Fwd: BERNARD MADOFF FINALLY GOES TO PRISON...but Upstate New York construction workers are still out $ 354+ million he stole from their pensions

25 views
Skip to first unread message

gregory...@aol.com

unread,
Mar 12, 2009, 11:45:36 PM3/12/09
to gangb...@yahoogroups.com, gan...@googlegroups.com, cln...@lists.clnews.org
from NBC'S WSTM-TV CHANNEL 3, SYRACUSE, NEW YORK:

Unions react as Madoff goes to jail

By Lisa Spitz
Thursday, March 12, 2009 at 5:10 p.m.
It's the moment James Brady has been waiting for: To watch Bernie Madoff get hauled off to jail. Brady only wished it came sooner. He is the president of retirees for Carpenters Local 747, one of the unions whose pension funds got caught up in Madoff's multi-billion dollar sham.   
"It's sad he ruined so many lives," Brady said.
The disgraced money manager pleaded guilty to 11 charges in a Manhattan federal court Monday. The judge denied bail and has ordered the 70-year-old Madoff to jail. Madoff says he's "deeply sorry and ashamed." He faces a maximum of 150 years in prison when he's sentenced in June. Brady doesn't want to see anything held up by appeals, he says Madoff belongs in jail.
"Maybe that's the best thing for him to do, his time and try and get back all the money and pay back as many people as he can pay back," Brady said.
Brady says it could be years before unions here in Central New York know the full impact of this Ponzi scheme. Roofers Local 195 and Plumbers and Steamfitters Local 267 and other unions in the region also lost value in their investments thanks to Madoff.
How much did the carpenter's union lose?     
"I heard 15 percent but I know it’s going to take many months to go through the financial figures," Brady said.
In the meantime, Brady says he's still getting his pension check and he's continuing to keep an eye on Madoff and the impact this will have.

from the SYRACUSE POST-STANDARD:

Madoff ransacks future for Upstate construction workers

by Charley Hannagan, Mike McAndrew and John O'Brien / The Post-Standard
Sunday March 01, 2009, 4:45 PM

