Skip to main content

Unlike most investors with Bernard L. Madoff Investment Securities, Malcolm Sage kept a close eye his money manager. Not content to simply let Bernie be Bernie and make the trades that were making a literally unbelievable amount of money for his other clients, Sage insisted on directing the master, treating Madoff like a glorified E*Trade account. And he’s got the account statements, full of real-looking numbers and everything, to prove it.

Of course, while those numbers were real, like every other account statement emanating from BLMIS the Sage’s were fake, because of course Madoff & co. hadn’t actually made any of the trades shown on them. And so the Sages, like many a Madoff “net winner” before them over the last 13 years, have to cough up $16.9 million worth of those “winnings,” which of course weren’t proceeds of trades that never happened but other suckers’ money.

An “unavoidable and unfortunate consequence” of the trustee’s method is that the entirety of the Sages’ investment history will be wiped out, Judge Keenan said. The Sages had argued that thousands of trades in the family account were the product of Malcolm Sage’s directions or authorizations and should have been treated separately from the rest of Mr. Madoff’s scheme…. Based largely on [former Madoff aide Annette Bongiorno’s] testimony, the judge found that more than 5,200 transactions reported in the Sages’ accounts “were fabricated at or near month’s end using historical pricing information.”

Madoff Customers Must Return $16.9 Million for Falsified Trades [WSJ]

For more of the latest in litigation, regulation, deals and financial services trends, sign up for Finance Docket, a partnership between Breaking Media publications Above the Law and Dealbreaker.

Related

(Getty Images)

Compassion For Bernie Madoff In Pretty Short Supply

U.S. District Judge Denny Chin understands math and actuarial tables as well now as he did 11 years ago.

(Getty Images)

Goodnight, Sweet Ponzi Prince

Bernie Madoff goes to his reward.

(Getty Images)

President Sleazebag Endorses Island Vacation For Guy Trying To Recover Money Other Sleazebag Stole

The Madoff trustee should be allowed to go to the ends of the earth, or at least the far corners of the Caribbean, according to the Solicitor General.

By Chris Potter (Flickr: 3D Judges Gavel) [CC BY 2.0], via Wikimedia Commons

Older Brother Sells Out Younger Brother In Alleged Crypto Hedge Fund Fraud, But Notes That Real Villain Is SEC

If they’d just unfreeze those assets, his little bro would quickly get them back to his alleged victims, he’s pretty sure.

jones beach

Nassau County Is A Hotbed Of Fraud And We Couldn’t Be Prouder

From meat mislabeling to a guy named Heckler cold-calling Ponzi scheme victims, it’s been a delightful month on Long Island.

fbi agents

If Your Ultimate Goal Is Not Going To Jail, Don’t Point A Gun At An F.B.I. Agent

An alleged Ponzi scheme you might be able to talk your way out of. That, not so much.

By Mike Cauldwell (https://www.casascius.com/photos.aspx) [Public domain], via Wikimedia Commons

Former Alleged Father-Son Fraudster Allegedly Became A Mama’s Boy

No, Brent Kovar’s mother didn’t have an “artificial intelligence supercomputer” in her basement, the SEC says.