Spaghetti alla Madoff

  • 1 part promise and 12 percent earnings, year in, year out
  • 3 vats of baloney
  • plenty of pork
  • a yacht named “Bull,” and other accouterments of great wealth alla marinara (Italian phrase meaning “sailor-style”)
  • 4 or 5 cups of feeder funds
  • oodles of noodles, and
  • a dash of 950 percent returnsspaghetti


In a large broker-dealer, mix all ingredients and simmer for thirty years or so. Stir slowly, drink fine red wine, and deliver the tangled plate to Irving Picard when the recipe sours from a bad economy. Let him figure out who eats what.

The sauce keeps getting thicker. The criminal investigation into the Madoff affair, according to The Wall Street Journal, now includes three high-profile investors: Picower, Chais, and Shapiro. All I can say:

What a mess.

Two of the three investors received outrageous returns: 300 percent in one year and 950 percent in another. It’s hard to believe they didn’t have some knowledge of Madoff’s chicanery.

One of the investors, however, wired $250 million to Madoff just ten days before the Ponzi scheme collapsed. Talk about bad timing. It’s hard to believe he had prior knowledge about Madoff’s confession on Thursday, December 11, 2008. And if the investor knew about the scam, as the Federal investigators suspect, what would he say about the $250 million loss:


I’ll exercise some self restraint here and say, “It’s too early to judge the three investors.” The facts need to play out. It’s that $250 million wire that gets me.

Why turn good money into bad?

Plus, there’s the whole clawback strategy. The trustee is on a mission to recover funds. He has his agenda, and we’re watching a game of hardball between the courts and some extremely wealthy investors.

A criminal investigation, it seems to me, will shake free plenty of capital. The trustee is already suing Picower for the return of $5.1 billion. There’s nothing like the threat of a criminal investigation to scare investors. Here’s the complaint for your reading pleasure.

One billion in recovered assets and counting.

No Comments

  • Astrid Julian says:

    Hmmm. Could it be that Madoff was really, as the Toronto police believe, running a laundry for organized crime? Rumor has it, when world banks began collapsing he made good on about 15 billion to the Russian mafia and this led to his scheme being exposed.

    • norb says:

      Really? Can you send links to the news articles? I have seen articles about the ties between the Russian mob and Austrian feeder funds, but nothing about Canadian ties. If I owed the Russian mob $15 billion, I’d probably pay them first, too. Thanks for the info.



  • jay says:

    Very Funny stuff!!…There’s also a selection of other tasty bytes at Bernie’s Blog –

  • mrs p says:

    When I heard about the $250 million, I wondered if it was repayment of a loan or part of some other scheme. For all we know, Bernie may have sent Carl the money and he sent it back to Bernie.

    The Shapiros had dozens of accounts on the customer list. under the name Shapiro, Segal and Wellesley Capital. The three daughters, Ellen Jaffe , Rhoda Zinner and Linda Waintrup, are officers and directors of Wellesley Capital.

    How many accounts does one family need? Unless, of course, each one is customized to fit a certain financial situation. Tax loss anyone? Loan collateral perhaps?

    Have you noticed no one ever talks about how much money the Shapiros have or how much they may have withdrawn over the years?

    In any case, the Shapiros knew Bernie was crooked if Bernie gave them bogus account statements.

    I’m sticking with the $250 million as being a setup.

    • norb says:

      Good points, Mrs. P. Your thought—withdrawals exceed investment losses—is particularly compelling.

      I’m still gathering information. What purpose did the $250 million wire serve? If you’re right, there was some benefit to losing money on purpose. I can’t figure out what it is.

  • Dear Mrs. P. I have been following Mrs. P. on the internet for several weeks and am very gratified by the information that they have on Madoff. My husband and I are Madoff victims/survivors who are trying to put our lives back together. We were finally able to find jobs after searching for 4 months. Life is filled with hard work and lots of fear and anxiety about the future. There is lots of damage to spread around….economic, physical and psychological. I am spending 6 to 8 hours daily and nightly researching this case and writing to members of support groups re: Madoff and writing to congressmen and other members of the gov’t. and the press to seek help for our collective problems. We need all of the help we can get and we need it now. The gov’t. is committed to ignoring this whole matter and waiting for us to get frustrated, tired and discouraged. I am certainly all of the above, but I will not quit till we get our justice. I have tried to comment on your website but I only receive the message that my account has been disabled. This is very disappointing to me as I think that your blog and Jay’s blog are the best out there. Please allow me to be a part of your blogs.

    • norb says:


      Thank you for your comments.

      First and foremost, I am so sorry to hear about your loss. Financial fraud is a personal violation. I doubt anyone, even fellow victims, has words to ease the hurt you described above. I admire your husband’s and your resilience, especially the fact that you each found jobs in this tough economy. Through the years I have watched people shoulder through their financial difficulties and come out okay.