Joe Blum / The Post-StandardTom Tarbox (on left) of Frankfort threw a retirement party Friday for Ron Humphrey of Utica (right). When their roofers union was victimized by the Madoff scandal, it meant workers like Tarbox would have to pay more each week to ensure the pensions of retirees like Humphrey.
Thanks to Bernard Madoff, there will be more 60-year-old roofers climbing on Upstate's slanted roofs.
Retired union carpenters will have to get by without the $1,000 monthly annuity checks that paid their bills.
Bulldozer drivers' health insurance won't cover their children's trips to the dentist anymore.
Unions representing construction workers throughout Upstate New York had at least $354 million invested in funds Madoff defrauded in his $50 billion pyramid scheme, government records indicate.
It's unclear how many millions Madoff stole from the retirement and health plans that thousands of union workers, retirees and widows depend upon.
But Madoff's theft is already altering the dreams of the workers who built Carousel Center, Oswego's nuclear plants and the Carrier Dome.
"Am I worried?" said Rob Benedict, 50, a union laborer. "Yeah. We're all worried. I don't want to have to work until I'm 80."
John P. Jeanneret, a Syracuse financial adviser who directed at least 34 construction union accounts to invest in Madoff funds, said the unions have little chance of recouping their stolen assets without a government bailout.
Some unions might collect a maximum of $500,000 from a federal fund to help victims of securities fraud.
That's little comfort to the 846 workers and retirees of the Plumbers & Steamfitters Local 73 in Oswego, who thought they had $51 million invested in funds that Madoff raided, according to the union's 2007 federal disclosure.
Nearly half of Local 73's pension and annuity assets are at risk, the records indicate.
A U.S. Bankruptcy Court official has recovered $946 million from Madoff$946 million. Eventually, the court will distribute the money, pennies on the dollar, to the victims.
U.S. Rep. Dan Maffei, elected in November with the backing of nearly every union, said he will push for federal aid -- grants, subsidized bridge loans and a temporary relaxing of federal rules on pension-fund balances.
"I don't know yet how severe it is. I don't know how many millions," said Maffei, who met Feb. 20 in Syracuse with dozens of representatives of the victimized unions. "We have a feeling it's very severe."
He said Congress should help the unions because the federal Securities and Exchange Commission for years ignored allegations that Madoff, a securities broker, ran a pyramid scheme.
But with the national recession and hundreds of billions com mitted to other bailouts, "Clearly, the odds are against the government making these pension funds whole," Maffei said.
Union officials said they aren't optimistic.
"You have to assume it's a total loss," said Patrick Carroll, business manager for plumbers Local 73 of Oswego.
The theft of their future angers the workers who lay the bricks and wire the buildings.
Roofer Paul Desimone sums it up, calling Madoff "the filthy, rotten bastard who's living in that penthouse."
Scandal hits home
Madoff's fraud will force Tom Tarbox, 53, to spend seven extra years on the roof.
Tarbox, a roofer for 23 years, was planning to retire in two years, when he would be 55 and could collect two-thirds of his pension. But the early retirement option is out. That was one of the changes made last month by the Roofers Local 195.
Seven more years of back-breaking work will be physically punishing for middle-aged roofers, said Tarbox, a Utica-area resident who broke his back 20 years ago when scaffolding collapsed beneath him.
Starting next week, the roofers also will be forced to contribute an extra $3 from their $24-an-hour wages to the pension fund so current retirees don't go without.
That's $120 out of each paycheck for every 40-hour week for at least a year.
The pain is widespread. Those New York union pension, annuity and health plans facing Madoff losses include nearly 60,000 workers, retirees and survivors.
Some members are in more than one plan but the number shows the impact on middle-class families of a scandal that widely has been viewed as a problem for the rich and famous.
Workers take up the burden
Shortly after Dec. 11, when Madoff was arrested in New York City, retirees from Carpenters Local 747 received a letter from the Empire State Carpenters Fringe Benefit Funds, which oversees the benefits for Upstate carpenters.
Because of the Madoff scandal, the fund was suspending its monthly annuity checks.
David Davis, a carpenter from Meridian who retired to Florida, said he counts on that check to make his mortgage payment.
Retirees who worked in the union for 35 years received monthly annuity payments of $1,000 to $1,300, he said. The annuity payments come from a fund that the workers contributed to every week for years, he said, not from employers' contributions.
On Feb. 2, a joint fund to benefit members of five operating engineers' locals -- including Local 545 in Syracuse -- notified its members it was suspending many of their health benefits.
The union halted payments for dental treatment, hearing aids, substance abuse treatment, and death and dismemberment, including those benefits for surviving spouses, according to the letter.
Some union officials said they don't yet know the impact.
More than 400 retirees or survivors receiving pension benefits from plumbers Local 73 in Oswego won't see a change in their benefits, said Carroll, the union's business manager.
Instead, employing the strength of a union's numbers, more than 300 plumbers will pick up the burden of paying into the pension funds.
"It's going to affect future benefits. Guys aren't going to be able to retire (at the same age). There's no question something will have to change," he said.
Greg Lancette, business manager of plumbers' Local 267 in Syracuse, said his union knows its pension plan will fall into "critical" status.
The Department of Labor labels a pension plan as critical when it doesn't have enough to pay benefits to current or future retirees. If that happens, the union must submit a plan to beef up the fund. It can require workers to increase their contributions or cut benefits.
Local 267 hired a Delaware law firm that specializes in securities litigation and class action suits to try to recapture its funds.
Many unions officials were unwilling this week to comment on the amount their local lost or how workers and retirees will be affected.
Davis and other carpenters say they've had trouble getting information from Carpenters Council.
"This is the frustrating part," said Doug Cleary, a retired carpenter in North Syracuse. "When you try to ask how much did we lose, and how much did I lose personally, you can't get an answer."
The financial adviser
Jeanneret (pronounced jen-er-RAY), the Syracuse financial adviser, does not take blame for his clients' losses.
Union funds paid Jeanneret $4.4 million in one year to manage their investments, according to the latest federal records. Some unions had hired his firm for decades.
In recent months, Jeanneret has declined in-depth, in-person interviews but has answered a few questions in phone calls. He would not provide a specific figure on the unions' exposure.
Without being specific, Jeanneret said his firm made background checks on Madoff and attempted to verify his trades.
"I met Madoff a lot of times," he said, declining to elaborate. "We visited in person or spoke in telephone conference calls."
Jeanneret steered the unions' money into Master Income Plus fund, an investment fund his firm created and managed. He invested about 38 percent of the fund's assets in Madoff's hedge fund, Jeanneret said.
Jeanneret also persuaded clients to invest in two Beacon Associates hedge funds. About 74 percent of Beacon's assets were with Madoff, according to a suit filed by other Madoff victims.
Accountants at two firms working for the unions confirmed some of the unions' investment in Master Income Trust and Beacon Associates was safe because the hedge funds invested in securities other than Madoff's.
Jeanneret said he was so confident in the Master Income fund that he put nearly all of his company's $2 million pension plan in it.
Like the unions, Jeanneret and his staff have lost 38 percent of their investment in Master Income, he said.
"Do you think if I thought it was a scam I would have invested 100 percent in that fund?" Jeanneret said.
Reach Mike McAndrew at mmca...@syracuse.com or 470-3016. Reach Charley Hannagan at chan...@syracuse.com or 470-2161.

