Wednesday, April 1, 2009

Sources: Madoff Hid $ in DOE Budget

April 1, 2009 (GBN News): According to GBN News sources, Federal authorities have located close to half a billion dollars from convicted Ponzi schemer Bernard Madoff. The money, these sources say, was discovered in the budget of the NY City Department of Education, and had been transferred to the DOE just before Madoff was arrested last December. It is unclear just how Madoff was able to transfer the money to the DOE, but he allegedly planned to later recoup the money by having it returned to one of his relatives in the form of no-bid contracts.

J. Fredrick Runson, Dean of the Manhattan University Law School and an expert on educational Ponzi schemes, was impressed. “The diabolical beauty of all this is that Madoff managed to hide the money in plain sight," Dr. Runson told GBN News. "It’s right there in the budget, but since there is no real oversight over the DOE, it was extremely unlikely that anyone would find it.”

Dr. Runson was asked how Madoff could know that the money would remain intact, and not be spent by the DOE before he could ultimately get it back. “That’s the real genius in this plan,” he said. “He apparently stipulated that the money be specifically designated for class size reduction. That way, he could be certain that the DOE would never use it.”

3 comments:

Leonie Haimson said...

This is brilliant!

sarah said...

See the Annual Report 2007 Fund for Public Schools page 21

Leonie Haimson said...

Sharp eyes! Bernie Madoff was a contributor to the Fund for Public schools in 2007 -- of an amount between $5,000 and $24,999.

Biggest contributors who gave $1 million or more were : Beat the Streets Wrestling, Inc., The Broad Foundation (of course),
The Carson Family Charitable Trust,
Michael & Susan Dell Foundation,
Bill & Melinda Gates Foundation,
The Kovner Foundation, The Carroll and Milton Petrie Foundation,
The Riggio Foundation (Barnes and Noble), Robertson Foundation and
Mortimer B. Zuckerman, published of the Daily News.