A Wall Street powerbroker now accused of a massive investment fraud scheme managed a charitable foundation created by Sen. Frank Lautenberg that had nearly $14.5 million in assets.Bernard L. Madoff, the 70-year-old founder of a self-named investment firm in New York City, was arrested on a securities fraud charge Thursday, The Associated Press reported.
Madoff is accused of running a fraudulent investment business that lost at least $50 billion before he confessed to senior employees it was a "giant Ponzi scheme," The AP quoted authorities saying. Madoff's attorney said he would plead not guilty. "Senator Lautenberg was an investor in Bernard Madoff's investment fund, primarily in the form of his family's charitable foundation," Lautenberg spokesman Scott Mulhauser said.
Newark attorney Michael Griffinger, who was asked to look into the matter for Lautenberg on Friday, said he believed Madoff was the sole manager or at least the primary manager of the foundation's assets. The latest public tax documents available online show those assets totaled more than $14.5 million in 2006. "I'm hesitant to make any bold statements, because there may be some current accounts in the hands of others, but the bulk of the foundation money was in the hands of Madoff," Griffinger said.He said he has asked that the foundation's financial documents be sent to his office, but he did not expect to have further information Friday.
Mulhauser said the foundation has given to several other charities, including the Breast Cancer Research Foundation, Catholic Relief Services, the NAACP and the New Jersey Performing Arts Center.
Securities and Exchange Commission enforcement attorneys were in federal court on Friday to seek emergency relief for investors, including an asset freeze and the appointment of a receiver for Madoff's firm, The AP said. The alleged $50 billion fraud that could be the largest ever pinned on an individual, The AP said.
Madoff and family members connected with the firm also made at least $419,000 in contributions to federal candidates since 1986, including the New Jersey Senate campaigns of Lautenberg and Jon Corzine and the presidential campaign of Bill Bradley, according to Moneyline.com. Madoff, a former chairman of the Nasdaq stock exchange, was among the first contributors when Corzine entered the 2000 U.S. Senate campaign. He and Ruth Madoff, who has the same address on Federal Election Commission reports, provided $2,000 of the first $31,000 Corzine raised in August 1999.
Corzine, a millionaire and former Goldman Sachs chairman who is now governor, eventually raised $2.7 million from contributors and put $60.2 million of his own money into the campaign.
A spokesman said Corzine's did not have any personal investments with Madoff.
Madoff and relatives also gave $8,000 in 1999 to former New Jersey Sen. Bill Bradley's campaign for president, and $13,600 to Lautenberg's 2008 re-election campaign. Bradley did not return a call seeking comment. Mulhauser said Lautenberg would dispose of the contribution, but exactly how would be determined later. Typically campaigns donation questionable contributions to charity.
The biggest recipient of Madoff's contributions was the Democratic Senatorial Campaign Committee, which received $100,000 in the past four years. The DSCC chairman during that time was Sen. Charles Schumer, D-N.Y., who also got $39,000 for his own campaign account from Madoffs since 1998. The current chairman of the DSCC is Sen. Bob Menendez, D-N.J.
