Madoff: Money Launderer?
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Zinman declined to say why Richards hadn't sought a similar British court order, rather than asking to be relieved of his responsibilities. In an emailed message, Zinman said Richards was complying with the orders of Judge Louis Stanton, who is in charge of the SEC case.
In a telephone interview, Sam Jaffa, the spokesman for the Serious Fraud Office, told Condé Nast Portfolio that its investigators believe they have found evidence of illegal activities by the Madoff London firm, and "are looking at money-laundering issues." He said he didn't have any additional details, and added that the investigation still was in its early stages.
Jaffa also said there were indications that the London firm had been a conduit for investors to put money into Madoff's investment fund. He said the investigators also are looking into whether some so-called feeder funds—outside entities that had funneled money to Madoff's scheme—may have been "skimming" some of investors' money themselves.
Madoff's lawyer, Ira Sorkin, declined to comment.
In New York, Picard's investigators have said that finding out what happened in Madoff's London office is crucial to tracing investors' assets.
"There's a great deal of information that we need to discover as a result of the international operation that occurred in London," David Sheehan, a lawyer working with Picard, said at a public meeting with Madoff investors last month. "There was a great deal of speculation, rumor and surmise as to what was happening there. We actually need to know the facts."
A spokeswoman for Picard said he wouldn't comment on the apparent lack of communication with Richards about his success in persuading the London court to get Grant Thornton to share information. She said Picard "disagrees with any statement that...the receiver and the trustee are not cooperating."
Public records on file in London show that Madoff's British firm was founded in 1983. When it shut down in December, Bernard Madoff had owned all but one share of its voting stock (the one share belonged to his brother, Peter), while nearly all of the non-voting stock was owned by Bernard Madoff, Peter, and other family members.
Jaffa said that the London firm did have an active, legitimate trading business. Interviews indicate that Bernard Madoff originally had set up the London firm to get access to a then-new British futures exchange, and a seat on the London Stock Exchange.
People familiar with the London inquiries said that, for reasons not yet clear, the Madoff London firm about seven years ago stopped trading for customers, and from then on traded only with Madoff family money.
In court documents last week, Richards confirmed earlier press accounts that Madoff had transferred about $164 million to himself from the London firm in November. People close to the inquiry have speculated that the transfer may have provided the bulk of the money for $173 million in checks found in his desk drawer after he was arrested. Those checks were made out to friends, relatives, and employees, which he apparently had intended to give them just as the roof was falling in on his investment fund.
Stephen Raven, who ran Madoff's London office, said after Madoff's arrest that neither he nor any of the 27 other employees of the London firm had been aware of any illegal activity. Raven this week couldn't be reached for comment, and the British solicitor representing him didn't return phone calls seeking comment.
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