      There is only one way to end financial frauds. That’s to separate financial reporting from money management. If a third-party custodian like State Street Bank or Pershing had generated your financial statements, Madoff never could have gotten away with his fraud. As you know, he generated his own statements. That’s the message Congress needs to hear going forward.

      BTW, I edited out your last name and email address just to err on the side of caution and protect you. I welcome all comments and will email you separately to understand the technical glitches.

      If anyone experiences similar difficulties please email me at


  • Dear Norb,
    I’ve read your blogs and am very impressed with your sensitivity and intelligence. Are you related to Kurt? He was a wonderful writer. What I spend my non working energy on (even though this is very hard work mentally) is writing, writing, writing, as I stated above. Everything on t. v. and print seems to focus on the unsavory stories of untold wealth and the losses that these “rich pigs from Palm Beach” suffered. Many people find it funny when rich people lose their money. Most people were just average middle class citizens who worked hard all of their lives and saved money, at the expense of the instant gratification that seems to be the customary behavior of most people today. There were lots of pension funds belonging to blue collar workers and white collar workers, many more than the handful of multi, multi millionaires and even billionaires. Money does not a make a person evil. Evil is present throughout our social strata. I am trying to get the focus off those “greedy s. o. b.’s, ha, ha,” who lost their money. We have real criminality in this country and it goes all the way to the top of our government. No one wants to uncover the entire scandal. Too many big names would emerge. That’s why the judge agreed not to have a trial and just have Madoff plead guilty. He never cooperated with the authorities and he never will. He knows that he is spending the rest of his life in jail. Meanwhile, every member of his Criminal. Crooked, Lying family is walking around in freedom, and continuing to spend whatever money they had years to hide away for this event. Madoff was a planner and he thought that this day might come. Certainly, by the fall of 2008 he KNEW it was coming. Madoff was a terrible person and a ruthless thief, but he had lots of help from FINRA, the SEC, the IRS, and maybe even the FBI. He had big political friends in very high places. They will never allow the real facts to be known because it would incriminate them. Meanwhile, we the victims/survivors are suffering and struggling to survive. My case is not as bad as many others. Many people have lost their homes and have had to sell whatever valuables and family treasures that they had collected over their lifetimes. Many are on food stamps and social security is the only barrier between them and homelessness. Many are ashamed to ask for social services, being proud earners for all of their working lives. This situation is horrible. I am involved with 2 Madoof groups on the internet, and we are working furiously to shed some light on this travesty and to obtain justice. There were some “insiders” who manipulated their returns for gain and then for tax purposes. Madoff was very happy to “pay them off” as long as he and his family got their billions. But 99% of us are innocent victims, and we just want what we are entitled to under the law of this land. I would think that you are familiar with the SIPA law. The trustee of Madoff’s bankruptcy, Irving Picard, is putting his own spin on the law, by which he is excluding “indirect” investors who were invested in Madoff through funds. He is not allowing them to be “account holders.” There were tens of thousands of these people, living all over the world, but I am really concerned with those of us living in this country. In this way he is ensuring that SIPC will not pay out “too much money” to the victims and thereby make Wall Street very happy. After all, they’ve been paying a big $150 a year to have the SIPC logo on display. We have the foxes guarding the henhouses in the SEC, FINRA, and other supposedly “regulatory ” industries. I have many letters and documents that I could forward to you if you are interested. We victims need a fearless, committed investigative reporter like we see in the movies, who is able to uncover all of the corruption in the government. And we sure have it now. It’s runaway corruption in every state, in every party, and I believe that politicians run for office to line their pockets, with maybe a few honest ones thrown in. But not too many honest ones. I and others have been trhying to get our congressmen to speak out on these issues of corrution and inequity with Picard./ Everyone remained silent, escpt for Ackerman in NY and Meeks in Florida. I don’t know where you live, but no one speaks for the victims and Picard, at his will, is victimizing us again. There are so many issues here, so much corruption and covering up that it seems insurmountable, but I will keep on fighting for justice. We’d love to have you pon board.

  • I am a former Madoff investor. We have a proactive group of over 400 other investors that have come together in an effort to find recovery. Together, we offer support and knowledge. This is a secure group that empowers victims to change the system that allowed this fraud to happen and allows them to unite in restitution. This effort will help us go from victims to victors.
    If you are a victim, or know someone who is, please go to: We feel there is strength in numbers and as such, have made contact with many legislators in an effort to get fair and just recovery.
    For more information about the group, visit the following websites:>
    We know that together we will prevail.
    Ronnie Sue Ambrosino
    Bernardmadoffvictims org

    • Ronnie,

      Thank you for this comment. I regret the losses you and other investors have experienced. I hope your group obtains the best possible outcome given the circumstances. In response to other former Madoff investors, I have created a forum on this blog. Here’s the link:

      The forum is still in its infancy. But you can post topics and discuss issues that may benefit your group and improve the knowledge and strength of your group.

      I hope this is helpful,


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