David C. Farmer, Trustee vs. Harmon - Witness J. Ezra Merkin

David C. Farmer, Successor-Trustee vs. Harmon

(Formerly Woo vs. Harmon & Nicholson vs. Harmon)

CV05-00030 DAE KSC

U.S. District Court For the District of Hawaii

Judges: David A. Ezra; Kevin S. Chang

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DEFENDANT’S WITNESS

J. EZRA MERKIN

Address to be determined.

From Wikipedia:

Jacob Ezra Merkin (born 1954) is an American money manager, financier and philanthropist. He is the Chairman of GMAC and the general partner of Gabriel Capital LP, a $5 billion family of hedge funds. He is the son of prominent banker and philanthropist Hermann Merkin and author Ursula Merkin, and the brother of writer Daphne Merkin.

Merkin manages Ascot Partners LP, a hedge fund which was valued at $1.8 billion prior to the collapse of Bernard L. Madoff Investment Securities LLC. He is a significant partner in Cerberus Capital Management and co-manages securities with Stephen Feinberg.

http://en.wikipedia.org/wiki/J._Ezra_Merkin

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NEW DISCOVERY (01-04-09): More undisclosed conflicts of interest between Trustee David C. Farmer, James Nicholson, Steven Guttman, Joshua Gotbaum, Judith Neustadter Fuqua, Linda Lingle, Jack Abramoff, AIPAC, Barack Obama, Bill Clinton, Hillary Clinton, Rahm Emanuel, Michael Mukasey, Bishop Estate, Goldman Sachs, Robert Rubin, Henry Paulson, The Nature Conservancy, Faye Kurren, Judge Barry Kurren, Judge David Ezra, OHA, Bernard Madoff, J. Ezra Merkin, GMAC, Cerberus Capital Management, Robert Katz, etc.:

December 25, 2008

J. Ezra Merkin Ordered Not To Destroy Records

by Darren

J. Ezra Merkin has been ordered to not destroy any financial records related to the dealings of Bernard J. Madoff. Merkin is the chairman of GMAC who runs several hedge funds which invested with Madoff. The dealings came to light when one of Merkin’s clients, New York University, learned that Merkin had lost $24 million of their capital.

The suit claims that Merkin and his hedge fund, Ariel Fund Ltd. and its’ management group Gabriel Capital Corporation, failed on their responsibility of cash management by turning the money over to Madoff for investment. The Ariel Fund Ltd has already announced plans to liquidate their holdings in light of the recent scandal. The suit also mentions Fortis, who partnered with Merkin in the creation of Ariel Fund Ltd. All told, NYU had invested a staggering $94 million into the fund.

As the losses come in from the Madoff scam, the elite of New York City Jewish philanthropy are among the victims, as well as helping to perpetrate the fraud. Merkin is the grandson of Hermann Merkin who was known as a titan of Jewish philanthropy. He donated gave millions to help build Yeshiva University, and the Fifth Avenue Synagogue.

Human loss mounts in Madoff Ponzi Scheme

The human expense of the Madoff scheme is mounting. Charitable foundations and lives have been destroyed. Merkin clearly used his influential position and the capital of Yeshiva University to invest $1.8 billion into Bernard Madoff’s firm.

That was little consolation, however, to Yeshiva University, said to have lost $110 million of its endowment; or to Congregation Kehilath Jeshurun, the Ramaz School of Manhattan and SAR Academy in Riverdale, said to have lost substantial sums; or to several family foundations belonging to Merkin’s fellow trustees at Yeshiva University, including Robert M. Beren and Ludwig Bravmann.

Another Ascot casualty was a charitable trust founded by real-estate magnate Mortimer Zuckerman, the chairman of real-estate firm Boston Properties and owner of the New York Daily News and U.S. News & World Report. That lost $30 million.

NYU said Merkin blindly turned the money over to Madoff.

“Without making disclosures in the quarterly reports to investors, and in the face of an extraordinary number of ‘red flags,’ Merkin, for years, simply turned over a substantial portion of Ariel’s funds to Madoff,” said NYU in their complaint.

Merkin has so far denied wrongdoing, laying the blame squarely on Madoff.

“Mr. Merkin remains committed to obtaining for shareholders the best results possible in the wake of the terrible fraud committed by Bernard Madoff,” Andrew Levander, attorney for J. Ezra Merkin said.

Madoff has caused huge damage to the work of Jewish philanthropic organizations

It’s safe to say the the amount of damage to Jewish philanthropic organizations is significant....

Superior Investor

http://www.kycs.AIPAC.htm

http://www.youtube.com/watch?v=U_yA8J-oGQk

http://www.kycbs.net/Jews-Control-America.mht

http://www.voy.com/129276/1273.html

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December 17. 2008

SEC Chairman says agency failed to investigate Madoff

Associated Press - Yahoo News

WASHINGTON – Securities and Exchange Commission chairman Christopher Cox said Tuesday his agency repeatedly failed for at least a decade to pursue allegations of wrongdoing by Wall Street figure Bernard L. Madoff, the alleged perpetrator of a $50 billion Ponzi scheme.

