bernie madoff

The world's most accomplished Ponzi schemer -- right up until he got caught, that is -- finally lost his beach home. Bernie Madoff's Montauk house moved for $9.41 million, according to the U.S. Marshals Service, more than the $8.75 million for which it was listed. It sold on Friday, and the buyer is not being named. It only took a month to make the transaction happen.

Joseph Guccione, U.S. Marshal for the Southern District of New York, calls this "another step forward for the government," and though he didn't mention anything about the victims, one assumes that it's progress for them, too. After all, it would be nice if they got even a taste of this cash.

Several bidders tried to get their hands on Madoff's former home, which measures 3,000 square feet and has four bedrooms and three bathrooms. The losers can have another shot at Madoff glory, though, as properties in New York and Palm Beach, Florida, are listed. The former is on the market for $9.9 million, and the latter is listed for $8.49 million.

Madoff was unable to take a last walk through the halls of the Long Island residence, of course, because he's otherwise detained committed in Butner, North Carolina. But, he's adapting, having already thrown down on the block and earned himself some props.

Another tiny dent soon will been made in the repayment of the funds owed to those duped by Bernie Madoff. His 3,000-square-foot Montauk, N.Y., beach house sold this week in an all-cash deal for more than the $8.75 million asking price. Neither the buyer's name nor the exact amount of the sale has been released. The four-bedroom, three-bath home is located on 182 feet of prime beach property.

The house was only on the market a few weeks. See more about the house, and more photos, in this story my colleague Deidre did on September 1, and check out this New York Times slideshow.

"Too Good to Be True" is a new book by Erin Arvedlund which chronicles the catastrophic fraud committed by Bernard Madoff over the last no-one-knows-how-many years.

Arvedlund wrote a Barron's article back in 2001 called "Don't Ask, Don't Tell" questioning the magical returns of Madoff's so-called "hedge fund," which is now widely accepted to have been the largest, most outrageous, most ginormously craptastic, how-do-I-express-without-cursing Ponzi scheme in history.

"Her article in Barron's, based on more than one hundred interviews, could have prevented a lot of misery, had the SEC followed up," boasts the jacket of her new book "Too Good to be True," which was released August 11.

I didn't know what to make of the book at first; it seemed to read somewhat Biblically -- a lot of begetting (who Madoff knew, how he knew them, etc.) and not a lot of action. For the first 100 pages or so I kept thinking "Arvedlund had better sex this up," especially considering the number of other books on Madoff, including the highly anticipated "Madoff's Other Secret: Love, Money, Bernie, and Me" by his mistress, Sheryl Weinstein, released August 25.

Well, if money is your porn, you won't get through this book without removing an article of clothing.

The book slowly becomes a whodunit, naming both names and numbers and ultimately presenting the unsatisfying fact that Madoff got away with one of the oldest tricks in the book -- the same trick relied upon by everyone from white collar criminals to wedding crashers and underage drinkers -- he pretended nothing was wrong, and so nobody asked him any questions.

As the story picks up, it becomes the heroic tale of Harry Markopolos, whom Arvedlund wisely and perhaps correctly dubs an Everyman; "a straightforward American guy who liked numbers." This man practically gift-wrapped red flags and hand-delivered them to the SEC for a decade preceding Bernard Madoff's arrest. Reading, I felt a discouragement with our country's level of corruption I haven't felt since I watched Michael Moore's damning portrait of war and the oil industry, "Fahrenheit 9/11." The SEC was created during the Great Depression to regulate our financial industry, but, according to Arvedlund, it's being run by a bunch of early-career lawyers who don't want to step on anyone's toes -- and who were getting their financial advice from Uncle Bernie himself.

The book has no mercy on Madoff -- there is no point at which we are expected to believe in him. It simply relays the facts like an obituary; one which gets juicier and juicier as it exposes the cyclone of fraud which took place. It was executed in such simple and easily understandable ways -- virtually the whole scheme seems to have relied upon Madoff's refusal to upgrade an archaic computer system which required one to enter stock price data manually. "Entering the data by hand [Robert] MacMahon noted, meant that the person doing it could put in whatever they wanted," writes Arvedlund. As you probably already know, Bernie found himself in the business of making up numbers. The book purports that he created monthly statements by going back over the last month's market and seeing what he would have had to trade to make the profit he claimed to have made (which I'm guessing someone else probably did for him while he was in France, buying his third boat).

