Bad News for Ezra Merkin and his Investors

According to a report from Bloomberg News a federal court will decide some aspects of the Madoff-Merkin settlements. Although legal matters like this one are hard to sort out, this development is potentially bad news for Merkin's victims, and good news for Madoff's victims, as the story explains:

...Last week's ruling doesn't answer the ultimate question of whether Picard can stop the Merkin settlement. It only means that Rakoff will decide critical questions underlying the dispute.

Schneiderman takes the position it would be "unprecedented for a federal court to enjoin the settlement of claims by a state law enforcement agency against non-debtors." Picard is suing Merkin for more than $500 million. If Schneiderman is allowed to settle, Picard contends Merkin won't have money left to pay his claims.

Whether Picard wins ultimately will decide who receives the $410 million from Merkin.
If Picard wins, halts the Attorney General's lawsuit, and recovers $410 million or more from Merkin, Picard will distribute the funds to Madoff customers and likely not include Merkin's own investors. The Attorney General, on the other hand, will turn over most of the $410 million to customers of Merkin.

The Madoff firm began liquidating in December 2008, with appointment of a trustee under the Securities Investor Protection Act. Bernard Madoff individually went into an involuntary Chapter 7 liquidation in April 2009. His bankruptcy case was consolidated with the firm's liquidation. Madoff is serving a 150-year prison sentence following a guilty plea.

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Times: Happy Madoff Investment Fraud Day

The Times' Paul Sullivan reminded us to wish everyone a happy Madoff day on this 4th anniversary of the discovery of the massive investment fraud, "On ‘Madoff Day,’ Think About How to Avoid Becoming a Victim of Fraud".

Just for the record we did not know until we saw it in the Times that today was called "Madoff Day" and indeed we are ambivalent about that.

And further for the record, we are not sure there is much good advice in Mr. Sullivan's article, to wit, this pearl of wisdom about avoiding fraud, "So how do you protect yourself? The first step would seem to be picking an honest adviser." Well, doh.

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The Talmud of Madoff and Wiesel: Review of a Drama at the Garage Theatre at FDU in Teaneck: Extended to November 18

We recommend that you go see the Madoff Drama at the Garage Theatre at FDU in Teaneck, now extended to November 18.

We saw it, and our instant review is that this is a worthy play and a spirited first-rate production by a polished professional group - and right here in our back yard!

Talmudic Review

There are Talmudic references in the script of "Imagining Madoff." But that is not what makes it a Talmudic play. No, it is Talmudic because it creates a drama of debate and dispute over cosmic issues brought down to earth as a dialogue between metaphoric characters. That is what the Talmud of Babylonia did for Jewish thought 1500 years ago.

This play is not about the real Bernie Madoff who was the greatest financial scammer in history, Nor is it about an Elie Wiesel type of character who represents a loud moral voice in an amoral world.

No this play is a work of Talmudic discourse where the playwright weaves into dialogues and discourses - a variety of dialectics about life. Deb Margolin has given the two main characters names, Madoff and Galkin. And she has created a third important woman character who sits and observes on the sidelines.

Throughout, this play has no real connection to actual persons living or dead. And that may be the case for much of the materials in the actual Talmudic literature as well. (But that is a topic for discussion in the learned world of academic publications.)

The Talmud is a long and engrossing work of literature that takes up numerous issues related to life and to Judaism, to men and to women, to emotions and to ideas, and puts them into the mouths of larger than life rabbinic figures.

And so is this play. Not quite as long as the Talmud, and not as comprehensive. Still playwright Margolin manages to raise penetrating moral, ethical, psychological and philosophical issues within the parameters of a three person drama.

Michael Bias dazzles in his understated and calm portrayal of the Bernard Madoff character, Though we never met the actual man, we imagine that Madoff must have put on a soft and remote persona to attract so much investment. Here Bias plays the busy earthy scheming human archetype, a foil for his lofty universal counterpart.

