Bernie Madoff

Dodgy Ponzi scheme ratbag was a rooter too

It seems that Bernie Madoff wasn’t just screwing his clients, he was screwing the crew as well. And it appears he wasn’t fussy either.

Bernie had billions and this was one of his roots?

Bernie had billions and this was one of his roots?

When he wasn’t screwing everyone, he was screwing everyone.

Unbridled sex fueled the Madoff machine – and the Ponzi scheme king got himself tangled up in a love triangle, according to bombshell papers filed late Thursday. ? Read more »

A ponzi scheme called welfare

In the US and in Europe there is great debate about retaining “entitlements”?promised?by?successive?governments.

The same goes for New Zealand…especially with schemes such as ACC, Superannuation, interest free student loans and Welfare for Families. Those programmes all have to be paid for and as Margaret Thatcher once said…eventually you run out of other people’s money to spend.

Sometime soon our politicians are going to have to start being honest with us.

If there were not a single Republican, or none who got elected to any office, arithmetic would still end “Medicare as we know it,” for the simple reason that the money in the till is not enough to keep paying for it. The same is true of Social Security.

The same has been true of welfare state programs in European countries that are currently struggling with both financial crises and riots in the streets from people who feel betrayed by their governments. They have in fact been betrayed by their politicians, who have promised them things that there was not enough money to pay for. That is the basic problem in the United States as well.

We are not yet Greece, but we are not exempt from the same rules of arithmetic that eventually caught up with Greece. We just have a little more time. The only question is whether we will use that time to make politically difficult changes or whether we will just kick the can down the road, and keep pretending that “Medicare as we know it” would continue on indefinitely, if it were not for people who just want to be mean to the elderly.

In both Europe and America, there are many people who get angry at those who tell them the truth that the money is just not there to sustain huge welfare state programs indefinitely. But that anger might be better directed at those who lied to them by promising them benefits that were inherently unsustainable.

Neither Social Security nor Medicare has ever had enough assets to cover its liabilities. Very simply, there has never been enough money put aside to do what the government promised to do.

These systems operate on what their advocates like to call a “pay as you go” basis. That is, the younger generation pays in money that is used to cover the cost of benefits for the older generation. This is the kind of financial pyramid scheme that got Charles Ponzi put in prison in the 1920s and got Bernie Madoff put in prison in our times.




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Bernard Hickey, the NZ Herald and Stuff are all crowing about Mark Hotchin again. It is almost gleeful. A touch of H-Utu. This time about his name suppression and falling for a dirty Ponzi scheme back in 2o04. They are mocking a victim. They don’t mock the victims of all the other frauds out there so why mock the victim in this case?

The point of name suppression in many cases is the protection of victims, in this case Hotchin was the victim and yet the NZ Herald saw fit to seek to overturn a permanent name suppression order designed to protect victims. They did what Judge David Harvey said could not be done, that the only people who could overturn a court ordered permanent name suppression was either the victim or the court who ordered it in the first place.

It appears now that any name suppression can be validly challenged by any news?organization?or indeed any interested party seeking to crucify a victim.

My campaign against name?suppression?was for the removal of the?practice?for the criminals. The Herald’s actions and the?gleeful?vitriol and running of sensationalist headlines by financial commentators who are themselves a bunch of broken-arses by comparison. There is a old line that if you can’t do, you teach and if you can’t teach, you write about people who do. This fits the financial correspondents perfectly, who collectively probably don’t muster enough in assets to cover?the?amount lost by Hotchin and Finnigan in?the?Ponzi scheme.

Using the logic of Bernard Hickey:

Hotchin was given permanent name suppression, which has only now been lifted after a challenge from the NZHerald. Strategic Finance boss Kerry Finnigan was also duped and also got name suppression.

If only the Rotorua District Court judge James Weir hadn’t granted permanent suppression, thousands of Mum and Dad investors might not have lost over NZ$500 million in Hanover and over NZ$300 million in Strategic Finance…and counting. Thanks for that.

then none of these people should be anywhere near running a company or even investing or indeed offering advice:

Victims from big business include hedge fund manager Arki Busson and US property magnate Larry Silverstein, who is currently working to rebuild the World Trade Centre in New York.

A number of large banks, including UBS, Citigroup, Deutsche Bank and Bank of America, were also named in the filing.

From the world of politics, trusts belonging to the family of former US Secretary of State Henry Kissinger appear, as does the name of current New Jersey Senator Frank Lautenberg.

The full?list?of Bernie Madoff’s wealthy and famous victims is?available?on the internet in an easily accessible format. Is Bernard Hickey suggesting that none of those people should ever run a company or give investment advice and all should also be a target of derision for having the temerity to fall for a complex and elaborate long-term fraud?