The book recounts the aftermath well; the suicides, the testimonials in court (left me wanting more), and delicately suggests other individuals who could be to blame; for example Michael Bienes, who did a lot of recruiting for Madoff -- a pointed final statement in the section about him says "At the time of this writing, no one has sued Bienes over his ties to Madoff."

"Too Good to Be True" will appeal to both the savvier members of the financial community who knew (or should have known) better than to trust Madoff, and to the underdogs and mom-and-pops who were (or might have been) swindled. The lesson is clear: no one should be so well-respected that they don't have to answer questions, and if everyone pretends they understand something they don't so as to appear sophisticated, or they accept being kept in the dark about the means so long as the ends are 10-20+ percent, villains like Madoff will always be able to take advantage of that pride and greed -- not to say that his victims were guilty of either; it's the feeder funds and his recruiters at whom we should all be looking. And, of course, probably his family and everyone else who worked alongside his IBM AS/400.

In these economic times, most of us have had a taste of what it's like to lose money, and it's easy to identify with Madoff's victims. I found myself choked up at the end of the book -- not because the damages will perhaps never be repaid, not because our country seems to constantly wager the well-being of its citizens (I'm speaking of the SEC dot gov's alleged shameless favoritism), but because although he was one of the most well-connected, powerful, and untouchable figures in the world, they got him. It took the collapse of the financial market, but they finally, finally got him.

Well done to Arvedlund for telling the story clearly and with more facts than most of us knew were available. "Too Good to Be True" is available from Amazon for $17.13.

Bernie Madoff's houses haven't hit the market yet but they will soon. Meanwhile another of his luxury possessions, his 90-foot yacht in Antibes, France has been put up for sale. Yacht broker Wyles Hardy has been given the listing. The yacht was built by Arno shipbuilders in 2007. It has six berths including an owner's ensuite stateroom, a VIP cabin, guest cabin and three crew berths. The yacht has a top speed of 42 knots. It is being sold by private treaty on behalf of Grant Thornton UK LLP - the joint provisional liquidators of Madofff's securities firm. No word on a price but based on a search of similar yachts, this one should sell for three or four million euros.

It's been a long time coming but it looks like we finally have a date for when Federal officials will auction off the homes belonging to disgraced Ponzi schemer Bernie Madoff. The NY Daily News reports that the three homes, a Manhattan penthouse on East 64th Street, a summer home in Montauk, Long Island, and an estate in Florida's West Palm Beach, will be listed after Labor Day. The Federal marshals have said they are soliciting applications from real estate brokers to act as agents. As we heard last month, in Manhattan, potential brokers were summoned to Madofff's apartment to check out the property and undergo a sort of group audition.

Taken together the homes are worth more than $20 million. Proceeds from the sales will help to chip away at the billions owed to Madoff victims around the world. The homes will be sold unfurnished and Madoff's furniture and art will be sold separately. His three boats will also be sold. Madoff was sentenced to 150 years in prison in June. Most recently his longtime mistress announced that she is writing a book about their affair.

Last month, J. Ezra Merkin Ascot Partners LP sold his art collection, which included a hefty dose of works by Mark Rothko, for $310 million. The buyer still isn't known, which is the norm in the art market. But, there are some breadcrumbs along the way which Bloomberg News considered worth following. Interestingly, Merkin's Ascot Partners LP had invested a considerable amount of cash with Ponzi scam artist Bernie Madoff.

Along the way, Merkin's agent, TLIA, LLC, picked up $26.5 million of the $37.5 million in fees. The company is registered to a retired art collector and advisor, Ben Heller, age 83. He isn't talking. PaceWildenstein, which represents the Rothko estate, nabbed the other $11 million. Again, no comment. Yet, TLIA's piece of the commission is a bit high, according to art advisor Liz Klein, but she notes that answers are impossible without the full set of facts. Given the generally silent art market, we're unlikely to get all the facts anytime soon.

