Tags: Dreier, Galleon Group, K1 Group, Madoff, Nadel, Petters, surfeit of fraud
Admit it: You’re bummed that the Bear Stearns fraud trial has ended in a flash of prosecutorial incompetence and 12 potential clients for Ralph Cioffi and Matthew Tannin. We are, too. But fear not, friends, there’s an embarrassment of hedge fund fraud riches out there to continue to follow, and we thought we’d offer a Readers’ Digest of the (alleged) scams and scandals still making news.
Madoff: Let’s start with the mother of them all. Bernie may be moldering away in Butner with the homosexual posse, but the fallout from Ponzi scheme to end all Ponzi schemes* continues. Last week, Madoff’s storefront accountant pleaded guilty to fraud, obstruction and false filings. But the court battles aren’t over: Swiss authorities have charged the former head of Banco Santander’s fund of hedge funds arm with criminal mismanagement for overseeing its $3.5 billion in Madoff losses.
Irving Picard is still busy, too. The court-appointed receiver, who said he’s promised to pay out $534 million to Madoff’s victims, has been forced to cut his claim against Madoff feeder fund magnate Ezra Merkin by one-third to $564 million. And then there’s the aftermath of the death of Madoff buddy and Picard target Jeffry Picower.
Galleon: Oh, where to begin? The daily ID of a new conspirator or insider-information source? The former Moody’s analyst who’s been indicted and gone missing? The scrupulousness of two of the government’s star witnesses? Yet another hedge fund ensnared? The possible SAC Capital connection? The future of Galleon’s staff?
Dreier: The Feds have won a couple of guilty pleas from two other members of disgraced lawyer Marc Dreier’s acting troupe.
Petters: The anti-Bear case, which seems to be going swimmingly for the government out in the Twin Cities. Prosecutors have put on a whole slew of witnesses that put Minnesota businessman and hedge fund manager at the center of a $3.5 billion Ponzi scheme. Oh yea, and Petters’s lawyer thinks the judge is conspiring against him. Always a good sign.
K1: Würburg’s favorite psychologist-cum-hedge-fund-manager lost his bid for release. Seems the court just doesn’t believe that Helmut Kiener an attaché at the embassy of Guinea-Bissau in the Netherlands. His lawyer is also railing against the “witch hunt” against his client based on “unfounded” claims from the banks who he allegedly ripped off to the tune of $400 million. And, you know, might have caught him.
Meanwhile, K1′s British Virgin Islands-based fund is going out of business, and one of Kiener’s alleged coconspirators has pleaded not guilty right here in the U.S. of A.
Nadel: Another six investors in Arthur Nadel’s alleged Ponzi scheme have returned their ill-gotten gains. The man himself remains in a New York City jail cell, awaiting trial.
The lesser frauds and alleged frauds: One hedge fund manager indicted for insider-trading, another for theft. A jet-setting hedge fund manager who wildly inflated his reported returns cops a plea. A lawsuit against yet another Ponzi schemer.
* did not actually end all Ponzi schemes