Thom Molyneaux excels as as that counterpart, the sage Solomon Galkin, with a persistent and learned character portrayal of a Wiesel substitute. We did meet Elie Wiesel and know him to be a masterful listener and a persistent voice of conscience. Molyneaux plays the rabbinic Galkin with such aplomb, we'd swear on a Bible that the actor is Jewish, if not Orthodox, though he is not.

And Mikeala Kafka shines as Madoff's secretary. She represents the perspective of the outsiders, both men and women, who watched as a great cosmic tragedy unfolded as the Madoff crisis unraveled. Here she stands in for the world at large - playing for us a single peripheral character who suffers stinging loss and humiliation when the tragic character falls. Many of us can identify with the perspective of the thoughtful and sensitive sideline casualty that Kafka creates. (And Kafka, what an ironic name for the actor that plays that character!)

Though this is a play mainly of monologues and dialogues, it moved quickly and never lagged or lost me. You'd be foolish to miss it. Hurry and get your tickets.

Go today and buy your tickets here. The Facebook page is here.

Summary from the Garage Theatre:

Our first play of the season is Imagining Madoff by Obie–Award winning playwright Deborah Margolin. It is a provocative, compelling and somewhat controversial piece. When Ms. Margolin sent Elie Wiesel the original version of the script that fictionalizes Wiesel’s real life betrayal by Bernard Madoff, the renowned author wrote back, threatening to take legal action against any production. Margolin revised the script, replacing the Wiesel character with the fictional Solomon Galkin, a poet, synagogue treasurer and translator whose moral bona fides and belief in Madoff's magic at once make for a crackling dramaturgical tension.

But above and beyond anything else, Imagining Madoff concerns itself with the terrible beauty and magnificent danger of absolute faith, either in God or in Men.

Imagining Madoff is a suspense drama crafted from a story that is already known. We share as an audience a sense, even to the end, that we can change what's already past.

It is a moral investigation.

Imagining Madoff is directed by Frank Licato and features Michael Bias as Bernard Madoff, Thom Molyneaux as Solomon Galkin, and Mikeala Kafka as Madoff's secretary.

There will be 12 performances of Imagining Madoff, Oct 25 – Nov 18. Thursdays, Fridays and Saturdays at 8pm, Sundays at 3pm.
Every Thursday is Bergen County Night. If you live or work in Bergen County, tickets are just $20.

At the conclusion of each performance there will be a talk back with the audience. The talk back will include the actors, director and the playwright. By giving our audience, both young and old, this opportunity, we hope to inspire a new generation of theatre goers.

All performances are at the Becton Theatre, 960 River Road on the FDU campus in Teaneck.

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Madoff the Musical: Alicia Jo Rabins A KADDISH FOR BERNIE MADOFF

"On November 8 renowned singer-songwriter, composer, musician and poet Alicia Jo Rabins will debut her brand new, full-length performative song cycle A Kaddish for Bernie Madoff at Joe’s Pub in New York City. The controversial piece explores the spiritual implications of the financial collapse through the story of Ponzi schemer Bernie Madoff, attempting to uncover hidden meanings in this contemporary tragedy. A second performance follows on November 15."

Read more: ...

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Post: Trustee Irving Picard wants to undo Ezra Merkin's settlement with NY State

Trustee Irving Picard wants to undo Ezra Merkin's settlement with NY State.

The trustee tasked with unwinding Bernie Madoff’s fraud is trying to block the state from paying $410 million to investors with fallen money manager Ezra Merkin. 

Irving Picard, the court-appointed lawyer responsible for clawing back money for Madoff victims, wants a bankruptcy judge to block a settlement between New York Attorney General Eric Schneiderman and Merkin, who has been accused of secretly steering client money to Madoff’s massive Ponzi scheme. 

In a sharply worded motion filed with the US bankruptcy court in Manhattan, Picard said Schneiderman’s settlement will “wreak havoc” on his efforts to recover funds for Madoff victims.