Like Merkin, Heller was a Madoff victim - $3.4 million in a charitable trust and $10 million of his own cash went down the drain.

Ponzi schemer Bernard Madoff has been sentenced but many of his investors are still looking to recoup some of their money. There may be a potential bit of money coming their way from J. Ezra Merkin, a New York financier who put his clients' money in Madoff's hands. Merkin, a noted art collector, is selling a collection of Mark Rothko paintings and Alberto Giacometti sculptures for $310 million. The painting shown at right is not one of Merkin's Rothkos but shows the style of painting that Merkin will be parting with. He was one of the leading collectors of Rothko works and even bought works directly from the Rothko family in 2004 for $91 million.

THe deal was announced by New York Attorney General Andrew Cuomo, who had put a freeze on Merkin's assets. The Wall Street Journal says that around $192 million of the proceeds might make it into the hands of defrauded investors. The rest of the money will go toward paying liens on the art, sales commissions, fees and taxes. According to documents sourced by the WSJ, PaceWildenstein LLC, the gallery that acted as a sales representative for the family, has a $42 million lien on behalf of the Rothko family regarding those paintings bought in 2004 and it is possible that now they will buy those paintings back.

The WSJ article seems to indicate that the price for the collection is high given the recent art market slump. The painting shown at right "White Center (Yellow, Pink and Lavender on Rose)" which was sold by David Rockefeller in 2007 brought in $72.8 million at a Sotheby's auction but other Rothkos have sold for less and in recent months several Rothkos have failed to sell at all.

For a long time as Florida real estate values plummeted Palm Beach remained an enclave of protected wealth but it seems even that is starting to change. There is no bigger symbol of the change in Palm Beach than Bernie Madoff. Since Madoff's arrest last year, Palm Beach's fortunes have shifted a bit. Stores along Worth Avenue have closed and even the value of Madoff's home has dropped by nearly two million dollars. Last year Palm Beach County officials assessed the taxable value of Madoff's home at $9.3 million but a new appraisal that federal officials did in March says it would likely sell for $7.45 million.The home was seized on Wednesday along with two of Madoff's yachts.

While prosecutors are trying to preserve as much of Madoff's wealth as possible in order to redistribute it to his many victims, it might be smart to wait a little while before putting this home on the market.Palm Beach has seen some big sales in the past couple of years including $81.5 million for Sidney Kimmel's mansion and $100 million for Donald Trump's oceanfront flip. Currently the most expensive home on the market in Palm Beach is still Casa Nana which is listed at $72.5 million the same price it was last November when we covered it as an estate of the day.

Super-fraudster Bernie Madoff bought a $7 million luxury yacht in the South of France using cash channeled through his London office and had it registered in his wife's name in order to launder money stolen from hapless clients, the Times of London reports. In 2006 Madoff told his associates at Madoff Securities International in London's Mayfair to transfer money to a French shipyard for a powerful 88-ft. Leopard motoryacht (above), alleging that their euro bank accounts would make the transaction easier.

Madoff later transferred cash to the London firm's accounts to square the difference, the paper reports. The Italian-built Leopard, which "epitomizes luxury and comfort," accommodates up to six people in cabins and is capable of speeds up to 40 knots. Madoff christened the yacht The Bull, an ironic reference to the then-booming stock market he was supposedly exploiting on behalf of his clients. Prosecutors have claimed that Madoff moved at least $250 million though his London firm.

Bernie Madoff's victims, despite the millions lost, probably aren't scrambling for their next meal but his victims can eat for free this week at one New York City restaurant. New York restaurateur Nino Selimaj is offering free meals at Nino's 208 to anyone who mentions they were a Madoff client when making reservations and brings in a monthly statement from Madoff. The meal is free but drinks are extra.

For those who aren't Madoff victims Nino's also has a recession special with a 25 percent off coupon that can when ordering off the a la carte menu at all Nino's restaurants. As the NY Times City Room blog reports the Madoff special only lasts until Saturday and is only available at Nino's 208 at 208 East 58th Street. Sure it's a publicity stunt but seared duck breast with mashed sweet potato, dried cranberries and a Vin Santo reduction sounds like great comfort food.