Cox ordered a probe by the SEC's inspector general, saying the agency's staff had never brought the Madoff matter to the attention of commissioners.

Since the SEC staff never recommended that the commission open a formal investigation, subpoena power was not used to obtain information and the staff relied on information voluntarily produced by Madoff and his firm.

"I am gravely concerned by the apparent multiple failures over at least a decade to thoroughly investigate these allegations or at any point to seek formal authority to pursue them," Cox said in a statement.

In a forceful condemnation of the SEC staff, Cox said there had been credible and specific allegations regarding Madoff's financial wrongdoing going back to at least 1999.

The SEC chairman's criticism of his own agency marks only the latest instance in which federal regulators have overlooked clear warning signs of possible fraud.

Its oversight of the Wall Street investment houses drew significant criticism. A review by the SEC inspector general determined that the agency's monitoring of the five biggest Wall Street firms, which included Bear Stearns, was lacking.

Cox's statement on Madoff was a stunning declaration in a scandal that has produced a series of dramatic developments.

Shock waves from the Madoff affair have radiated around the globe as the number of prestigious charitable foundations, big international banks and individual investors said to have fallen victim to an unprecedented fraud has grown. U.S. investigators are laboring to deconstruct the scheme.

The SEC chairman alleged that Madoff kept several sets of books and false documents, and provided false information involving his advisory activities to investors and to regulators.

Cox also ordered the removal from the ongoing investigation of any SEC staff members who have had contact with Madoff or his family.

Madoff remains free on $10 million bail.

Since his arrest on Thursday, the SEC has been under increasing pressure to explain why it didn't uncover the prominent Wall Street figure's criminal activity years ago.

Hours before Cox denounced his own staff, a former SEC chief accountant, Lynn Turner, said that "I can't comprehend how a well-run investigation would have missed a fraud of this magnitude."

Another expert agreed. "The fact that that this could go on for so long with someone who was known to the agency raises questions of the effectiveness of our regulatory scheme," said Charles Elson, the director of the Weinberg Center for Corporate Governance at the University of Delaware.

The SEC's enforcement division looked into Madoff's business in 2007. The agency did not refer the matter to commissioners for legal action. What did the investigators find and why didn't they look harder? Until Tuesday night, the SEC had refused to say anything beyond a brief statement it issued Friday revealing the 2007 probe.

Cox himself has come in for strong criticism.

In March, a few days before Bear Stearns nearly collapsed into bankruptcy, Cox told reporters the agency was closely monitoring the five firms and had "a good deal of comfort" in their capital levels. Then as federal officials orchestrated the rescue, Bear Stearns was bought by rival JPMorgan Chase with a $29 billion government backstop.

The chairman of the Senate Banking panel that oversees the SEC, Sen. Jack Reed, D-R.I., said in an interview Tuesday that the Madoff affair "illustrates the lack of credible enforcement over several years by the SEC." He criticized the agency's "lack of a strong commitment to be vigilant."

In the Madoff case, a securities executive, Harry Markopolos, complained to the SEC's Boston office in May 1999. Markopolos told the SEC staff they should investigate Madoff because he felt it was impossible for the kind of profit he was making to have been gained legally.

But the SEC's Boston office has itself been accused in the past of brushing off a whistle-blower's legitimate complaints, in a case that led the head of that office to resign in 2003. The whistle-blower, Peter Scannell, eventually persuaded state regulators and the SEC to act against mutual fund giant Putnam Investments, where Scannell worked.

"It's flabbergasting that nobody can nail the bums in the SEC who turn their back on and/or aid and abet people who defraud investors," Scannell said in a telephone interview Monday.

Before Tuesday, Cox said that his agency had taken decisive actions in response to the market turmoil, including an unprecedented temporary ban this fall on short-selling of stocks of financial companies. The SEC also has procured billions of dollars in settlements with big investment banks that have agreed to buy back auction-rate securities from investors hurt by the collapse of that market in February. Auction rate securities are debt instruments, typically issued by a municipality, in which the yield is reset on each payment date via a Dutch auction, a method of selling in which the price is reduced until a buyer is found.

http://news.yahoo.com/s/ap/20081217/ap_on_bi_ge/madoff_scandal

December 16, 2008

THE FINTAG NEWSLETTER

Madoff part 2.

Last Thursday the news broke and it hardly registered a blip on the news radar. Today we face financial meltdown of the hedge fund industry and the loss of tens of billions of dollars and the destruction of livelihoods.

Yesterday I looked critically at the investors who had not read the prospectuses or carried proper due diligence. The problem with Madman Madoff's funds is you could only touch them by investing through feeder funds. These feeder funds were promoted by interested parties who put layers of fees on top and sold them as proper fund of funds.

