by Josh Marshall - December 19, 2008
Frank Dipascali, referred to in the media as either Madden CFO or senior execuive, is married to Joanne Dipascali, an employee of JPMorganChase National Association, the private banking arm of JPMorgan. Frank is the only non-family employee working on the 17th floor who has been publicly identified to date. (Charles Wiener, another 17th floor employee, is Bernie's sister's son.)
JPMorganChase was Madoff's custodian bank. At the end of every reporting period, Madoff's brokerage firm liquidated its holdings to avoid SEC disclosure requirements. That alone should have been a red flag for the SEC in 2006. The SEC also should have confirmed Madoff's cash balance at 12/31/05 with JPChase as a matter of routine. A couple of posts ago, I speculated as to why the Madoff family trusted someone named Dipascali and whether organized crime is involved in the scandal. Now I read that Joanne Dipascali is from Howard Beach. Not for nothing but a lot of members of organized crime are out of Howard Beach, too. She also lived in Island Park, home of Alphonse D'Amato and Phil Basile. The Dipascalis now live in Bridgewater NJ and appear to be enjoy marlin fishing on their boat, the Dorothy-Jo. In fact, the Dipascalis like fishing so much, Joanne started a business named Dorothy-Jo Sportfishing LLC which, according to Manta, is in the Sports Club/Manager/Promoter business. Great way to launder money! I am surprised no one in the press has reported the the link between Madoff's firm and JPMorganChase. I don't know if one has to do with the other but the stock fell on 12/15. It also fell substantially in late November. Someone might have had advance notice of pending problems at the bank.
If Madoff was working with organized crime, the SEC and the exchanges are not going to tell John Q. Public about it, investor confidence and all that. I'm starting to wonder if Treasury Secretary Henry Paulsen is lending taxpayer money to banks to buy other banks to cover up an even bigger scandal in the markets. Maybe somebody became curious enough to check whether any of the banks now being bought actually had cash on hand and they didn't. Remember Businessweek's 1996 story, "The Mob on Wall Street - Part I & II? The wiseguys never got put away like they should have been. For what its worth, information about the Dipascalis is fast disappearing from Google. Whether I'm right or wrong about Bernie and the mob, I want to know why the Madoffs trusted Frank Dipascali with their deepest, darkest secrets and $24 billion.
Bloomberg News by David Glovin - December 19, 2008
Dec. 19 (Bloomberg) -- Bernard Madoff, accused of masterminding a $50 billion investment fraud, was placed under round-the-clock house arrest in his $7 million New York City apartment after prosecutors warned of his “harm or flight.” Madoff, 70, had been subject to electronic monitoring and a 7 p.m. curfew under a Dec. 17 court order. Now he is barred from leaving his Upper East Side apartment except for court appearances, and his building will be watched by security guards and video surveillance, according to a letter from prosecutors filed today in federal court in Manhattan. “The bail conditions are what the government has agreed to,” Madoff’s lawyer, Ira Sorkin, said in an interview, declining further comment. He wouldn’t say whether Madoff had been threatened. Madoff, 70, was arrested Dec. 11 after telling his two sons and federal investigators that he had been using money from new investors to pay off old ones in a massive Ponzi scheme. He said clients of New York-based Bernard L. Madoff Investment Securities LLC lost $50 billion. Assistant U.S. Attorney Marc Litt said in the letter, sent to U.S. Magistrate Judge Theodore Katz in New York, that Madoff’s wife, Ruth, will pay for the surveillance. Katz agreed to the conditions.
‘Harm or Flight’
The security service, which will be in place by tomorrow, will watch Madoff’s doors and will be able to send a signal from an observation post to the Federal Bureau of Investigation, according to the letter. One reason for the new bail conditions was “to prevent harm or flight,” the government said. The New York Daily News reported yesterday, citing an unnamed source, that Madoff and his family were threatened with harm if he didn’t repay investors. Other bail conditions remain as before. Madoff posted a $10 million bond, guaranteed by his wife and brother Peter, and he and his wife have agreed to surrender homes in Manhattan, Montauk, New York, and Palm Beach, Florida, if he flees. Madoff remains subject to electronic monitoring. The Manhattan apartment is worth about $7 million, according to bail papers. Ruth Madoff, who hasn’t been accused of wrongdoing, also has surrendered her passport. Madoff, who hasn’t formally responded to a securities fraud charge against him, is due to return to court Jan. 12, unless prosecutors indict him before then. Prosecutors and defense lawyers may also agree to postpone the court date. In an interview yesterday, Sorkin said Madoff’s company is “cooperating fully with the government.” Madoff met with prosecutors earlier this week, according to people familiar with the case. The case is U.S. v. Madoff, 08-mag-2735, U.S. District Court, Southern District of New York (Manhattan). To contact the reporter on this story: David Glovin in U.S. District Court in New York at email@example.com.