The Last Few Desperate Weeks Of Madoff Inc.

With reports of threats of being shut out of future funds if they didn’t pony up for a new (higher returning thanks to lots of leverage) fund immediately and shakedowns of old friends (and promoters!), it sounds like Madoff has been doing a lot of dancing very, very, very quickly this fall.

NY Post: Sources said that leading up to his shocking arrest on fraud charges, Madoff hit up good friend and business partner Robert Jaffe. He also asked for help from garmento Carl Shapiro, the first person to invest in Madoff’s business and who’s Jaffe’s father-in-law.

Madoff’s desperate, last-minute pleas for more money also extended to his hedge-fund investment partners, including Walter Noel’s hedge-fund firm Fairfield Greenwich, a major Madoff promoter, sources told The Post.

…Carey O’Donnell, a spokeswoman for the Jaffe-Shapiro family, was unable to confirm the amounts invested, but confirmed with The Post that the family “made an additional, significant investment” in recent weeks with Madoff’s firm.

…Madoff was also working with Fairfield Greenwich and other hedge-fund firms to raise money for a new batch of funds to attract more investors.

The new funds promised returns in the ballpark of 16 per cent – higher than the existing Madoff funds – because they used more leverage than the 3-to-1 ratios that Madoff used in existing funds, one source said, adding that the plan was in the works as recently as Dec. 11 – the day Madoff was taken into custody by authorities.

One potential investor told The Post that Fairfield was telling investors on behalf of Madoff that they would be shut out of Madoff products in the future if they opted to withdraw from his existing funds or took a pass on participating in the new funds being set up.

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