As more info comes in regarding the Madeoff scheme, news from several sources
say that Madeoff and his clients were the largest bank account holders listed
on a computer disk leaked by a Swiss bank worker regarding US persons with
hidden Swiss bank accounts.
As the IRS approached him regarding the repayment of taxes from his hidden
swiss account, Madeoff reportedly became admamant that his wealth would not be
taxed by the US. He also realized that once the swiss records were exposed
that his and his client's wealth were also within reach of seizure or
judgement by a US court regarding past frauds of him or his clients.
Realizing that he was be certain to arrested on other securities and market
making fraud issues in the near future, insiders say that it was at this point
he made the decision to just say it was all lost in trading and move it
directly to Israel. Insiders also report that he was ready to pay the taxes on
the money in Israel but was adamant that taxes in the US would not be paid nor
would any of the money be available for US court judgements in subprime,
fraudlent trading and misrepresentation charges in the future.
Sources say that most of his and his clients wealth were gained through
issuing subprime mortgages to unqualified borrowers and then tranching the
mortgages into CDOs and circulating the CDOs among US pension funds including
GM, GE, IBM and Califorina's State pension fund. Some of the wealth was also
gotten through investments in Vegas housing sub divisions and Miami condo
projects at the height of the real estate bubble.
Finally, sources say that the wealth from Madeoff's has been fully transfered
to Israel and that "most if not all of the clients have been made aware" that
their money is available to them in Israel and that it was felt that this was
a necessary measure in protecting certain high level clients in the face of a
collapse of the USA.
A European bank executive has said early this morning that the Banks involved
in Madeoff's fund were exposed through loads and leveraging and that these
loans will be repaid in full from Israel.
All of the charities involved have Israeli offices, so they also are of an
understanding that their money is now available there.
Sources say that Madeoff has a base in Israel and that he will offer all
clients his services there as a continuem to his services in New York.
Speculation has it that he is advising transfer of client's funds into
physical gold holdings in coded safety deposit boxes. This advise jives with
the notion that the money needed to be taken out of the US on fear of
collapsing US dollar and seizure of funds by IRS and courts for frauds
committed during the sub prime bubble.
The Swiss bank client leak has caused these banks to no longer be viable
avenues for asset concealment.
Madeoff's clients are not just in the US. He has moved funds to Israel for
clients in Russia, France, England and Swiss in the scheme in which he is
Some insiders are saying the amount involved may be closer to $100 Billion.