Even after Bernard Madoff confessed that his fund had been a giant Ponzi scheme, the partners at Fairfield Greenwich Group authorised a $1.5 million payment to Mark McKeffry, a partner and the General Counsel of FGG. Although the amount of money is small in comparison with the hundreds of millions of dollars FGG partners took for themselves over the year, the payment illustrates the recklessness of FGG when it comes to its clients money.
According to the documents filed by William Galvin, Massachusetts Secretary of State, Fairfield had already learned that only $100 million of the $7.5 billion it had invested with Madoff remained. Nonetheless, they were willing to make sizable payments to themselves from the tiny amount remaining.
In an email dated December 14th, the Sunday following Madoff’s December 11th arrest, FGG partner Jeffrey Tucker instructs CFO Daniel Lipton to make a payment of $1.5 million to McKeffry. He notes that co-founder Walter Noel has agreed to the payment.
With Walter’s concurrence we have agreed with Mark’s request that the firm wire $1.5 million to him. Please do so at your earliest convenience.
Four minutes later Lipton forwarded this email to an employee named Matthew Levinson with instructions to make the payment the very next day. Levinson’s response is telling.
done. Record as distribution, guaranteed payment, loan?
This is a great little illustration of the FGG way: send the money first, ask questions later.