The Picower/Madoff settlement: Fooling some of the people all of the time…

Basically, my headline The Picower Madoff settlement: A $7.2 Billion Whitewash is proving correct. As I write this, the 5th most popular article on the webzine of influential Jewish periodical The Forward is In New Madoff Filings, Largest Beneficiary of Fraud Was Possibly Unaware of Ponzi Scheme by Josh Nathan-Kazis December 22, 2010

Jeffry Picower, the late investor who earned more than even Bernard Madoff did from the fraudster’s huge Ponzi scheme, has long been accused by the court appointed trustee in the Madoff case of knowing the operation was a fraud. But a new filing by the trustee following his settlement with the Picower estate suggests that Picower may just have been an innocent Madoff victim after all.

This is utterly ludicrous, as I noted in The Picower settlement: Racketeering Rewarded: Allan Dodds Frank’s fine article pointing out of the $2.2 billion forfeiture to the Fed:

The U.S. government can only force forfeiture in cases where they can tie the money to “specified unlawful activity or a conspiracy to commit such an offense.”

is conclusive, quite apart from the wild activities noted in the Trustee’s suit (and not subsequently retracted).

But a consequence, Barbara Picower is getting sanctified. See this credulous outpouring. Some idiot has even nominated her ‘person of the year”.

Not everyone is dumb however. Over at Forbes, Nathan Vardi, whose shrewd account of the Carl Shapiro settlement I have previously applauded, smells the coffee. In $7.2 Billion Settlement Against Madoff’s Mystery Man Dec 17 2010 he summarizes

The settlement, reached with his widow and childhood sweetheart Barbara today, will probably leave her with the $200 million her late husband left her in his will. Picower’s estate will also probably have plenty of money left over to fund a new charitable foundation …It appears that Barbara, 67, will resume her life as a philanthropic heavyweight…

…while Picower’s widow is agreeing to cough up $7.2 billion, which is equal to the net amount Picower took out of the Ponzi scheme, the returns Picower was able to achieve by investing those funds will continue to be controlled by his estate. In other words, Jeffry Picower, who used Madoff’s investment firm like a bank, got a $7.2 billion no-interest loan from other Madoff investors.

(My emphasis.)

Serious students of the Madoff matter will find it worthwhile to read my altercations with the Picower Madoff Settlement’s designated Troll, here and here.

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