The Liquidator
September 27, 2009 5:00 PM
The man in charge of recovering assets from Bernard Madoff says there is about $18 billion still out there that he hopes to recover for victims of the scam. But it won't be easy. Morley Safer reports.
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See all 33 CommentsA Special Prosecutor (opposed by Kishel) would put an end to such corruption.
A Clawback (also opposed by Kishel) would make billions available to creditors.
Kishel this month dispensed creditors? money to Petters' lawyers/advisors as follows:
Lindquist & Vennum $1,194,617.56
Avidity Partners $156,474.46
Neal, Gerber, Eisenberg $274,739.73
C&A Law $15,700.00
KPMG $113,205.00
Moss Barnett $8251.00
Wulsin Murphy $6495.00
Faegre & Benson $162,496.50
$9420.75
Baker & McKenzie $11,277.18
Sutherland Asbill $15,287.28
$3,722.44
Hastings, Janofsky & Walker $797,090.74
For a grand total this month of $2,768,778.14
Is it any wonder why the real victims (the creditors) will never see a dime?
Creditors have two alternatives to keep them from eternal financial damnation; first, the appointment of a Special Prosecutor reporting directly to USAG Holder and a contemporaneous claw back described as follows:
A complete sources and uses of capital must be prepared; that is, from 1995 on with a threshold amount of $50. For definitional purposes, ?Petters et al? is defined as Thomas Petters personally, corporately, and /or in trust for others, regardless of venue. Those subject to this claw back order should consist of Petters et al, all individuals/entities (?Parties et al?), all of whom should divulge all amounts paid or received and when such payments were made or received, Parties et al and Petters et al should also be compelled to produce a full inventory of all real and personal property (including any liens or encumbrances thereon) held by them (solely or jointly with others) personally or corporately and when such property was acquired or sold, all credit card and bank statements (US domiciled and offshore), all check images, all wire transfers, all state and federal tax returns, all maintenance and utility bills, all travel and lodging expenses and any and all business accounting ledgers. Petters and Parties et al subject to this claw back order would include all members of the Petters family, his past and current associates, his or their counsel, all prior investors of Petters who received funds in excess of their contributed capital, all politicians who accepted donations from Petters et al now or past in office, all charitable entities paid by Petters et al, all existing or past involved officers of the state and federal courts (any worldwide venue) who were ever involved with Petters, consisting at a minimum of all judges, magistrates, trustees, receivers, and lawyers within or outside of Minnesota.
This information has already been collected by forensic experts at PriceWaterhouseCoopers and FTI but receiver Doug Kelley will not disclose any such forensic discoveries; ergo, the urgent need for both a special prosecutor and a ?claw back?.
Petters victims have been paid $0 so far, with the courts now paying Petters, his cronies, their lawyers now over $2 million per month and creditors have no say in the matter.
Petters is still in control and will receive at least $3.65 billion back from his lawyers in laundered cash after he is released.
Because the media failed to report the whole story, Petters will get to keep every dime he swindled.
In the final analysis, crime has indeed paid for Petters.
Picard/Sheehan are doing a ?follow the money? investigation as part of a formalized ?clawback? which is allowed under the law. The intent here is to return monies swindled by Madoff to the creditors in this multi-billion Ponzi scheme.
The Picard/Sheehan counterparts here in Minnesota are Receiver Doug Kelley and trustee John Stoebner who are doing a ?follow the money? investigation with a slightly different twist; that is, to locate, liquidate, and return all liquidated cash back to Petters, his family, his cronies, their lawyers, Kelley, Stoebner, and the many other officers of the courts and the politicians Petters has paid so they could be there for Petters when he needed them. An earlier comment posted on this website revealed that Petters called a US Senator the day Petters was arrested demanding that he be released. This particular Senator knowingly took $75,000 of Ponzi monies from Petters to get elected to the United States Senate.
It actually gets worse: Receiver Doug Kelley has gone consistently on the record asserting that ?creditors come last? which means that he will pay himself, Petters, all of their respective cronies, all of their lawyers (the lawyers alone are being paid by Kelley at a rate of over $1 million/month) and all the judges and politicians Petters "bought" over two decades to "look the other way".
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Difference is - you are now (purportedly) being dealt the final blow in a "legal" mannerism.
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The Reality is - you are being screwed - yet again - by the good ole boys club.
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Take the above mentioned Petters case. Doug Kelley (a former US Attorney) was working for Petters Group Worldwide (PGW) when the FBI raided Petters companies. Doug Kelley told the press that the creditors issues come last and the company mainstay is the priority.
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THEN
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Chicago appointed a Receiver due to the Lancelot issues.