Take the Fairfield Sentry fund. It has a proper Auditor - PWC, an administrator and a custodian - Citco. It is a BVI fund and is managed by a well known Investment Manager. So far, so good. Ok, the custodian only looks after 5% of the assets (the other 95% are looked after by Madoff) but unless you like reading small print it looks like fine.

The biographies of the managers are respectable, including Jeffrey Tucker who used to work as a lawyer for the SEC. The fund has a board including 2 directors located in risk adverse Switzerland. One of the directors is not paid which is strange but I guess he must be paid elsewhere. Thankfully, Goldman Sachs is a sub custodian although I think Refco must have been a misprint.

The Investment objective is "The Fund seeks to obtain capital appreciation of its assets principally through the utilization of a nontraditional options trading strategy described as "split strike conversion", to which the Fund allocates the predominant portion of its assets. This strategy has defined risk and profit parameters, which may be ascertained when a particular position is established ..." and sounds quite convincing.

I am not so sure about the Investment Restrictions including "e) no more than 10 percent of the Net Asset Value of the Fund may be invested in securities of countries where immediate repatriation rights are not available;" but I like the fact US citizens are excluded - "The Fund will require as a condition to the acceptance of a subscription that the subscriber represent and warrant that he has a net worth in excess of U.S. $1,000,000 and is not a U.S. person".

The 13 year track record averages in excess of 10% a year and its volatility is very low indeed. The fund has grown and subscriptions exceed redemptions so it must be a popular.

Excellent. So where did it go wrong? Well PWC have some explaining to do. It looks like they never validated the underlying investments. Madoff obviously just gave them the NAVs and they took them as red. Citco's care of duty is to look after the assets and it has done so. Shame it only looked after 5% but that is better than nothing. The manager should perhaps have carried out some proper due diligence on the underlying but then it made so much in fees it got a bit punch drunk.

So there you go. A sound investment run by people who didn't quite do their jobs. I take back all my negative posturing and instead tell you how I see it through a slew of crap cartoons and virals....

http://fintag.com/

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December 16, 2008

Jew Watch

Boca Raton, FL

There is much more to this story:

According to these reports, New York financier Bernard Madoff was the target of Obama Forces as he is believed to have masterminded the financing of Israel’s vast espionage operations in the United States since the 1960’s.

Mr. Madoff, who holds duel citizenship in both the United States and Israel, was apprehended this past week while attempting to flee the United States and move billions of Mossad funds out of New York, and which was thwarted by US District Court Judge Louis Stanton who said ‘the order he issued appeared necessary to prevent Madoff or an agent from moving funds out of the court's jurisdiction and to "preserve the status quo" for whatever may come from future proceedings’.

These reports further state that the powerful US Attorney, and Obama ally, Patrick Fitzgerald was behind the takedown of Madoff and his Mossad backers who Fitzgerald has been investigation since the 2005 arrest of Pentagon Official Lawrence Franklin, and who was charged with passing American Military secrets to the powerful American-Jewish Lobby AIPAC which is known to be one of Mossad’s most powerful front organizations operating in the US.

To the power of the Mossad’s influence of the United States Government through the use of its ‘lobby’s’ we can read:

“The American Israel Public Affairs Committee (AIPAC) which directly lobbies the legislative branch of the U.S. Government

The Conference of Presidents of Major American Jewish Organizations which "is the main contact between the Jewish community and the executive branch" of the U.S. Government Reports from Israel are detailing how the takedown of Madoff by Obama’s Forces are also now affecting the Mossad’s many front operations in the US called foundations, and as we can read as reported by Israel’s Haaretz News Service:

“An alleged $50 billion fraud by Wall Street financier Bernard Madoff has caused deep ripples in the Jewish philanthropic world, forcing the closure of two prominent U.S.-based charities and threatening the financial lifeline of a slew of other groups.

The Chais Family Foundation, a California-based charity group invested entirely with Madoff, was forced to shut down operations on Sunday after years of donating some $12.5 million annually to Jewish causes in Israel and Eastern Europe, the JTA announced.

"I can confirm that the Chais foundation has closed," the JTA quoted Chais President Avraham Infeld as saying on Sunday. "All of its funds were exposed with Mr. Madoff. We have made a decision regrettably and with much pain to close down the foundation."

The Robert I. Lappin Charitable Foundation, a Massachusetts-based group which financed trips for Jewish youth to Israel, was also forced to close on Friday because the money that supported its programs was invested with the former Nasdaq chairman.”

The timing of this takedown of the powerful Mossad backed Jewish Lobby, and its associated spies, by Obama’s Forces, these reports continue, was due to President-Elect Obama’s plans to ‘radically shift’ American foreign policy away from Israeli influence upon his taking office.