Madoff Talks by Jim Campbell

Author:Jim Campbell
Language: eng
Format: epub
Publisher: McGraw-Hill Education
Published: 2021-06-15T00:00:00+00:00

Fairfield Greenwich Group (FGG), the Biggest Domestic Feeder Fund

Madoff didn’t have much respect for the brainpower of the partners behind the Fairfield Greenwich Group. Cofounder Walter Noel was a sales guy from Greenwich, Connecticut, where the family belonged to the ultra-exclusive Round Hill Club. The other founding partner, ironically, was a former SEC enforcement chief, Jeffrey Tucker.

Noel had homes in Mustique, a small private island in the Grenadines, a chain of islands in the West Indies; Palm Beach; and Southampton, the ritziest section of Long Island. His family was perhaps more suited for the pages of Vanity Fair than Fortune. Indeed, they were profiled in VF. Walter’s wife, Monica, had wealthy parents with homes in Zurich and Rio de Janeiro. Their five daughters went to Harvard, Yale, Brown, and Georgetown. Four of the five would marry into prominent European and Latin American families, almost as if they were building a global feeder fund inside the family with tentacles to money around the world. One son-in-law, Andrés Piedrahita, from Colombia, who was married to Noel’s oldest daughter, Corina, became a sales machine for the family. Lisina, the second Noel daughter, lived in Milan with her husband, Yanko Della Schiava, whose mother was the editor of Cosmopolitan in Italy and whose father was the editor and publisher of Harper’s Bazaar in Italy and France. The third daughter, Ariane, married Florence-born Marco Sodi, who worked at an investment firm. They lived in the Notting Hill section of London. Daughter number four, Alix, married Philip Jamchid Toub, the son of a director of a shipping company in Lausanne, Switzerland. They lived in Greenwich, Connecticut. The youngest daughter, Marisa, married Matthew Brown, an asset manager and son of a former mayor of San Marino, California.

The FGG partners became obscenely wealthy off the Madoff trough, taking in around $920 million in fees in the final six years alone of BLMIS. Piedrahita “earned” $173 million in the six years before Madoff’s collapse. Toub fared well, too, earning $46 million in those final six years. If Madoff had not crashed, the sons-in-laws had their eyes on the emerging wealth in Asia.

Madoff made it clear to FGG that he would not allow any real due diligence, notwithstanding FGG’s representation to their clients that it was their specialty. FGG’s initial investment in 1990, through an offshore fund, Fairfield Sentry, was only $4 million. At peak, they had $14 billion in assets parked with Madoff.

FGG earned $1,808,812,783 in total fees, in what were thinly veiled kickbacks. Although FFG was headquartered in New York City, the funds were registered in the British Virgin Islands, where opacity and tax minimization reigned. They never had any employees or offices there and were prohibited from even doing business there.

Madoff didn’t mince words to me: “Fairfield was guilty of huge deception besides a complete lack of due diligence. They lied constantly to me and clients.”14 Of course, it was Madoff who didn’t allow due diligence and scripted the lies.

Before 2003, in their private placement memoranda (PPM),*

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