In the Saturday January 17th 2009 edition of The New York Times, Alex Berenson penned at article entitled '92 Ponzi Case Missed Signals About Madoff. Toomre Capital Markets LLC ("TCM") does not often "scoop" the old "Gray Lady." However, interested readers may wish to also read the TCM entry posted on Thursday January 15th at 2:43 pm entitled Frank Avellino, Michael Bienes and Bernie Madoff. (Particularly interested readers might also want to note that an IP address associated with The New York Times subsequently and repeatedly visited that TCM posting. It is surprising is not how much of the information is the same, is it not?)
For those not familiar with the 1992 part of the Madoff fraud scandal, Frank Avellino and Michael Bienes, now both quite wealthy, apparently effectively took over the accounting firm of Bernie Madoff's father-in-law, Alpern & Heller. Their firm Avellino & Bienes ("A&B") first began soliciting funds for Bernie Madoff in the early 1960s. By 1984, they had effectively ceased offering normal accounting services to focus almost exclusively on gathering investors that could funnel funds to Mr. Madoff. An anonymous tip in late 1992 about A&B offering guaranteed 20% on investor notes caused the SEC to investigate the allegations of an apparent Ponzi scheme. A settlement soon thereafter was reached when it was revealed that Bernie Madoff apparently had all of the investors' funds and he was able to return every single penny. The SEC settled the case by ordering A&B to close, to pay a fine and to return all investor funds.
Other source materials indicate that after the SEC settlement, Michael Bienes actively urged investors in the A&B notes to directly open accounts with Bernie Madoff's firm. There also have been some suggestions that Mr. Bienes continued to solicit investment funds for Bernie Madoff in the current decade. The NYT article reports "Mark Raymond, a lawyer for Mr. Bienes, said that his client had no knowledge of Mr. Madoff’s fraud and had lost tens of millions of dollars, most of his savings, in the fraud. Mr. Bienes worked mainly as a fund-raiser, while Mr. Avellino actively managed Avellino & Bienes, according to court documents and people who knew the men."
This New York Times article further advances the understanding the A&B element of Bernie Madoff's fraud scheme. Without attribution, the article definitively states that Mr. Avellino continued to send money to Mr. Madoff after the conclusion of the 1992-93 SEC inquiry. Apparently Gary Woodfield, a former federal prosecutor, who now represents Mr. Avellino, had no comment. So too was the case with a certain Francis B. Brogan, Mr. Avellino's long-time lawyer and a partner at Greenberg Traurig in Fort Lauderdale, Florida.
The article continues: "Mr. Avellino has been connected to Mr. Madoff for his entire career. After graduating from the City University of New York in 1958, Mr. Avellino began working as an accountant at a firm run by Saul Alpern, Mr. Madoff’s father-in-law. Mr. Madoff also briefly ran his securities business from the firm’s offices. As early as 1962, according to the S.E.C.’s complaint against him, Mr. Avellino began raising money for Mr. Madoff, who was running a small brokerage company. Mr. Bienes joined in 1965. In 1977, Mr. Avellino and Mr. Bienes formed an accounting firm in Midtown Manhattan. Mr. Avellino owned half the company; the remainder was owned by Mr. Bienes and his wife, Dianne. In 1980, the Bieneses moved to Fort Lauderdale, while Mr. Avellino remained in New York."
Later the article addresses the issue of lawyer of Ira Lee Sorkin, lawyer then in the 1992 SEC matter to both Mr. Avellino and Mr. Bienes and at present to Bernie Madoff. According to the NYT article, "In an interview, Mr. Sorkin said this week that he could not recall whether Mr. Madoff referred Mr. Avellino and Mr. Bienes to him. He has known Mr. Madoff since at least the early 1980s, he said, but did not represent Mr. Madoff at the time of the Avellino case."