In a Ponzi scheme, the Bank cops a?flogging?too, and are essentially part of the fraud. I hope that Bernard’s bank isn’t the same one as the bank used by Papple and West, Westpac. I note that Bernard Hickey has all the Westpac investment products listed on….given his new position shouldn’t he really be?recommending?to his readers that, since they participated and fell for the Ponzi scheme themselves then investors in Westpac would be best to take their money elsewhere.

Then again, some already did that when they walked out of the country with $10 million of Westpac’s cash. Funny thing is, I didn’t see?Bernard?Hickey telling Westpac customers to stop investing in the bank when they couldn’t keep track of $10 million. So long as Westpac keeps the cheques coming to then?Bernard?will stay mum.

The logical conclusion of Hickey’s farcical suggestions and “analysis” is that anyone, and I mean anyone, who has had an accountant nick cash from their firm, handed over funds to a Nigerian 419 fraud, or “invested” in a Ponzi scheme, or indeed thought Amway was a path to success, should be barred from running a company.

What is worse though is the history of the Herald’s involvement in this case. They clearly, back in 2004, used Hotchin and Finnigan as a confidential source for their story:

One prominent company director told the court he did not want the public to know he was “conned” for more than half-a-million dollars.

The man, who has been granted name suppression by Judge James Weir, said he was advised to apply for suppression because it would be better if the Papples and West were not publicly associated with his companies.

It was revealed in court that the man had been a director of 71 companies, including a prominent finance company, although he said he had recently moved to Australia and had resigned from a number of directorships.

It was important for him not to be connected with the Papples and West, as he had been “duped into doing an investment with people who conned me for a lot of money”, he said. “I don’t want to make that public.”

The man had told the court he invested $561,066 with the trio.

He received a payment of $120,000, followed by a further three sums totalling $336,000.

The Herald has known about this for 6 years and they shamelessly used the confidential information for their story then used that information 6 years later to over-turn a name suppression case. People should be very wary of providing confidential information to a Herald journalist from now on, they will turn on you and cut your heart out just to sell papers. They will betray a confidence to justify a taudry headline.

Not only that during this whole time they ran Hanover ads in their paper, and on their website,. They have performed the business equivalent of raping the victim all over again except they did it to sell papers.

Bernard?Hickey isn’t much better, he too took?advertising?revenue from Hanover. Did he know about this all along? Remember Bernard Hickey still writes for the Herald.

In the interests of fairness, surely the Herald and Bernard Hickey should pay back all the “dirty Hanover cash” they took while sitting on this information for 6 years. If the investors should have been told back then, then their cash for advertising is just as tainted as anyone elses.

To get back to the name suppression issue, the wonder is that the Herald isn’t in court seeking the overturning of every person’s name suppression but then a great many of those people won’t sell tell many papers, but Mark Hotchin’s name does.

Bernard Hickey and other financial media might like to think and enjoy the?schadenfreude but they should really hang their heads in shame at their utter hypocrisy and breach of their own ethics and standards that they hold so dear as the reason why they are superior to bloggers. If they had even a modicum of decency they would apologise and pay back all the filthy loot they took in advertising revenue and related puff pieces at the time.

If I was Mark Hotchin, or even one of his advisors, I would be laying a complaint with the Press Council for breaches of ethics.

Cactus Kate on Hotchin case

Cactus Kate must have plenty of time on her hands while she is sunning herself in Bangkok. I say this because she has put out two posts showing that she is continuing her crusade to hold the statutory authorities and?the?media accountable for their apparent sloppiness in their investigations and?repeat-age?surrounding Mark Hotchin.

It also shows her impartiality that she is looking with increasing incredulity at the actions of the authorities toward New Zealand’s second most hated man after Clayton Weatherston.

Freezing orders in law are meant to not be granted lightly and be temporary in nature while investigations are completed and with some certainty that charges will be anticipated. Hotchin’s very blanket freeze order was the first under the relevant sections of the Securities Act, however there is reasonable precedent prior for fraud allegations and other New Zealand legislation allows freezing of assets.

The SFO investigation into Hanover was meant to be well completed at?Christmas. As was the Securities Commission’s as to whether to?lay criminal charges. It has dragged on and on. Regardless of the reasons it is now becoming ridiculous.

Hotchin has even claimed that he hasn’t been told what is being investigated. That is there is no specific reference to what he is being investigated for other than a general poke and feel around based on HUtu (Hanover Utu) and sensationalism running rampant in the media and in the public along with all other finance companies. A “fishing expedition” as we call it.

S60G of the Act broadly allows freezing in three situations:

– criminal prosecution have begun
– civil proceedings have begun
– where securities commission are carrying out an investigation into acts or omissions by the defendant.

I like her new name – HUtu. However on the face of it this really does seem to be a trawling exercise to try to find something, anything, just something in order to save face. Now correct me if I am wrong here, but i thought fishing expeditions were illegal. Perhaps under?the?auspices of the SFO they can be as broad as they like but I’m pretty sure that normally authorities need to be pretty specific about what they are after before they go after it.

