Toomre Capital Markets LLC

Real-Time Capital Markets -- Analytics, Visualization, Event Processing, and Intelligence

Frank Avellino, Michael Bienes and Bernie Madoff

<br />
Michael Bienes with wife Dianne. Back in 1992, the United States Securities and Exchange Commission ("SEC") reached a settlement with Avellino & Bienes ("A&B"), a tiny New York accounting firm that was run by Frank Avellino and Michael Bienes. According to legal documents from that case, these two started raising money from clients, friends and relatives in the early 1960s and handed over that cash over to Bernie Madoff to invest. (This was about the same time that Bob Jaffe's future father-in-law, Boston philanthropist Carl Shapiro, gave Bernie Madoff his first funds with which were used to start his investment business.) By 1984, apparently Avellino and Bienes had ceased their accounting practice to focus exclusively on finding additional investors for Madoff.

In 1989, two other accountants Steven Mendelow and Edward Glantz and later Glantz's son Richard also began raising funds for Bernie Madoff. By the time that the S.E.C. ordered these three firms to return all funds to their investors for selling unregistered shares, some $454 million had been raised from more than thirty-two hundred investors. Apparently, the S.E.C investigation had been sparked by a confidential tip that one of the money managers was promising annual returns of up to twenty percent.

The regulators subsequently examined Madoff's books and it appears that they were satisfied when every penny was returned to the former accountant's investors. Bernie Madoff and his investment operation never were sued by the regulator and consequently never was subject to any operational restrictions. The former accountants were collectively ordered to pay $875,000 and to cease from further violations of securities laws.

Rather interestingly, Avellino & Barnes were then represented by Ira "Ike" Sorkin, the lawyer who currently represents Bernie Madoff in his criminal proceedings. In another connection between Avellino and Madoff, Lee Richards, who has been appointed by the SEC as the receiver of all Bernard Madoff Investment Securities assets, also served as the court-appointed trustee over Avellino & Bienes during its legal dispute with the federal agency, according to Bloomberg News.

What originally caught the attention of Toomre Capital Markets LLC ("TCM") about Frank Avellino and Michael Bienes was their relationship to Bernie Madoff's eventual father-in-law, Saul Alpern. Mr. Alpern was the lead partner of a Manhattan accounting firm back in the 1950's and 1960's then called Alpern & Heller. His colleague was Sherman Heller. Two of the junior accountants at the firm were named Frank Avellino and Michael Bienes. Mr Heller apparently died in the mid-1960's at the age of 46 and then in the 1970's Avellino and Bienes took over that accounting business renaming it Avellino & Bienes. According to the blog mehtafiscal in their post The End of a Sure Things: Madoff's Long Bet, one early investor with A&B and Madoff claimed that "Madoff had worked at Alpern & Heller in the late 1950s, with Avellino and Bienes, and was friendly with them [this last statement could not be independently verified]."

TCM was previously unaware that Bernie Madoff had worked at an accounting firm. (Perhaps it was this accounting firm was the source of the original connection between Carl Shapiro and Bernie Madoff?) Carl Shapiro was Madoff's original investor and also one of his last when he supposedly contributed $250mm to Madoff in November 2008. Carl Shapiro also likely was the link that connected his son-in-law, Robert Jaffe, with Bernie Madoff and eventual employment at Cohmad Securities Corp.

Various charity filings with the SEC subsequent to 1992 suggest that both Frank Avellino and Michael Bienes continued to have at least some funds invested with Bernie Madoff. Whether they played a larger role after 1992 in Madoff's investment business remains to be disclosed. However, given that their personal relationships with Madoff that apparently were far deeper than the SEC disclosed back in 1992, one is left to wonder.

Two interesting pieces of news this month contribute to this state of wonder. On Monday January 12th, Mr. Bienes, "the fabulously wealthy Fort Lauderdale benefactor", abruptly resigned from the board of the prestigious Broward Center for the Performing Arts via a short one sentence letter of resignation. Why did he suddenly resign at this time? One might also wonder just how this formerly junior accountant became so wealthy. Did he really make his millions because "he got lucky on Wall Street"? Or perhaps some of his "wealth" came from his old buddy Bernie Madoff?

The other piece of intriguing news concerns his partner Frank Avellino. Mr. Avellino too has progressed far from his younger days as an accountant at Alpern & Heller. Today he apparently owns a $4 million home in Palm Beach, a residence in New York City and another $10 million summer residence on Nantucket. Also apparently, Mr. Avellino just recently put his Nantucket residence on the market. The timing of that move too is interesting and perhaps quite innocent, particularly in these difficult economic times.

However, when one learns that Mr. Avellino also has recently been accused of bilking his house-cleaner out of $124,000 life savings, one really begins to wonder. This article in Nantucket's Inquirer and Mirror has more details of the suit filed by one Nevena Ivanova against Mr. Avellino. Apparently a few years ago, Mr. Avellino accepted some funds from Ms. Ivanova for investment. Then recently he announced that all of her money had been lost. It is unclear how exactly Mr. Avellino was supposed to invest the householder's money. Perhaps he invested it with his good buddy Bernie? If so, how then did Mr. Avellino allegedly announce on December 1st that all of her funds had been lost? Did perhaps Mr. Avellino know something about Bernie Madoff's fraud some ten days before his arrest?

