Monday, December 29, 2008

Bernard Madoff's Offshore Banking

I keep wondering how many more Madoffs are there. There can't be just one. It seems like the past decade has been a free for all for those who knew how to work the system.
WSJ: LONDON -- As investors around the world size up losses on Bernard Madoff's alleged Ponzi scheme, one purveyor of investment services to the world's wealthy -- Swiss private bank Union Bancaire Privée -- is scrambling to explain its ties to the New York financier.

Half of UBP's 22 funds of funds, which channeled clients' money into other hedge funds, put at least some of that money into Madoff-related investment vehicles, including one run by J. Ezra Merkin, chairman of car-loan company GMAC LLC, according to a recent letter from the bank to investors.

Madoff's tax havens:
The accountants believe Madoff regularly sent bundles of money to offshore accounts in the Caribbean and Europe, the Observer newspaper in London reported yesterday.

Madoff, 70, has been ordered by a Manhattan fed eral judge to provide to the Securities and Exchange Commission by New Year's Eve a detailed list of all of his assets - in cluding investments, loans, lines of credit, business interests and brokerage accounts.

But tracking what happened to the estimated $50 billion Madoff is accused of making off with is already promising to be one of the longest and most complicated financial investigations on record, the Observer noted.

And should Madoff prove less than forthcoming regarding his offshore accounts, investigators could be in for an even tougher time.

The tax havens are designed under local laws to be nearly impervious to subpoenas or other investigative inquiries, making it notoriously tough for US officials to seize or even see what's there.