Madoff Trustee: ‘Boundless Avarice’ Fueled Noels, Others to Commit Fraud

By
Walter Noel and family.

Since Bernie Madoff was arrested, Walter Noel and partners in his Fairfield Greenwich Group, whose Madoff feeder fund lost $7 billion with the Ponzi schemer, have played dumb, insisting they had no idea Berns was crooked. Madoff himself confirmed their lack of intelligence, saying in a jailhouse interview that the people at the firm "aren't rocket scientists." This is both true and not true, according to a damning complaint filed yesterday by Madoff trustee Irving Picard — which charges Noel and 24 other Fairfield Greenwich employees, among them his daughter Corinna, and his sons-in-law Philip Toub, Andres Piedrahita, and Yanko Della Schiava, with 31 counts of fraud. The folks working at Fairfield Greenwich were smart enough, at least, to know that something was wrong. But they sure were stupid about trying to cover it up.

Blinded by their "boundless avarice," and motivated by a kind of sad Napoleonic impotence, the complaint alleges — "The Defendants knew that without Madoff they could not survive. The funds the Defendants tried to create without Madoff’s assistance, making their own choices about which investment managers to place money, were all failures." — the defendants made a ton of stupid mistakes. Including the usual one of committing way too much to e-mail.

In correspondence quoted in the complaint, the defendants joked about Madoff potentially being a fraud ("He's probably a reader of Barrons!" Della Schiava said once when an investor questioned Madoff's impossible returns, referring to an early article that questioned Madoff's returns), outlined in detail ways to keep investors from knowing exactly how much of their money was being placed with the Ponzi schemer ("Always keep in mind the prime directive and downplay Madoff's role — never to have his name within 30 words of the word 'manage,'" one FGG employee warned), and organized "strategy meetings" to discuss ways in which they might "haze up the details" in order to deceive investors. (One client "has always heard about Madoff, but hears things that scare her," FGG partner David Horn advised. "So neutralize the scare ... this will be a piece of cake") Warnings from people in the business about Madoff's accounting practices were either brushed off or outright ignored, everyone who works there sounds like the worst kind of jerk.

In the end, there's a nice little Animal House–style postscript about all of the defendants.


By the time Madoff was arrested, the Management Defendants had only a few million dollars invested with Madoff. Piedrahita had no investments with Madoff, Tucker had approximately $900,000 and Noel had a slight percentage of his wealth, $9 million, invested through Madoff. The Defendants retained every other cent of the fees, partnership distributions, and other monies they unjustly “earned” and had collected over nearly two decades. They have to-date kept millions of dollars of stolen Customer Property.

Piedrahita and his wife sold their U.S. residence and moved from country to country after Piedrahita took delivery of a $12 million yacht.

Nice. Fairfield Greenwich issued a statement today in response to the complaint, calling it “replete with false, misleading and rehashed accusations.” Oh, that old buying-a-yacht-after-the-fraud story again.

Amended Complaint against all defendants [Madoff Trustee website]