascali would adjust their Madoff results accordingly.
According to this source and a second one familiar with the investigation, these special deals for select Madoff investors have become a central focus for federal prosecutors. The second source describes the arrangements as "kickbacks" and "bonuses." A spokesperson for the U.S. Attorney declined to comment. But a little-noticed line in a public filing by the prosecutors in March supports at least part of these sources' account. The document that formally charged Madoff with his crimes asserted that he "promised certain clients annual returns in varying amounts up to at least approximately 46 percent per year." That was quite a boost when most investors were receiving 10% to 15%. It appears to reflect the benefits that accrued to those who helped bring large sums to Madoff....