Despite continued protestations they were as betrayed by Bernard Madoff (above) as anyone else, the New York Times’ Serge Kovaleski and David Waldstein have previously reported that Fred Wilpon and Saul Katz routinely encouraged members of the New York Mets extended family — including former GM Frank Cashen and Flushing pariah Bobby Bonilla — to entrust their fortunes to the since-convicted Ponzi schemer. On Monday, Kovaleski went a step further, alleging the Mets didn’t merely pimp for Madoff, but also helped him evade scrutiny ; “to be amongst those referred by the Mets’ owners, one had to agree to odd and puzzling terms that restricted direct contact with or questioning of Mr. Madoff.”
Those invited into this rarefied club — including relatives of Sterling management, an investment banker who is also a supper club entertainer, a technology entrepreneur and a theater industry executive — would not send money to Mr. Madoff. Instead, it would be filtered through the Sterling partner and the Mets board member Arthur Friedman, a certified public accountant with a law degree who served as the liaison to Mr. Madoff’s operation.
By the time Mr. Madoff was arrested in December 2008, his Ponzi scheme exposed, Mr. Friedman had managed 178 Madoff accounts opened for friends and close business acquaintances of the Sterling partners, and for some Sterling employees. He also administered 305 other Madoff accounts set up by Sterling partners for themselves, their families, trusts and Sterling-related entities.
The rules, at Mr. Madoff’s request, were clearly stated in advance by the Sterling partners to investors invited into the club. Account holders were never to speak directly with Mr. Madoff or anyone at his business, Bernard L. Madoff Investment Securities. All communications regarding any of the accounts had to go through Sterling. Clients would receive monthly paper statements from Mr. Madoff, though the year-end tax statements were sent from Sterling.
One woman who, along with her husband, held several accounts with Mr. Madoff said she thought it was peculiar that they were told never to communicate with Mr. Madoff, but it did not stop them from wanting in.
“We never questioned the fact we weren’t allowed to contact Madoff because of our confidence in Sterling,” said the woman, who did not want to be identified as an investor with Mr. Madoff. “We invested because we trusted these two people absolutely; because they were big business and we assumed they knew what they were talking about.”