“Every victim should be treated equally,” Picard said. “That fundamental principle cannot be abrogated by the state of New York.”

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More of Merkin’s Madoff Murky Money Matters

Businessweek reports news of Merkin’s Madoff money matters:

J. Ezra Merkin’s so-called feeder funds for Bernard Madoff’s Ponzi scheme will pay investors $110 million, bringing total recoveries to more than $500 million.

The third cash payment by Merkin’s Ariel and Gabriel funds, which has been approved by a New York Supreme Court judge in Manhattan, will be delivered within about 10 business days, liquidator Bart M. Schwartz said in a statement dated today that was e-mailed to Bloomberg News. The payments are separate from the money recovered for Merkin’s former investors by New York Attorney General Eric Schneiderman in a $410 million settlement of a state lawsuit against the investment adviser, Schwartz said.

The $500 million payback from the two Merkin funds may be the largest so far in the Madoff case, Schwartz has said. Irving Picard, who is liquidating the Madoff brokerage, has paid customers about $333 million since the fraud collapsed in December 2008.

More distributions to Ariel and Gabriel investors are coming, Schwartz said in the statement. While Madoff bought no securities, Ariel and Gabriel invested in other funds, including Cerberus Capital Management LP, with assets that Schwartz could sell to raise money for the payouts, according to court papers.

Merkin was originally sued by Andrew Cuomo, then New York’s attorney general, for allegedly steering $2.4 billion to Madoff in exchange for almost $500 million in fees. As a result of Madoff’s scheme, investors in four funds controlled by Merkin lost more than $1.2 billion, the attorney general’s office has said.

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VIDEO: Waves sweep Tyler Madoff out to sea in Hawaii

A tragic act of nature swept a New York boy out to sea. A high unexpected "freak set" of waves caught a group of young hikers off guard near the Captain Cook monument on the Big Island of Hawaii.

We visited there last year and spent two hours snorkeling in the cove near the monument. The seas were calm that day but they can get big and rough on other days. (And as far as we can tell, the victim of this terrible act of nature is not related to Bernie Madoff.)

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Is Peter B. Madoff Jewish?

Yes, Peter B. Madoff, brother of Bernard L. Madoff is a Jew.

Madoff's grandparents were Jewish emigrants from Poland, Romania and Austria, according to Wikipedia. Peter is a member of the Old Westbury Hebrew Congregation.

The Times reports that he will plead guilty to crimes connected to the Madoff Ponzi scheme.

For nearly four decades, as the second-in-command at Bernard L. Madoff Investment Securities, Peter B. Madoff ran the family business alongside his older brother.

On Friday, Peter Madoff — more than three years after his brother, Bernard, confessed to running a vast Ponzi scheme that swindled investors out of billions of dollars — is expected to appear in Federal District Court in Manhattan and plead guilty to criminal charges, according to prosecutors. He would be the first relative of Mr. Madoff’s to admit to wrongdoing in connection with the fraud.

Peter Madoff has agreed to a prison term of 10 years, prosecutors said in a letter filed with the court on Wednesday. As part of his plea deal, he has agreed to forfeit $143 billion, a staggering penalty that he is not likely to be able to pay. But it is a government calculation based on the amount of money that passed through the firm and a clear indication that prosecutors will seize all of his assets....

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Where is the Fifth Avenue Synagogue?

Just where is that Fifth Avenue Synagogue, called by the New York Post shortly after the Madoff-Merkin scandals broke, the "Temple of Doom?"

Someone we know was invited to a life-cycle event at the Orthodox Fifth Avenue Synagogue but ended up at the Reform Temple Emanuel looking for the simcha.

How did that happen? Well Emanuel is actually on Fifth Avenue at 65th Street. And it really does look like a formidable synagogue. It is "the largest house of Jewish worship in the world." (See the picture.)

