Madoff Fundraiser Bob Jaffe Took The Fifth


We obviously have little insight into the inner workings of the FBI’s investigation into Bernie Madoff. The glints we have picked up, usually via what they tell The Journal, suggest that in addition to Bernie, they’ve been particularly interested in his lieutenant Frank DiPascali and his wife, Ruth. But we know the intrigue spreads even wider to guys like Avellino and Bienes and the Noels, who seem to have wilfully ignored several red flags in their dealings with Madoff. Yet we rarely see their names.

We hope they’re working diligently on all those guys, and that they’re pushing for an asset freeze to help repair victims, but in the meantime, it seems like Massachussets Sec. of State William Galvin is making the most progress on this front.

Reuters: After rebuffing subpoenas for weeks, a close associate and key middleman for Bernard Madoff essentially had one thing to say when he finally showed up to testify before Massachusetts regulators: I’m not talking.

Robert Jaffe, who had delivered clients to Madoff, invoked the “Fifth Amendment,” a constitutional right of witnesses who do not want to incriminate themselves, when he testified last week, court documents released on Wednesday show.

The documents and Jaffe’s silence in the face of a barrage of questions by Massachusetts Secretary of State William Galvin illustrate the intensifying focus on middlemen and so-called “feeder-funds” that funneled investor money to Madoff.

“Galvin is taking a novel and aggressive approach to scrutinize the middlemen more closely and find out what they knew and when,” said Jay Gould, who heads law firm Pillsbury Winthrop Shaw and Pittman LLP’s hedge-fund practice.

“Ultimately he is looking if any of these middlemen committed criminal fraud,” added Gould, who once worked for the U.S. Securities and Exchange Commission. “Even being stupid could end up getting you a very severe penalty.”

Thank you. It’s all about the Middleman, and the mindblowing sums with ridiculous fees the took just to be a front. We don’t think it should be all on William Galvin’s shoulders to explore this route. Hopefully it’s not.