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Whereby MN responded and illicity appointed Doug Kelley as the Federal Receiver - (basically saying Petters companies are in our good ole boys back yard and you must stay away).
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It was a huge conflict of interest and illegal to appoint Doug Kelley as Receiver - so the Magistrate Justice (Montgomery) simply created her own Law and stipulated Doug Kelley had Judicial Immunity.
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Then - as if such were candy from a story - Judge Montgomery gave the Frank Vennes Receiver (Hansen) Judicial Immunity as well. Frank Vennes was never arrested or charged - so under what Law anywhere can there be legal framework for a Receiver?
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NONE
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Yet Doug Kelley and Hansen with their annointed have already rec'd over $10 million in fees to sell Petters assets in a sham process (such as Polaroid being sold to the 2nd highest bidder)
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I am Laser Haas - a/k/a Laser the Liquidator - the Court appointed in eToys and over 1000 other liquidations over $2 billion in assets - so I am amply qualified to know a sham sale process when I see one.
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The American public has no idea how it is a fact that the US Trustee's office is a misnomer and that police force should be disbanded. The Bankruptcy Courts have become a big biz machine (just ask www.lopucki.com UCLA Law Prof who has it Right)
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Federal Receiverships and State Court Receivers are the worst - for they are Only suppose to exist once a Federal or State agency wins - through due process - such as IRS, SEC or FDIC - in State through a bank lien that was legally perfected based on UCC1 Law.
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Now in Petters, Dreier and other cases - a Receiver is being appointed once a charge occurs and the assets are being sold prior to conviction or guilty pleas.
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Such is a travesty of Justice and a formula for tyranny and corruption most high!
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As is documented by the Petters case.
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Exactly where does one find the legal basis for Judicial Immunity to be given out ad hoc?
How many in Minnesota and even Washington are still protecting Petters and why?
No one is protecting Madoff in New York, and no one in authority in Minnesota or Washington will answer these questions because the evidence shows that they all took Ponzi money from Petters to "look the other way". One of them, a US Senator, even got elected with money stolen by Petters, reported by the Minneapolis Star Tribune. This Senator was the first person Petters called the day of his arrest in September, 2008.
Will any of this ever be lawfully adjudicated or, paraphrasing Lou Dobbs, is it asking too much to expect honor in government?
HOW MANY IN MINNESOTA AND EVEN WASHINGTON ARE STILL PROTECTING PETTERS AND WHY? NOONE IS PROTECTING MADOFF IN NEW YORK, AND NOONE IN AUTHORITY IN MINNESOTA OR WASHINGTON WILL ANSWER THESE QUESTIONS BECAUSE THE EVIDENCE SHOWS THAT THEY ALL TOOK PONZI MONEY FROM PETTERS TO "LOOK THE OTHER WAY".
This information has already been collected by forensic experts at PriceWaterhouseCoopers and FTI but receiver Doug Kelley will not disclose any such forensic discoveries; ergo, the urgent need for a ?claw back?.
Why is this?
Both the US District and Bankruptcy Courts, in a massive Ponzi scheme orchestrated by Thomas Petters of Minneapolis, Minnesota, will not allow creditor?s forensic discovery exacerbated in large part by an apparently unappealable statement on the part of Receiver Doug Kelley (who the courts are protecting) that ?creditors come last?, further exacerbated by bankruptcy judge Kishel who refuses to prosecute the lawyers and trustee now assigned to the Polaroid matter.
Now that Polaroid is back in bankruptcy, judge Kishel, perpetually reminded of all of this, has thrown out dozens of requests of relief pled by victim-creditor (and other creditors) at the request of trustee Stoebner whose sordid and criminal past is apparently meaningless to the Kishel court. Kishel's last order was entered 4 November, 2009.
This LATEST KISHEL ORDER will allow Stoebner/Petters to again swindle victim-creditor, this time for $47,802,808.12, as of November 1, 2009.
For over a decade now, both US District and Bankruptcy courts have consistently refused to furnish victim-creditor and other creditors with the forensic discoveries reached by the forensic experts who have been hired (with creditor money) to locate all properties and monies which are a part of this $3.65 billion Ponzi scheme. This particular writer-victim was not only refused discovery but was ordered never to ask for the return of his money again and was then jailed for reporting the crime. The same judge who refused and jailed this creditor for asking for his money back in 2002, jailed Petters in 2008 on 20 counts of fraud. Writer-victim is curious why this judge refused to prosecute Petters at creditor?s request in 2002, throw him in jail for reporting the crime, and then indicted Petters six years later for the same crimes reported (by the creditor) in 2002.
