New Allegations in Madoff Case Against $1 Billion 'Enablers'
Bankruptcy trustee accuses feeder fund's Walter Noel of 'aiding, abetting' scam.
July 21, 2010 — -- One of Greenwich, Connecticut's wealthiest and most socially prominent financiers, Walter Noel, was accused today of "aiding, abetting, enabling and substantially participating" in Bernard Madoff's legendary Ponzi scheme.
The allegations came in a complaint filed by the Madoff Bankruptcy Trustee against Noel and others who worked with him at the Fairfield-Greenwich investment fund, including one of his daughters and at least two sons-in-law.
According to the complaint, Noel and others collected more than one billion dollars in fees while ignoring evidence of Madoff's fraud for years and lying about their concerns to investors who lost everything in the scam.
The bankruptcy trustee says Noel and the others "have all been unjustly enriched" and wants the money in fees, salaries and bonuses returned so it can be distributed to Madoff customers.
A statement from Fairfield-Greenwich said the complaint "is replete with false, misleading and rehashed accusations." The statement added, "We are outraged that Mr. Picard has chosen to characterize a number of so-called 'red flags' -- warning signals apparent only in hindsight -- as evidence that Fairfield Greenwich participated in the Madoff fraud."
Prior to the scandal, Noel, his wife and his five strikingly beautiful daughters were regulars in high society in Greenwich and New York city. They and their sprawling retreat on the island of Mustique was the subject of a flattering profile in Town and Country magazine.
The complaint says the motivation of one of Noel's wealthy sons-in-law, Andres Piedrahita, was "do nothing that might upset the Madoff relationship that made his lavish lifestyle possible. His motivation was one of limitless greed, without regard for any interest other than his own."
After the collapse of Madoff, Piedrahita and his wife sold their American home "and moved from country to country after Piedrahita took delivery of a $12 million yacht," according to the complaint.
Noel's partner, Jeffrey Tucker, was described in the comlplaint as becoming "exceptionally wealthy" with "prized racehorses, private jets and luxurious mansions" due to what was described as the firm's "de facto partnership with Madoff."
Noel, Tucker and others in the Fairfield Greenwich firm had previously denied any knowledge of the Madoff scheme and said they and their investors were victims of the crime.
"They were not victims," said the trustee in the complaint. "They were enablers. They were facilitators."
The trustee alleges "Madoff could not have survived, much less prosp0ered for as long as he did without the defendants' substantial assistance."
The complaint cites dozens of internal Fairfield-Greenwich e-mails to bolster its case that the executives looked the other way when red flags and warning signs arose.
In some cases, according to the complaint, Noel and others schemed to make sure their investors were kept far away from Madoff, "making false excuses when the investors requested meetings with Madoff."
"Bernie investors do not need transparency," read one Fairfield-Greenwich e-mail message in 2003. The company held strategy sessions on the need to "haze up the details" for investors and hold "heavily scripted investor teleconferences."
The complaint also reveals that one of Fairfield-Greenwich's consultants, Gil Berman, warned the company that Madoff might be a fraud but that executives "ignored Berman's recommendation."
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Fairfield-Greenwich is now in liquidation.
In a parting shot, the complaint alleges, "The defendants also knew that without Madoff they could not survive. The funds the defendants tried to create without Madoff's assistance, making their own choices bout which investment managers to place money, were all failures."