Courtroom applauds as judge denies bail for Madoff

by T he Associated Press
Thursday March 12, 2009, 4:30 PM

Mary Altaffer / The Associated PressBernard Madoff arrives at federal court in New York this morning. He pleaded guilty to charges that he engineered one of the largest investment scams in U.S. history.
Mark Lennihan / The Associated PressDominick and Ronnie Sue Ambrosino enter federal court to attend Bernard Madoff's hearing in New York today. The couple said they are victims of Madoff's Ponzi scheme.
Top links

NEW YORK (AP) -- Bernard Madoff pleaded guilty today to charges that he carried out an epic fraud that robbed investors around the world of billions of dollars, admitting he began operating a giant Ponzi scheme in the early 1990s in response to a recession.
The judge ordered him to jail without bail, prompting a round o f applause in the courtroom.
"I am actually grateful for this opportunity to publicly comment about my crimes, for which I am deeply sorry and ashamed," Madoff told U.S. District Judge Denny Chin.
He said that he started the fraud but that he believed it would be short and he could extricate himself.
"As the years went by, I realized my risk, and this day would inevitably come," he said in a steady voice. "I cannot adequately express how sorry I am for my crimes."
The fraud turned a revered money man into an overnight global disgrace whose name became synonymous with the current economic meltdown.
Madoff described his crimes after he entered a guilty plea to all 11 counts he was charged with, including fraud, perjury, theft from an employee benefit plan, and two counts of international money laundering.
Prosecutors say the disgraced financier, who has spent three months under house arrest in his $7 million in Manhattan penthouse, could face a maximum sentence of 150 years in prison at sentencing, which was set for June 16. He could face up to 150 years in priso n.
The plea came three months after the FBI claimed Madoff admitted to his sons that his once-revered investment fund was all a big lie -- a Ponzi scheme that was in the billions of dollars. Since his arrest in December, the scandal has turned the 70-year-old former Nasdaq chairman into a pariah who has worn a bulletproof vest to court.
The scheme evaporated life fortunes, wiped out charities and apparently pushed at least two investors to commit suicide. Victims big and small were swindled by Madoff, from elderly Florida retirees to actors Kevin Bacon and Kyra Sedgwick and Nobel Peace Prize winner Elie Wiesel.


A Good Credit Score is 700 or Above. See yours in just 2 easy steps!
Reply all
Reply to author
Forward
0 new messages