The Fifth Avenue Synagogue is not on 5th Avenue. It is on 62nd Street.

And the Fifth Avenue Synagogue does not look like a formidable house of worship. It looks like a modest row house with odd-shaped windows.

Now, there is nothing wrong with naming a place "Fifth Avenue" even if it is not actually on Fifth Avenue. Saks Fifth Avenue has its main store on Fifth Avenue. But its branches in New Jersey are still called Saks Fifth Avenue. That makes them sound fancy and upscale, and that is the point.

Saks also has an "Off Fifth" store in the Bergen Mall in Paramus where they sell discounted fancy and upscale merchandise.

So for the record, in case you are looking for it: The Fifth Avenue Synagogue is off Fifth Avenue at 62nd Street. But just because it is off Fifth, don't expect any discounts or bargains on anything classy there. (Repost from 1/2/09)

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New Yorker's Talmudic Account of a Madoff Panel

From 1/19/09 we replay this (lightly) Talmudic analysis in the New Yorker of Madoff, starting with the premise that he was a goniff which is worse than a gazlan. With sex expert Ruth Westheimer quoting the sage Hillel. Also appearing Michael Steinhardt talking of the, "Banality of investing."

It was a clever current events report of a New York Jewish soiree that itself was an attempt to take a financial tragedy and try to kvetch it to death.

Reckoning: Thief or Crook?
by Lizzie Widdicombe

As anyone in New York can attest, there are multiple Bernie Madoff trials in the works, in addition to the bankruptcy case and the criminal one. “The Talmud makes a distinction between a thief and a crook,” Rabbi David Gaffney said last week, at the YIVO Institute for Jewish Research, on West Sixteenth Street, which was presenting a sold-out panel titled “Madoff: A Jewish Reckoning.” “A crook is somebody who comes in with a gun and holds people up. A thief is someone who comes in the night and steals his way into someone’s home. The thief is a more despicable person in the Jewish mentality, because he thinks he’s fooling God.”

This metaphysical accounting for Madoff’s alleged crimes was the theme of the panel, which was convened by Martin Peretz, the editor-in-chief of The New Republic, and included the historian Simon Schama, the philosopher Michael Walzer, and the prominent businessmen Michael Steinhardt, Mort Zuckerman, and William Ackman. Steinhardt, who has a bushy white mustache and wore an American-flag necktie, was standing in the lobby before the event, talking to his wife on his cell phone. He said that she had a problem with the event, and he handed the phone over. “I don’t like the title,” she said. “What do you think it means?” After a second, she added, “We’ll see what the geniuses say.”

First up was Zuckerman, who, Peretz noted in an introduction, “sits at the table of the mighty” and “also lost a pocket of money to Madoff.” (The Mortimer B. Zuckerman Charitable Trust was invested with the Madoff-connected fund manager J. Ezra Merkin.) Zuckerman said that he disliked the phrase “a Jewish reckoning.” “It’s a Ponzi scheme,” he said. “The last time I checked, Ponzi was not Jewish. He was Italian.” He pointed out that Kenneth Lay, of Enron, “was never identified as a prominent Protestant energy broker.” He brought up the word “credit,” which, he noted, comes from the Latin credere, “to believe,” and concluded, “What Mr. Madoff did and what Mr. Merkin did was to undermine trust.”

Next, Schama talked about the historical links between anti-Semitism and capitalism, going back to the tulip bubble of seventeenth-century Holland. Quoting Thomas Carlyle’s “The French Revolution,” he said, “O shrieking beloved brother blockheads of Mankind!,” and went on, “It may be necessary for us to grieve and shriek and sit shivah over this particularly ghastly moment in our collective life.” Steinhardt, who lost money with Madoff, too, wondered, more simply, “What was so special about this guy?” Echoing Hannah Arendt, he decried “the banality of investing,” and he came down hard on the charities that had trusted Madoff.