What Irving Picard, the Madoff trustee, is doing in New York, is the lawful thing to do but would never be allowed here in the Minnesota district. The judges won?t allow it, the US Attorney won?t allow it, nor will USAG Eric Holder, all of whom are keenly aware of what is going on.
In closing, one must ask the most obvious question; that is, if claw back is underway in New York, why is it that none of this is going on in Minnesota? Could it be that the ?political and judicial clout? about which Petters has long boasted is standing in the way of such a move? If a claw back ever took place in Minnesota, Petters, his cronies, his lawyers, and all the judges and politicians he ?bought? over the past two decades would not only be cutoff but would be expected to start writing checks for all amounts paid them over the past 20 years.
Writer-victim realizes that most of this report may be viewed as offensive (government is supposed to protect us) but nonetheless, it is true and validated by the record. Writer-victim , in 2001, with the cooperation of two United States Senators, was told by the Minneapolis FBI that our Minnesota District is judicially corrupt and those comments were echoed shortly thereafter by United States Attorney General John D. Ashcroft, in remarks to the Second Global Forum on Fighting Corruption, where Ashcroft opined as follows:
"Corruption in the agencies charged with enforcing our laws not only threatens communities by allowing dangerous criminals to roam free, it also undermines the confidence of our citizens in law enforcement and the criminal justice system. The same is true with respect to judicial corruption. We must all, in our own countries, lead the fight to ensure integrity within our police and judicial systems. Bankruptcy court corruption is not just a matter of bankruptcy trustees in collusion with corrupt bankruptcy judges. The corruption is supported, and justice hindered by high ranking officials in the United States Trustee Program. The corruption has advanced to punishing any and all who mention the criminal acts of trustees and ?organized crime? operating through the United States Bankruptcy Courts. As though greed is not enough, the trustees, in collusion with others, intentionally go forth to destroy lives. Exemptions provided by law are denied debtors. Cases are intentionally and unreasonably kept open for years. Parties in cases are sanctioned to discourage them from pursuing justice. Contempt of court powers are misused to coerce litigants into agreeing with extortion demands.?
Where do we go from here? A true ?follow the money? investigation suggested by Picard/Sheehan in the above-referenced video should be conducted under the control of a special prosecutor here in Minnesota- this will be unpopular with the courts and all those who took Ponzi money from Petters. In short, it?s payback time, but in order to get there, some judges may have to step away.
Picard and Attorney Sheehan are working to retrieve the stolen goods. Operative word: working
When cops arrest a house burglar and the burglar has already spent the money he stole on meth, do the victims say to the cops, "Well, you should feel bad and pay me what that burglar stole?" The cop's job is to track down the burglar, not make restitution. Same with Sheehan and Picard -- they're doing their jobs.
Give me a break sfoken
The "clawback" provision goes after "ill-gotten" gains of investors who were lucky (or smart) enough to bail out early, before the Madoff scheme collapsed.
What of a homebuyer who got a good deal in the 80s or 90s, saw his property double or triple in value, and sold before the bubble burst? Is his return on investment an "ill-gotten" gain? Why, or why not?
Take the scenario of a person who puts $100,000 in a Goldman Sachs brokerage account and the broker buys the client a 30 year U.S. Treasury Note paying 5% interest. Each month, the client gets a statement showing the broker has the U.S. Treasury Note ?safely in-custody? and the client responsibly withdraws only the interest payments from the account to cover taxes and living expenses. After twenty years, the client would have withdrawn $100,000. In year twenty-one, it is discovered that Goldman Sachs is really a Ponzi scheme. Under Picard?s rule, this person would not receive ANY compensation from the SIPC.
I thought that the whole point of the SIPC is so the average investor doesn?t have to worry about such a situation. Public policy is served by the government guarantee.
In the old days, one could take possession of the securities directly and put them in a safe deposit box, but recent changes in custody rules now make it impossible to actually get physical certificates. Taking physical possession is actually no longer even an option.
If the rule Irving Picard wants followed is upheld in court, then as far as I can determine, the only way for a prudent investor to protect himself would be to close all of their accounts every year and open new accounts somewhere else. That would ?reset? the clock, so to speak, and ?renew? the SIPC guarantee. This makes no sense and again defeats the public policy purpose of SIPC and FDIC. The Picard rule creates a world like 1929 in which there is no reliable government guarantee and hence no reason to trust the system!
Why are we locking up Madoff, He should be placed in CIA or FBI Custody and made to work for one or the other.
This guy for year's did what he did, some one knew about it?
He murdered whom? Did he kill any one? Is he a child molester?
So locking him up for 150 years is doing what?
He should tell how he pulled the wool over
the eye's of those who could not see(?) what for years he did.
He should be put to work but not behind bars,
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