Angry at Bernie Madoff ? Get in line, and what a long line it is composed not just of those who have lost money or seen their friends lose money but who have watched various nonprofits be brought to their knees. Sensing just how many are mad at Madoff, Mini-Me ModelWorks has created the "Smash-Me-Bernie" doll. It features a surprisingly flattering image of Madoff dressed in a red suit and carrying a pitchfork. It also comes with a hammer to help you pulverize him. The company also sells President Obama dolls (no hammer included) and will make custom dolls. A fully customized mini made directly from your photo sells for $139.95. The Madoff figurine sells for $99.95.

[via Blogging Stocks]

From the LA Times Hot Property:
--Software tycoon John McAfee has lowered the price on his Molokai, Hawaii, home to $3.7 million from $4.9 million. The four-bedroom home, shown above, is newly constructed and sits on 5.3 ocean-front acres. The listing is here.I'm hoping he has better luck than he did with the sale of his Colorado home.
--Fashion designer Yael Aflalo who is behind the Ya-Ya fashion line has cut the price on her Hollywood Hills home to $3.95 million. The 1930s home which once belonged to John Barrymore was listed at $4.95 million when it was our estate of the day last summer.
--Jeweler Michael Beaudry has listed his Beverly Hills home for $13.5 million. The listing is here.
The owners of the Mystery Bookstore in Westwood have put their six-bedroom home in the Holmby Hills area on the market for $5.9 million. The listing is here.

From the NY Post:
Infamous swindler Bernie Madoff's penthouse apartment, where he currently is under house arrest, may soon be on the market. The apartment could be priced at up to $8 million.

From the NY Post's Gimme Shelter:
--Aberdeen Townhomes has created a set of landmarked townhouses with condo-like amenities in New York City priced between $7.5 million to $15.9 million. The interior space ranges from around 3,500 square feet to 8,100 square feet, with four to six bedrooms and have remote door-answering services, concierges, automated security systems, climate-controlled package rooms and building maintenance.

From the Wall Street Journal's Private Properties:
--Two years ago former Democratic presidential hopeful John Edwards sold his Washington home for $5.2 million, its current owners are trying to sell it, renovated, for almost twice as much. The home is listed at $9.95 million.
--Hollywood producer Brian Grazer has his taken his Pacific Palisades home off the market. It was listed at $27.5 million.
--Nicolas Cage has cut the price on his Bel Air home. We'll check it out as an estate of the day later today.
--Drew Bledsoe has cut the price on his Westlake, Texas home to $1.625 million, slightly less than the $1.7 million he paid for it new in 2005. The listing is here and says that the seller will buy the purchaser a membership to the development's golf club on closing.

When Bernie Madoff's house of cards came crashing down, it turns out there was a garage full of luxury cars trapped underneath. Bernard L. Madoff Investment Securities, whose namesake chief stands accused of perpetrating a $50 billion fraud, had a small fleet of luxury automobiles under lease, which the courts are now being asked to cancel.

Included in the fleet are a Cadillac DTS sedan, a Range Rover sport-ute, an unspecified Lexus, a Mercedes GLS450 sport-ute (pictured above) and a pair of top-of-the-line Mercedes S550 sedans. With Madoff not going anywhere under house arrest, the firm's employees dismissed and a court-appointed administrator trying to untangle the mess, the leased vehicles are all being returned to their dealerships, where mechanics may very well find the cars to be nothing but empty shells with bits and pieces borrowed from each other and leaving a long trail of debt behind them.

From Jaunted:
--The New Orleans home used in the movie "The Curious Case of Benjamin Button" is now on the market. The Victorian-era mansion, shown above, has six bedrooms, a library, music room and reception hall. It is listed at $2.85 million.