Ackman was next, and he used his turn at the lectern to defend Merkin. “My guess is that Mort, No. 1, never read the offering memorandums,” he said. “Mort called him up and said, ‘I’d like to give you some money,’ and Ezra probably said, ‘Terrific. I’ll send you a copy of the documents,’ and his secretary filled them out.” (Zuckerman had left the panel early. The next day, he told Ackman that this was not the case.) Ackman said that Merkin wasn’t a bad man. A hand went up in the audience: “Don’t you think that, at least, we can call Ezra Merkin a lazy man?”

Ackman said no, and this led to a dispute with Peretz, who is the chairman of the Board of Overseers of YIVO, about whether it’s appropriate for charity-board members to manage their own charity’s money. Peretz said, “Let me say, YIVO didn’t have a dime with Madoff.”

“But YIVO doesn’t have a dime,” Ackman replied.

Peretz said, “There are ways to remedy this.”

The conversation turned to the S.E.C. (“a bunch of wusses”), and Peretz grew impatient. “I want a Jewish question,” he told the audience. An older woman in a purple vest raised her hand. Speaking from a theological perspective, she asked, “What would be an appropriate punishment for Bernie Madoff? Excommunication? Strip him of money, an eye for an eye?” Someone else suggested, “Stoning?”

When the session was over, the audience poured into the aisles. “I think it was fascinating,” said Ruth Westheimer, the sex doctor, who’d been sitting up front. She was especially happy because at first she’d been stuck in an overflow room with a simulcast screen. “In the Jewish tradition, there is someone by the name of Hillel,” she said. “He didn’t have enough money to study, so he’d go up on the roof and listen. I paid for my ticket. Thirty-five dollars and ninety cents.” Peretz, too, was pleased with the panel, though he wished people hadn’t been so touchy about the title. The phrase “Jewish reckoning” wasn’t supposed to have Biblical overtones, he said. “I just made it up.” ♦

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J. Ezra Merkin settles Madoff-related lawsuit with New York | Reuters

Reuters, the Times and other sources report that J. Ezra Merkin settled his Madoff-related lawsuit with New York Attorney General. Merkin will make restitution. The Times reports, "Hedge Fund Manager to Pay $405 Million in Madoff Settlement," By DIANA B. HENRIQUES:

Clients of J. Ezra Merkin, a prominent Wall Street hedge fund manager who invested his clients’ money in Bernard L. Madoff’s epic Ponzi scheme, will recover more than $400 million under a civil settlement negotiated by the New York State attorney general’s office.

After shaking hands with him on Shabbat at the Jewish Center of Atlantic Beach, we had a distinct sense that after 3.5 years of litigation, Merkin was relieved.

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Teaneck's Moshe Butler pleads guilty to criminal bank and wire fraud

Forbes reports on the tangled web of crimes of a scamster from Teaneck, Moshe Butler, age 33, "Motel Art, Flat Screen TVs, Bad Trades, And Bouncing Checks Collide In Federal Case."

In 2009, Butler was charged in a criminal Information with running a $2.25 million scam, to which he was released on bail pending sentencing.

The final tally has Butler pleading guilty to two criminal Informations charging him with bank and wire fraud....

On June 13, 2012, he was sentenced to 63 months in prison and three years of supervised release; and ordered to pay restitution in the amounts of $2,259,311.35 for the television scheme and $207,375.25 for the check scheme; and ordered to forfeit $208,172.21....more

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How "Rabbi" J. Ezra Merkin Bought His Co-op Apartment at 740 Park Avenue

The J. Ezra Merkin of recent headlines and scandals -- known for eternity as a Bernie Madoff feeder -- and the Merkin family live in duplex apartment 6/7B at 740 Park Avenue.

A book by Michael Gross, 740 Park, is a fascinating account of rich New York through the prism of that single exceptional building.

