A US hedge fund, Fairfield Greenwich, has been charged with fraud for pumping nearly $7 billion of its clients’ money into Bernard Madoff’s corrupt investment empire with “total disregard” for any checks on the renegade financier’s activities.
The action, by Massachusetts’ securities regulator, is the first to be taken against any of the so-called “feeder funds” that channelled billions of dollars in the direction of Madoff, who was jailed last month…
The Fairfield Greenwich hedge fund caught up in the scandal is run by Walter Noel, a high-profile New York society figure whose glamorous family was once described by Vanity Fair magazine as “shoring up the virtues of a nearly extinct aristocracy”.
Charges filed by Massachusetts’ secretary of state, William Galvin, said 95% of the firm’s $7.2bn Sentry fund was invested with Madoff, who admitted in court last month that he had barely done any genuine trading for nearly two decades.
Through a 1% commission fee, Fairfield earned $100m a year from pushing money in Madoff’s direction.
Galvin’s charges said: “They were blinded by the fees they were earning, did not engage in meaningful due diligence and turned a blind eye to any fact that would have burst their lucrative bubble.”
Crooks paying commissions to crooks surely sounds like conspiracy.
