Mr DiPascali was the main point of contact for investors, who ranged from Jewish charities to film moguls. He also oversaw the mechanics of the vast Ponzi scheme. It purported to be making steady, double-digit returns trading options on a share index. In fact, client funds sat in an account at JPMorgan Chase and were withdrawn only to meet redemptions or to be parked in Treasuries and the like. This was “nothing more than a slush fund”, according to the complaint against Mr DiPascali by the Securities and Exchange Commission.
Though there was no actual trading, the conspirators were far from idle. They cooked up phantom trading records, client confirmations and account statements to corroborate the fictitious investment strategy. They made thousands of wire transfers between the firm’s London and New York offices to make it look like it was earning commissions from real transactions.
Thursday, August 13, 2009
Bernie Madoff, How did he do it?
for anyone puzzled about the Bernie Madoff ripoff, this Economist article and the NYT article on Bernie sidekick Frank DiPascali presents some basic info on key aspects of the scams. A complex Ponzi scheme, covered by loads of fake info cleverly designed to appear as legitimate trades.