ponzi scheme

Versace's Former Mansion Caught Up In Ponzi Schemer's Downfall

Earlier I wrote about the Scott Rothstein Ponzi scheme in Florida but now another news story indicates that the fallout extends beyond just Rothstein's own properties. Casa Casuarina, Gianni Versace's South Beach mansion, is also caught in the crossfire. Rothstein, who is part owner of the property, has been accused of swindling investors in a Ponzi scheme which took in hundreds of millions of dollars.

Just a few weeks ago executive chef Wolfgang Birk moved from Washington D.C. to South Beach to take over the new Italian restaurant at Casa Casuarina but on Monday he was escorted out of the building by police along with the mansion's other employees. The restaurant was supposed to open this week. The employees are out of work and their payrolls will be hung up in court while Rothstein's complicated legal tangles are sorted out. Rothstein's Bova Group had taken over management of the entire property, including the hotel, restaurant, nightclub, and the private membership club. After Rothstein's illegal dealings were discovered Peter Loftin, Casa Casuarina's majority owner, asked that anything associated with Bova Group be taken out of the property in order to protect his property from anyone coming after Rothstein. An article on the Daily Pulp says that Loftin is looking into bringing in a new management company in order to reopen the property.

Rothstein had $1 million wedding at the property last year with Florida governor Charlie Crist in attendance. He has bought a small stake in the mansion and has left behind hundreds of thousands of dollars in unpaid bills relating to renovations for the restaurant and other areas.

Tony Bova, Rothstein's partner in the restaurant business also managed Bova Prime in Fort Lauderdale and was not part of the Ponzi schemer's machinations. The future of that restaurant is also uncertain and it could end up closing.

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Tags: casa casuarina, CasaCasuarina, ponzi scheme, ponzi schemer, ponzi schemes, PonziScheme, PonziSchemer, PonziSchemes, scott rothstein, ScottRothstein

Another Florida Ponzi Schemer Loses His Toys

by Deidre Woollard (RSS feed) —

Filed under: Crimes and Misdemeanors

Is Florida the home of the Ponzi scheme. NBC Miami brings in the story of yet another Florida Ponzi schemer who has had his toys seized by federal agents. Fort Lauderdale lawyer Scott Rothstein has not been arrested yet but the IRS has filed documents saying that he has been running a scheme since 2005, swindling hundreds of millions of dollars from investors. The filing says that Rothstein and others created false bank records and created legal settlements that did not exist. According to the Sun-Sentinel, the documents show that Rothstein's clients believed they were buying blocks of structured settlements derived from sexual harassment and labor-related cases in which confidential agreements had been reached. As with other Ponzi schemes new investor money was used to pay previous investors.

Federal agents visited Rothstein's $6.5 million mansion and hauled away his sports car collection and yacht and placed liens on several of his properties. The video from NBC Miami shows flatbed trucks taking away hisRolls-Royce Phantom and Bentley convertible. A red Ferrari was taken from his office and his 80-foot yacht Kimberly, named for his wife was sailed off to a collection agency. So far at least one lawsuit has been filed by investors seeking to get back some of the money they have lost.

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Tags: fort lauderdale, FortLauderdale, nbc miami, NbcMiami, ponzi scheme, ponzi schemer, ponzi schemes, PonziScheme, PonziSchemer, PonziSchemes, scott rothstein, ScottRothstein

Madoff's Victims To Get $534+ Million in Payments

by Lisa Palladino (RSS feed) —

Filed under: Wealth, Crimes and Misdemeanors

The latest in the Bernie Madoff saga is actually a bit of good news for his myriad victims. Reuters reports that they will receive more than $534 million in payouts, according to court-appointed trustee Irving Picard, who is trying to recover Madoff's assets.

The sum is less than one-eighth of the $4.44 billion of claims that Picard has so far deemed valid and is less than 3% of the $21.2 billion of losses suffered by holders of 2,335 Madoff accounts. These losses are up from the $13 billion the government estimated in June, when Madoff was sentenced to 150 years in prison.

Picard, a partner at the law firm Baker & Hostetler LLP, said he has reviewed 2,861 direct customer claims, allowing 1,558 and rejecting 1,303. He said 15,974 customer claims were submitted and noted that he has recovered $1.4 billion of Madoff assets, an amount that should reach $1.5 billion by year end.

Picard has filed lawsuits to recover $15 billion from Madoff investors he calls "net winners." Of the 4,903 accounts at Madoff's firm on December 11, 2008, when Madoff was arrested, 2,568 received more money than they deposited, he said.

Picard also said he will pursue the recovery of $7.2 billion from the estate of billionaire philanthropist Jeffry Picower, who recently drowned in a swimming pool at his Palm Beach, Fla., home following a heart attack.

The Securities Investor Protection Corp, a federally chartered agency that supervises the liquidation of brokerages, has been "the only source of distributed funds" to victims so far, agency president Stephen Harbeck said, adding that the $534.25 million of committed advances is more than in the SIPC's 321 combined prior liquidations since 1970. Federal law limits SIPC protection to $500,000.

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Tags: bernard Madoff, BernardMadoff, Bernie Madoff, BernieMadoff, justice, Madoff, ponzi scheme, PonziScheme

Madoff's Long Island Beach Home Fetches $9.41 million

by Tom Johansmeyer (RSS feed) —

Filed under: Estates, Crimes and Misdemeanors

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.

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Tags: bernardmadoff, bernie madoff, BernieMadoff, butner, florida, madoff, madoffponzischeme, madoffscandal, montauk, new york, new york city, new york new york, NewYork, NewYorkCity, NewYorkNewYork, north carolina, NorthCarolina, palm bay florida, palm beach, PalmBayFlorida, PalmBeach, ponzi, ponzi scheme, PonziScheme

Tight Lips Won't Reveal Rothko-Madoff Connection

by Tom Johansmeyer (RSS feed) —

Filed under: Art

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.

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Tags: andrew cuomo, AndrewCuomo, art, art collecting, art collection, art collector, art market, ArtCollecting, ArtCollection, ArtCollector, artist, ArtMarket, artwork, bernard madoff, BernardMadoff, bernie madoff, BernieMadoff, madoff, mark rothko, MarkRothko, pacewildenstein, ponzi, ponzi scheme, PonziScheme, rothko, scandal

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A Plane, Wine and More, The Profits Of An Island Ponzi Scheme

by Deidre Woollard (RSS feed) —

Filed under: Wealth

Madoff is far from the only Ponzi schemer around. A court-appointed receiver is looking to sell off a wine collection, a private jet and two Cadillacs as part of a way to pay back victims of an alleged Ponzi scheme that hundreds invested at least $68 million in since 2004. According to court documents, the assets belong to several people, including businessman William Wise whose Millennium Bank on the island of St. Vincent is said to have sold fake certificates of deposit at much-higher-than-average interest rates. The SEC says the Millennium deposits, rather than being used for banking investments, were sent to an account in California that served as a personal piggy bank for the defendants and from which they made modest Ponzi payouts to investors.

Receiver Richard Roper has made a request to the U.S. District Court in Texas to go after $250,000 in wine Wise allegedly has stored in St. Vincent and elsewhere, several cars including a pair of 2009 Cadillac Escalades and a $5.7 million Challenger 601-1A jet named "Spirit of Millennium" (could this be it here?) Newsday reports that Judge Reed O'Connor in Texas already granted the SEC's request for an asset freeze and emergency relief for investors.

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Tags: millennium bank, MillenniumBank, ponzi scheme, PonziScheme, sec, st vincent, StVincent