Special Reports
Who’s behind Madoff?
By Wayne Madsen
Online Journal Contributing Writer


Feb 19, 2009, 00:21

(WMR) -- As the Securities and Exchange Commission (SEC) announced that it had cut a deal with $50 billion Ponzi scammer Bernard Madoff whereby Madoff will neither admit nor deny fraud claims against him in a suit brought by the SEC. In return Madoff has agreed to pay civil fines and penalties levied by the SEC. The agreement has no bearing on Madoff’s criminal trial.

WMR has learned that in addition to 20 million documents stored by Madoff in a warehouse in Queens that were stored without any indexing system and merely placed in boxes and strewn around the floor are millions of additional documents that were stored by Madoff in a Brooklyn warehouse that was partially flooded. A number of the Madoff documents there were destroyed by water damage.

WMR has also learned that a key element in Madoff’s Ponzi scheme was Madoff Energy LLC, formed as a Delaware corporation in February 2007. Other Madoff firms in the energy arena were Madoff Energy Holdings LLC, Madoff Energy III LLC, and Madoff Energy IV LLC. There are links between these now-defunct Madoff energy entities and Texas oil and natural gas industry interests, some close to the Bushes and Dick Cheney.

WMR has also learned that the kid glove treatment given by federal authorities to Madoff, including allowing him to remain in his Upper East Side luxury town home, is because Madoff’s Ponzi scheme was part of a much larger operation, one involving top officials of both the George W. Bush and Barack Obama administrations, as well as the notorious Russian-Israeli Mafia.

One of the investors in Madoff’s scam was, according to the published list of Madoff “victims,” was the Bank of New York (BONY) and a contrivance called the “Alternate Investment Service.” BONY was the subject of a previous detailed WMR report on the activities of the Russian-Israeli mob:

“Forest Hills has been identified by the FBI as a major center for both the Russian-Israeli Mafia and Mossad and it is a place where the two interests often cooperate. In 2002, OPERATION SPIDERWEB, a joint FBI-EUROPOL operation, resulted in the arrest of 20 Russian-Israeli dual citizens on charges of money laundering. The laundering primarily involved the Bank of New York (BONY), the Russian bank Menatep, and an ‘Internet bank’ called the European Union Bank. More importantly, the money-laundering network also included Benex, a firm connected to Bill Clinton-pardoned Mossad figure Marc Rich, who still resides primarily in Switzerland. . . . Benex’s office was located on Queens Boulevard in Forest Hills in the same building where Grigori Loutchansky headquartered two of his companies. Loutchansky is a Latvian-born Israeli who laundered billions through his Vienna-based NORDEX firm. National Security Agency (NSA) signals intercepts have reportedly yielded intelligence on Loutchansky’s role in the smuggling of nuclear materials. Loutchansky also was closely linked to Clinton’s 1996 re-election campaign through New York real estate magnate and Democratic donor Sam Dombs. . . . Forest Hills was also the hometown of international diamond dealer Yehuda Abraham, convicted in a plot to smuggle surface-to-air missile launchers from Russia into the United States, a mere four months after 9/11, and launder the proceeds from the deal through Malaysia. The network was discovered to have links with the Viktor Bout weapons smuggling network and money laundering facilities linked to ‘Al Qaeda’ Southeast Asia affiliate Jemaah Islamiyah. Abraham, an Afghan Jew, was linked not only to Mossad but to the Saudi Royal Family.”

Obama’s attorney general, Eric Holder, was the Clinton administration’s deputy attorney general who approved the eleventh hour Clinton pardon for Rich.

Another Madoff investor was Mellon Financial Services. On July 8, 2008, WMR reported:

“A February 27, 2008, truck theft of backup data tapes from Bank of New York Mellon Corporation’s Jersey City Shareholder Services unit has the hallmarks of an organized crime heist. Shareholders of the Walt Disney Company, John Hancock Financial Services (a division of Manulife Financial Corporation), People’s United Bank of Connecticut, and the Bank of New York were informed that their stock sale transactions may have been compromised.”

Obama’s Middle East envoy, George Mitchell, is a former chairman of the Board of the Walt Disney Company.

WMR has learned from a U.S. intelligence source in the Middle East that much of the $50 billion scammed by Madoff is now in Israeli banks and other financial contrivances established to secretly launder the ill-gotten loot. The Madoff Ponzi scheme may also be linked to the revelations by former Liechtenstein LGT bank employee Heinrich Kieber of secret off-shore accounts held by tax-evading politicians and businessmen in the United States and other countries, as well as the Clearstream entity in Luxembourg that involved allegations of a slush fund used to finance the political ambitions of France’s neocon president, Nicolas Sarkozy, and other right-wing politicians.

Harry Markopolos, a former investment manager-turned-investigator, recently told the U. S. House Financial Services Subcommittee that the SEC failed to take action against Madoff when Markopolos repeatedly warned the regulatory agency of the Ponzi scheme activities of Madoff, a former chairman of NASDAQ. The hearing at which Markopolos testified was chaired by Rep. Gary Ackerman (D-NY), whose 5th congressional district adjoins the 9th congressional district of Forest Hills and Rego Park, a nexus for Russian-Israeli mob activity in the New York City area.

On February 9, the SEC announced that Linda Thomsen, the agency’s top enforcement official, was resigning to “pursue opportunities in the private sector.”

Previously published in the Wayne Madsen Report.

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