We bought this book several years ago to read about the really rich folk in the neighborhood where we grew up, including Merkin's upstairs neighbor, our former Brown University buddy, Tommy Tisch (duplex 8/9B), and the rest of the club at the "tony" address.

There's barely a mention of Tommy in the book and the passage on Ezra, mistaken by the co-op board for a rabbi, is now, in retrospect, funny. Here's what Gross says on page 467 about how Ezra Merkin bought his apartment from Faith Perelman:

Faith dropped (Ronald) Perelman’s name, but stayed in 740 until she married plastic surgeon Peter Linden in 1994. The rich get richer; she made about $11 million on her (1978) $300,000 investment.

The buyer, Ezra Merkin was the son of Hermann Merkin, the child of a family of furriers who’d escaped from Nazi Germany. Hermann became an American intelligence officer, a private investor, and one of the philanthropic elder statesmen of New York’s Jewish community.

Like his father before him, Ezra is president of the Orthodox Jewish Fifth Avenue Synagogue, where Faith worshipped. Like Israel Englander, he’s a principal in a hedge fund.

Unlike his sister Daphne, a writer who publicized her rejection by the co-op board at 1075 Park Avenue (she claimed her essay on sado-madochism in a book titled Dreaming of Hitler inspired the turndown), Ezra Merkin is an intensely private man.

Aside from one 1991 tantrum against what he deemed Steve Ross’s mismanagement of Time Warner, neither he nor his Gabriel Capital Corporation is much in the public eye.

Some in the building even believe he is a rabbi. Which may explain why, when he appeared in a yarmulke for his admissions interview at 740 Park, Donald Rynne later told a realtor, board members thought he was a rabbi and were so afraid of offending him they hardly asked a question before accepting him.

Gross created quite a helpful web-site to back up the book, calling it, "Step Inside: 740 Park: the Story of the World's Richest Apartment Building" with a new blog entry there called, "The murky world of Ezra Merkin" and with links to 740 Park Avenue building resources like these:

• Cast of Characters
• Press Release
• Excerpt
• Floor Plans
• Interiors
• Miscellany

Gross' blurb from the web site:

For 75 years, it’s been one of the most lusted-after addresses in the world. Even today, it is steeped in purest luxury, the kind most of us can only imagine. Until now. The story of 740 Park Avenue sweeps across the twentieth century, and Michael Gross tells it in glorious, intimate and unprecedented detail. From the financial shenanigans that preceded the laying of the cornerstone, to the dazzlingly and sometimes decadently rich people who hid behind its walls, this is a sweeping social and economic epic, starring our wealthiest and most powerful old-money families-–Vanderbilt, Rockefeller, Bouvier, Chrysler, Houghton and Harkness-–and today’s new-monied elite: Bronfman, Perelman, Kravis, Steinberg, Koch and Schwarzman. [Last updated 12/30/08 - Reposted.]

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Tzvee's Talmudic blog in New York Magazine

Tzvee's Talmudic blog was mentioned in New York Magazine Comments this week

Talmudic Books for Kindle on the Talmud, Bible, Kabbalah and Prayer
The Kindle Edition of the Classic Soncino Talmud in English

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NYMagazine: A Talmudic Discussion of New York Scandals - Astor, Madoff, Spitzer, Weiner

In an issue dedicated to the scandals of New York City, New York Magazine has published a compilation of assessments of various experts of which of the four major scandals of recent times was the worst one.

It seems to us like a Talmudic exercise where the opinions of the twenty five "rabbis" are quoted, among them writers, politicians and others. The result is an aggadic compilation for our times - assessing the worst moral actors of the city in this context, "The last four years brought four first-class New York scandals, each epic, tragic, difficult to forget. But which will we still be talking about 100 years from now? We asked around."

Not to spoil it for anyone, in this NYMagazine Talmudic discourse on Astor, Madoff, Spitzer and Weiner, one gentile and three Jews, the hands down winner appears to be Madoff.

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