Inquiring minds really would like to know more about the recent relationships between Bernie Madoff, Frank Avellino and Michael Bienes. Hopefully, more information will be forthcoming shortly.

Frank Avellino

Avellino is a bad, bad guy. Crossing paths with him is like crossing paths with the devil. It gives you chills. He has never worked a real day in his life. He has never broken a sweat. He and his wife ruined countless lives of good, hard working people. I think I'd rather be one of the victims than be him. They can still look in the mirror.

Frank J. Avellino had another home in Sunrise, Florida

He sold it and told the family they had to leave. They didn't care if the family had a place to live. They just wanted the CASH! The family lived there for about 11 years. They are a good family and the neighborhood was sad to see them go.

Madoff Trail

Just read Mark Seal article in Vanity Fair. Seems to be a three generation financial mafia started in the 1950's or earlier - Bernie's mother and father; Sylvia's father and his employees - the early Ponzi team. Avellino and Bienes - Bernie was the front man - all he had to do was smile, dress well, act imperious as the gate keeper for investors willing to ignore "it is too good to be true".

Who got paid off at the SEC?? --follow the Shana trail........there will always be crooks, but we cannot have the fox guarding the hens.

SEC and Madoff Investors Should Be Scrutinized

Bernie Madoff manufactured profits for clientele when needed, but Madoff could also manufacture losses if the client needed to reduce capital gains.

Yes, there is a relationship between Bernie Madoff and the SEC. How many SEC officials were involved may never be known. Much of any conspiracy is done by word of mouth, just like the mafia.

Though we know that tens of millions were withdrawn by Bernie Madoff's wife, the fate of much of the $50 billion is unknown and no one seems interested in figuring out where that money is.

My opinion: Many of those crying about being bilked by Bernie Madoff knew what was going on from the start. Now, in addition to money that Bernie Madoff has sheltered for them, they will have additional millions in taxes returned from their "phantom gains." Many of these so-called "victims" and their financial advisors have done what every legitimate financial advisor would prevent, that is, putting an investors entire holdings in one account.

The fact that so many of these "victims" were Jews is very suspicious and I'm guessing most of the $50 billion is safely stored in Israeli banks.

The Jig is Up for Michael Bienes

Looks like the shit has hit the fan down in FLA
Avellino and Bienes now have nowhere to hide.
They can claim they were "victims" in this but after 40 years of lying who will believe them?
Article

Madoff Mendelow Avellino & Bienes

How does Steve Mendelow end up serving as an Advisor to the Chairman of a New York Stock Exchange and Advisor to the Chairman of an American Stock Exchange?

Remember -
• Mendelow was a Partner in Telfran which was slapped on the hand by Judge Kenneth Conboy in 1992 for SEC Violations.

• Telfran was involved with Avellino & Bienes, the firm that also received the slap on the hands for the same violation.

• Avellino & Bienes handled the Madoff Investments and then Madoff handled the Avellino & Bienes investments; A&B also partnered with Telfran, a investment spin-off of Glantz & Levey that shared offices with A&B at 285 Madison Avenue in New York (that’s the Glantz from Telfran).

• Avellino & Bienes purchased the Alpern Accounting Firm wherein Alpern’s daughter married Bernard Madoff.

• And as the story goes the “investors” included the Longshoremen’s Union’s Pension Fund and funds from “Consolidated Freightways”!!!

Mendelown As Advisor

Steven Mendelow's profile at the website of Koningsberg Wolf is craftily written. I am also pretty sure that it was meant for the casual reader to come away with the impression that you did. Mr. Mendelow serves as an advisor to both a NYSE and AMEX-listed company's chairmen, not to the Chairmen of the two exchanges themselves. Also note that there is no mention of being sanctioned by the SEC or involvement with Madoff, Avellino, or Bienes.

Madoff Avellino & Bienes and Telfran

I stand corrected on the fact that Mendelow serves as advisor to "companies" listed on the NYSE and AMEX and not as an advisor to the chairmen of those exchanges. But what about the hand slap by Judge Conboy in 1992. Does that carry no negatives?

Madoff Avellino & Bienes and Telfran Mendelow from pdf of sec.