From the Wall Street Journal's Private Properties:
--The house where the reality show "Momma's Boys" was recently filmed, the gorgeous Terra Bella estate in Santa Barbara, California, has had another price reduction. The home was for sale for $39.5 million when it was our estate of the day in 2007 but is now listed at $21.8 million, 45% below its original listing. The listing is here.
--Goldman Sachs Co-President Jon Winkelried has cut the price of his Nantucket beach estate to $38.5 million, down 30% from October's original price of $55 million.

From the International Herald Tribune's Raising the Roof:
--Two ambitious Dubai projects are reportedly on hold. The Nakheel Tower was designed as the tallest building in the world but construction on the foundation has been halted. The $95 billion Jumeira Gardens project is also said to be in limbo.
--A medieval castle once ruled by Charlemagne, the "King of the Franks," is for sale in Italy. The castle on the border of Tuscany and Umbria dates to 802 and is priced at €13 million.

From the Real Estalker:
--Guns N' Roses and Velvet Revolver drummer Matt Sorum has placed his home in the Doheny Estates area of the Hollywood Hills on the market for $2.975 million. The listing is here.
--Comedienne Chelsea Handler and E! executive Ted Harbert soent $3.7 million on a condo in the Azzure building in Marina del Rey, California.

From the LA Times Hot Properties:
--Old Lion Manor, a lavish mansion once owned by "The Exorcist" author William Peter Blatty is on the market for $27.5 million. We'll be checking it out later this week as an estate of the day.
--Actor Nick Bakay has sold his Sierrra Towers condo in West Hollywood for $2 million.
--Actress Julie Bowen has put her Studio City home on the market. It's our estate of the day later today.
--Deborah Pratt, who wrote, acted in and co-produced the TV series "Quantum Leap," has listed her five-bedroom Holmby Hills-area home for $3.895 million. The listing is here.
--Singer Daniel Powter has listed his four-bedroom contemporary home in the Brentwood area for $2.295 million. The listing is here.

From the NY Post's Gimme Shelter:
--Fashion designer Marc Jacobs has rented an apartment at 40 Mercer Street for $30,000 a month. The building is also home to Harry Potter/"Equus" star Daniel Radcliffe who listed his apartment for rent in 2007 for $20,000 a month.
-- TV journalist Cathleen Trigg-Jones and her husband, plastic surgeon, Michael Jones, have put their Hamilton Heights townhouse on the market for $4 million. The listing is here.

From Berg Properties Big Time Listings:
--Actress and TV personality Caroline Rhea has sold her Hancock Park home for $3.2 million.
--Mr. Big Time rounds up Warren Beatty's real estate listings including a large spread in Beverly Hills.
--The Roy Rogers Double R Bar Ranch in Victorville, California is on the market for $8.5 million. The listing is here.
--A home in Encino once owned by Macy Gray has had a significant price cut down to $8.485 million. It was originally listed at $11.7 million. The listing is here.
--A home used in the Bachelor and Bachelorette television shows has had another price cut. The six-bedroom Agoura Hills, California mansion is now listed at $6.75 million, down from an original price of $13 million. The listing is here.

As we've mentioned before, the ritzy town of Palm Beach, Florida is reeling from the fallout regarding Bernard Madoff's $50 billion Ponzi scheme. Nowhere is hardest hit perhaps than Worth Avenue, Palm Beach's shopping area which is lined with ultra-pricey boutiques. The Dior boutique recently closed but another boutique dearer to Madoff's heart is Trillion. Robert Frank of the Wall Street Journal reports that Madoff enjoyed his pricey duds and shopped at Trillion on Worth Avenue. Madoff last shopped at the store two weeks before his arrest and bought some clothes to be picked up at a later date. He never returned to the store to pick up the goods because of his arrest and so the items, which were reported to be in the thousands of dollars range, were shipped to him. It bears noting that at Trillion, which specializes in Kiton cashmere suits, you could spend that on just a couple of items.

Madoff, remains free on a $10 million bond after a judge ruled that he can continue to live under house arrest in his Manhattan home despite recently sending jewelry off to relatives in violation of an assets freeze. Judge Ellis has asked Madoff to compile an inventory of all items in his home and barred his from any more property transfers. We assume that means no fancy Kiton castoffs so Bernie Madoff may just be the world's best dressed shut-in.