White man arrested over $50 billion fraud

Nothing new on Wall Street.…He’ll be out in no time.

Bernie Madoff, a former chairman of the NASDAQ stock market, has been arrested and charged with running a multi-billion dollar hedge fund swindle in New York.

Mr Madoff is alleged to have operated the scheme through his hedge fund business, which was separate from his better-known market-making business, Bernard L. Madoff Investment Securities (BMIS).

Mr Madoff told senior employees of his firm on Wednesday that “it’s all just one big lie” and that he was “finished”, according to a criminal complaint filed on Thursday night by the US Attorney’s office and the Federal Bureau of Investigations (FBI).

He allegedly went on to say that the business was “a giant Ponzi scheme” – a reference to Charles Ponzi, one of the greatest swindlers in US history – and estimated that the scheme had lost investors $50bn over many years – which would make the hedge fund one of the biggest frauds in history.

“There is no innocent explanation,” Mr Madoff said, according to the criminal complaint. He told the agents that it was all his fault, and that he “paid investors with money that wasn’t there”, according to the complaint.

He allegedly told his employees that he had, for years, been paying returns to certain investors out of the cash received from other investors.

Mr Madoff, 70, was charged with a single count of securities fraud and faces up to 20 years in prison and a fine of up to $5m if found guilty.

The criminal complaint was accompanied by a separate civil lawsuit filed by the US Securities and Exchange Commission (SEC), which accuses Mr Madoff of defrauding clients of his firm and seeks emergency relief for the victims.

“Our complaint alleges a stunning fraud – both in terms of scope and duration. We are moving quickly and decisively to stop the scheme and protect the remaining assets for investors,” said Scott Friestad, the SEC’s deputy enforcer.

The complaint details that as of Jan 7, 2008, Madoff’s investment advisory business had assets of $17.1bn, serving up to 25 clients.

Although Mr Madoff is thought to have few direct British links, he did open a London office in 1983, with Madoff Securities International becoming one of the first American members of the London Stock Exchange.

Stephen Raven, chief executive of Madoff Securities International said: “We only became aware overnight of the news relating to our Chairman, Bernard Madoff. Our business in London is not in any way part of Bernard L Madoff Investment Securities LLC. His major shareholding in our firm is a personal investment. Our business activities are not involved in any way with the US asset management company with which the reported allegations appear to be concerned. We do not have any further information beyond what is already in the public domain.”

In 2000, his market-making business BMIS partnered with Goldman Sachs and Merrill Lynch to the form the new Primex Trading platform, one of the early rival electronic exchanges to the main bourses which eventually fell by the wayside following a partnership with NASDAQ.

BMIS is also credited with ending the old practice of quoting New York Stock Exchange-listed securities in eighths of a dollar in 1997, instead listing them in sixteenths.

Mr Madoff began BMIS with just $5,000 of savings from jobs lifeguarding at Rockaway Beach and installing sprinkler systems.

The firm grew to become a leading market maker, with brother Peter, nephew Charles, niece Shana, and sons Mark and Andrew all involved in the business at some stage in recent years.

His firm’s website claims that BMIS ranks among the top one per cent of US securities firms, and states that “clients know Bernard Madoff has a personal interest in maintaining… high ethical standards.”

Mr Madoff’s lawyer, Dan Horwitz, called his client “a person of integrity” and said he intends to fight the charge. “We will fight to get through this unfortunate set of events.” His client was released on a $10m bond secured by his New York apartment.

Cake request for 3-year-old Hitler namesake denied

Ok, so they’re not racist, they just name their kids after Nazi war criminals…

EASTON, Pa. – The father of 3-year-old Adolf Hitler Campbell, denied a birthday cake with the child’s full name on it by one New Jersey supermarket, is asking for a little tolerance. Heath Campbell and his wife, Deborah, are upset not only with the decision made by the Greenwich ShopRite, but with an outpouring of angry Internet postings in response to a local newspaper article over the weekend on their flare-up over frosting.

“I think people need to take their heads out of the cloud they’ve been in and start focusing on the future and not on the past,” Heath Campbell said Tuesday in an interview conducted in Easton, on the other side of the Delaware River from where the family lives in Hunterdon County, N.J.

“There’s a new president and he says it’s time for a change; well, then it’s time for a change,” the 35-year-old continued. “They need to accept a name. A name’s a name. The kid isn’t going to grow up and do what (Hitler) did.”

Deborah Campbell, 25, said she phoned in her order last week to the ShopRite. When she told the bakery department she wanted her son’s name spelled out, she was told to talk to a supervisor, who denied the request.

A store manager at ShopRite referred questions to a corporate spokeswoman who did not immediately return a phone message Tuesday. But spokeswoman Karen Meleta told The Easton Express-Times for Sunday’s editions that the store considered Campbell’s request inappropriate.

The Campbells ultimately got their cake decorated at a Wal-Mart in Pennsylvania, Deborah Campbell said. About 12 people attended the birthday party on Sunday, including several children who were of mixed race, according to Heath Campbell.

“If we’re so racist, then why would I have them come into my home?” he asked.

The Campbells’ other two children also have unusual names: JoyceLynn Aryan Nation Campbell turns 2 in a few months and Honszlynn Hinler Jeannie Campbell will be 1 in April.

Heath Campbell said he named his son after Adolf Hitler because he liked the name and because “no one else in the world would have that name.” He sounded surprised by all the controversy the dispute had generated.

Campbell said his ancestors are German and that he has lived his entire life in Hunterdon County. On Tuesday he wore a pair of black boots he said were worn by a German soldier during World War II.

He said he was raised not to avoid people of other races but not to mix with them socially or romantically. But he said he would try to raise his children differently.

“Say he grows up and hangs out with black people. That’s fine, I don’t really care,” he said. “That’s his choice.”