While Hotchin isn’t the favourite public figure in New Zealand, this case is making for ridiculous precedent. In the meantime Hotchin has had to pay bills, sort creditors and keep businesses moving and progressing. He also owes money to the IRD. I wonder what the IRD feels about the freeze order and whether they will apply to have it lifted themselves to be paid? The taxman waiteth for no one.

No other decision-making director of Hanover has been subject to such an order, no attempt either has been made to freeze Eric Watson’s New Zealand based assets let alone his foreign ones. Hotchin has wore the entire Hanover matter on his own despite in each instance being just one of several directors.

While the general public seems to care none about any swanky car driving, long lunching businessman having anything frozen, which is fine, but everyone should care about antiquated orders such as this seeking to deny an accused (if he’s even that as again there’s been no charges) even the right to the basic presumption of innocence let alone speed in the investigation.

Cactus makes a good point. The lefty blogs are wanking on endlessly about the Urewera 17 being denied open justice and yet remain strangely silent on apparent singling out of a single director who has yet to be charged. Those same liberal panty-waists are the same one who cry a river of tears about the presumption of innocence regarding pedos and?rapists?and that is the reason why name suppression should be retained, yet remain silent on the public vilification in?the?media of an uncharged man and the use of the judiciary to cosh the same man under the?authoritative?thumbs of incompetent investigators who haven’t found a thing in 5 months.

The inconsistency is obvious:

I will give an example of what has happened to Hotchin using a street level scenario. Right now Headhunters, Black Power, Highway 61 and Mongrel Mob gangs happily launder money through bank accounts in New Zealand under guises of associates and members. Most known to Police and the Organised Crime Unit they stick their all ill-gotten gains into banks, property and other investments or assets. I’ve even heard of a charitable trust structures being used by gangs to have “donations” paid into.

Do the authorities freeze their assets on suspicion of fraud or while being investigated? Of course not because gangs are constantly under investigation. They let gangs hold assets because they haven’t got enough evidence to bust them. They are continually investigating them yet their assets stay in tact while this happens and they watch the accounts. The Organised Crime Unit doesn’t just slap a freeze order on the account suspecting they’ve got the money from drugs, guns or crime. All money from gangs comes from some sort of crime, by definition. They aren’t making anything through legitimate 9 to 5 jobs. Its all from drugs, guns, security, extortion, blackmail and protection.

Imagine the outcry from civil libertarians and Hone Harawira if government agencies went around and froze every bank account of a suspected underclass dirty tattooed mainly Maori gang member? Well there’s no outcry when same happened to the nicely dressed middle-class white male.

Cactus also give Fran(k) a serve for her inconsistency.

Oh it is unfair that the totally peer-less Urewera 18 cannot have a jury trial by their peers or delay justice anymore for the terrorist group. Fran O’Sullivan drafted this rather?compelling argument that China’s human rights record may be close to New Zealand’s using the Urewera model.

But we can freeze Mark Hotchin’s assets for four months without charge, without specific details given to him as to what he’s been investigated for and with no signs of any progress in an elongated investigation spanning some months and prior investigations to this.

I bring the Urewera 18 up as Justice Helen Winkelmann is it is pertinent as she is the Judge both denying Urewera 18 a jury trial and Hotchin, any sense of fair play when it comes to the freeze order. The media and public say one is a travesty, yet the other is not.

Oh now that is very interesting. The same judge, the same treatment against accused, or in the case of Mark Hotchin, still not accused. The media and the pinko luvvies are metaphorical marching int eh streets for alleged terrorists but not for a white guy who talks funny and wears a suit. There is a word for that, and since I am not in parliament i can use it,…hypocrisy.

As usual Cactus gets down to tin tacks in?the?most intimidating yet honest way.

All leads to the conclusion that while John Key Prime Minister can stand up at a meeting and say about the man who cost hundreds of millions in bailout money – “I like Allan Hubbard”, left as the most vilified man in New Zealand is a bloke who hasn’t cost the New Zealand taxpayer a cent in a corporate bailout welfare such as SCF, hasn’t plotted terrorist activity like card-carrying vigilante racist Tame Iti or like the gangs sold “P” to your kiddies or gang raped your daughters.

Ain’t that the truth. I am fast coming to the conclusion that something very rotten is happening. Ultimately with Hanover the investors gamblers all voted to toss their lot in with Allied and when they lost their chump change they all of a sudden have buyers remorse. That is not a crime, especially not when they all voted for it. Nice but dim Allan Hubbard meanwhile was running a nice Ponzi scheme, the New Zealand equivalent of Bernie Madoff and he got bailed out. Each taxpayer in New Zealand has lost far more in SCF involuntarily and compulsorily than the?individual?gamblers lost in Hanover through their own voluntary actions.