PRELIMINARY INJUNCTION AND OTHER EQUITABLE RELIEF ISSUED AGAINST TELFRAN ASSOCIATES LTD.,
TELFRAN ASSOCIATES CORP., STEVEN MENDELOW AND EDWARD GLANTZ
The Commission announced today that on November 25, 1992 the Honorable Kenneth Conboy,
District Judge for the Southern District of New York, entered an Order of Preliminary
Injunction and Other Equitable Relief on Consent (Order) against Telfran Associates
Ltd. (Telfran Ltd.), Telfran Associates Corp. (Telfran Corp.), Steven Mendelow
(Mendelow) and Edward Glantz (Glantz). The Order preliminarily enjoined Telfran Ltd.
NEWS DIGEST, December II, 1992
from violations the .security •• registration provisions of the Securities Act of 1933
(Securit1e. Act) and the investment company registration provisions of the Investment
Company Act of 1940 (investment Company Act). Th. Order also preliminarily enjoined
Telfran Corp, Mendelow and Glantz from violating the securities registration
I
provision. of the Securities Act and aiding and abetting violations of the investment
company registration provisions of the Investment Company Act. In addition, the Order
appointed a Trustee. to make a complete redemption of Telfran Ltd. notes and an
accounting firm to conduct an audit of A&!'. financial statements.
The complaint alleges. that from 1989 through November 1992 the defendant. sold
unregistered securities to the public in the form of notes and from 1989 through
November 1992 Te1fran Ltd., aided and abetted by Telfran Corp., Mendelow and Glantz,
operated a. an unregistered investment company. The complaint alleges that the
defendant. accepted funds from customers and guaranteed those customers fixed interest
Rate.
15',
The money the defendant raised was then used to purchase note.
paying 15' to 19, fixed interest. The complaint alleges that as of November 16, 1992
more than 800 investors had purchased Telfran Ltd. notes and Telfran Ltd. had raised
in excess. of $88 million through the sale of these unregistered notes. (SEC v.
Telfran Associates Ltd., Telfran Associates. Corp., Steven Mendelow and Edward Glantz,
Civil Action No. 92•8564, SDNY] (LR•13463)

Madoff Avellino & Bienes and Telfran

Madoff wandered from the original "Arbitrage" that had been set up with "Ranzer" at Merrill Lynch.

This guaranteed a return of no less than 25% per year for A&B and 20%+ for Telfran.

A&B and Telfran used "Short Sales" with AAA Convertibles to gain this number.

Believe me it worked because one of my computer programmers setup the balance sheets for A&B and Telfran, the original sets of Partners.

It was a lock until some of the investors split up their portfolios by adding "family member" to pay for college, etc. which put the limited partnership at over 35!!! the magic number that requires registration with the SEC.

Whatever Madoff did after the A&B and Telfran hand slap by the SEC 9 (I believe Judge Conboy handled the case) for the government was not in the original set of plans.

Questions??

Real Trading Behind A&B Investment Notes?

Your comment suggests that there was real and profitable trades for the A&B note holders as well as those from Telfran. This information is contrary to the news from FINRA and SIPC that there appears to be no evidence of trading accounts over a forty year plus period. Do you have any documentation to support your contention?

Madoff Avellino & Bienes and Telfran

Yes. I may also have one of lists of investors with SS# etc.

Will dig old "3 1/4 disks" this week.

Carl Shapiro on A&B list??

TCM is particularly interested in whether Carl Shapiro would appear on that list. Remember he was supposedly Bernie Madoff's first client as well as someone who "loaned" (according to some news accounts) Madoff $250 million in November 2008 when Madoff apparently was frantically trying to raise funds to meet the supposed $7 billion redemption request from the "feeder funds." TCM wonders how this key investor was "serviced" and also whether he previously ever made other short-term "loans" to Bernie Madoff.

Madoff Avellino & Bienes and Telfran

I do not know the name.

I will check the list that is on the disk when I dig it up.

The federal government has had the list since 1992!!

Their investigation found no evidence of any illegal business outside of the "unregistered" partnerships.

The Arbitrage was made through Merrill Lynch; the stock broker was David Ranzer.

That's it for today.

I will reply with answers as discovered.

Madoff Avellino & Bienes and Telfran

Go to Google type the following and the case will come to life: Judge Kenneth Conboy!

Avellino & Bienes Judge Conboy 1992

Avellino and Bienes; Bernie's Long Time Partners in Crime

Nicely Done!
Now what about these Avellino and Bienes business entities, all interestingly listed at the same address
4750 NE 23d Ave Fort Lauderdale 33308.

27 Cliff LLC-Avellinos Nantucket address
Grosvenor Partners LTD
Mayfair Bookkeeping Services Inc-an Avellino and Bienes partnership interestingly titled after the location of Madoffs London Offices where Madoff kept his dynastic piggy bank
The Avellino Family Foundation Inc-a sham foundation which now holds the Kenn Jordan funds
Kenn Jordan Foundation Inc-an apparent sham foundation which pooled funds and invested all proceeds with Madoff.

check this link and the associated comments for more revealing information;
http://clusterstock.alleyinsider.com/2009/1/read-here-the-case-against-frank-avellino

Why isn't Frank Avellino in

Why isn't Frank Avellino in jail!!!!?????

Just a matter of time

Have patience. The US attorney's office has a lot on its plate, figuring out who to charge first.

Assuming Frank Avellino and Michael Bienes are on the list of 244 special Madoff accounts that generated unusually high returns, 100% or more (see Looby report) , A&B are in big trouble. The elves on the 17th floor created fake trades in those accounts and we know for sure Andrew and Mark Madoff's accounts had profits generated from phantom trading (see trustee suit) as did the Picower Foundation (see 990s).

Exhibit 117 to the SEC IG's report is a transcript of the 1992 SEC interview of A&B. Despite his protests to the contrary now, Bienes understands exactly how arbitrage works.