Norman Braman and Madoff’s Field of Suckers

Norman Braman got stiffed big-time recently by Bernard Madoff. He was one of many suckers in what is considered the largest Ponzi [or pyramid] scheme in history. This type of scam is so effective, the SEC gave it its own category, affinity fraud. Do you know what his reaction was? After reading it you will have a much better understanding of why Mr. Braman will continue in his efforts to block the construction of a ballpark for a MLB team in Miami. Here is what he told the Miami Herald:

Norman Braman, CEO of Braman Motors, which has operations in Miami, Palm Beach and Denver, said Friday he is one of the investors. “He [Maddoff] had a very stellar reputation,” Braman told The Miami Herald. “I read this morning about Arthur Levitt, former head of the SEC, praising him. That’s how you select people — by reputation.”

Can you appreciate how fragile and damaged an ego lies behind that response? The last time we saw an ego that fragile up close, she was lunging at Michael Douglas with a knife! This old bag of bones, sitting on even bigger bags of money and enough lawyers to support the entire Brickell mistress’ condo market was duped, abused, played, fooled, taken advantage of, and finally victimized like an infant suckling on his mommy’s breast and his reaction is … ‘hey, they got Arthur too!’

Come hither children, gather around. Let me me tell you about a new and pre-owned car salesman man named Norman Braman. He is a wealthy man. He made his wealth selling cars and one NFL team. You know those phony conversations car salesman supposedly have with their sales managers before they try to stiff you, those non-conversations are held for the benefit of people like Norman Braman. After benefiting from thousands of those conversations [average profit of $750 per sale for 20 years], Mr Braman purchased the Philadelphia Eagles for $65 million–along with his brother-in-law business partner, Ed Leibowitz. The city of Philadelphia then spent $65 million to improve Veteran’s Stadium for Mr Braman. Mr Braman sold the team less than 10 years later for $195 million, $130 million and 200% over their purchase price.

For more on the type of owner Braman was, check out The Great Philadelphia Fan Book using Google Book Search–you can read about how Buddy Ryan was the lowest paid coach in the NFL while Braman paid himself $7.5 million and referred to his salary as a ‘few dollars.’ The book further notes:

… he [Braman] owned the team to torture us [fans]. Mr Braman was a soulless, cold-blooded auto salesman who could have easily stood in for Lionel Barrymore in the role of “It’s A Wonderful Life”s’ Mr Potter.

A few months ago–BM, before Madoff–Braman was #286 on Forbes list of the richest Americans. Good for him. There are many ways to acquire wealth, not everyone has to build a better mousetrap or be an innovator. But, the fact that someone has wealth does not mean that the wealth was necessarily earned in an interesting or even admirable manner. Sometimes a solid work ethic and being at the right place at the right time–and not being too concerned about those stiffs waiting back in the sales manager’s office or filling up ballparks–will do the trick.

‘They got Arthur too!’

You’d think the how wealth is acquired would be a moot point once the bank accounts are filled up. You would be wrong, there are always pecking orders. SEC and high finance chieftains like Arthur Levitt are always above the car salesmen of the world, at least in the minds of the car salesmen, so they try harder. Much harder. Typically, they branch out to show personal growth, i.e. discover art. Apparently, once you have the money there is still a series of needs to be filled that would leave Maslow with writer’s cramp. Chief among them is respect; fortunately for numerous charities, it’s the kind you can buy. Actually it’s more of a lease deal, you have to keep paying to keep that kind of respect. So it’s not the highest form of respect, but it will do when you’re trying to keep up with the Levitt’s.

In general, that must be one of the reasons why the kind of people who would run over their own grandmothers in business ‘turn’ into great philanthropists in their doting years. They are the anti-humility pied pipers–yes Virginia, it is about me! Yes, please put my name on that building. So now we know why a Braman continues to sue over Miami’s ballpark. Too much money, too little humility and the type of friends who happen to receive 1099’s at tax time.

But there might be one way to get him to stop. The Marlins should threaten to bring Madoff in as an investor. After all, he should be looking to rehabilitate his reputation, after a brief prison sojourn, in 2012. Madoff will no doubt have kept a healthy chunk and have a deep yearning that the people know what the real Bernard Madoff was like. Modeled after Monument Park in Yankee Stadium, Madoff’s Field of Suckers–each fleeced investor with their own plaque–with an overall theme, the year 2008. The year folks who strive mightily to appear smarter than they ever were, were laid bare or at least were reduced to their last hundred million.

All articles referenced are copied in full at end of post.

Investment fraud has South Florida connections

Posted on Fri, Dec. 12, 2008


Bernard L. Madoff — a prominent Wall Street investment advisor arrested Thursday after allegedly revealing his firm was ”basically a giant Ponzi scheme” that hid billions of dollars in losses from investors — drew many wealthy investors from Palm Beach to Miami.

His wife, Ruth Madoff, owns a $9.4 million Palm Beach home, a five-bedroom, seven-bath property that once belonged to Herbert and Hilary Pulitzer. And Madoff was well known at the Palm Beach Country Club and other country clubs in South Florida, according to an attorney familiar with the matter.

Many of the investors are also wealthy members of South Florida’s Jewish community.

”This has the classic earmarks of an affinity fraud,” said Mark F. Raymond, a securities litigator and managing partner of the Miami office of Broad & Cassel. “In this case, it was done among the affluent and among philanthropic organizations.”

Raymond represents a South Florida businessman who invested $12 million in proceeds from the sale of a business with Madoff. His financial statement says the account has grown to about $25 million, the attorney said.

Madoff, 70, a Manhattan resident, operated Bernard L. Madoff Investment Securities in New York, for 48 years, and had helped found the Nasdaq Stock Market.

Norman Braman, CEO of Braman Motors, which has operations in Miami, Palm Beach and Denver, said Friday he is one of the investors. ”He had a very stellar reputation,” Braman told The Miami Herald. “I read this morning about Arthur Levitt, former head of the SEC, praising him. That’s how you select people — by reputation.”

According to a criminal complaint filed in federal court in New York Thursday, Madoff, feeling pressure as his clients were seeking to some $7 billion in redemptions he could not meet, told two high level employees that his investment advisory business was ”all just one big lie,” and that he was ”finished” and had “absolutely nothing.”

The complaint said Madoff estimated the losses from the fraud to be at least about “$50 billion.”
Alleged Madoff fraud has worldwide exposure

By JOE BEL BRUNO and JANE WARDELL, AP Business Writers Joe Bel Bruno And Jane Wardell, AP Business Writers 5 mins ago

NEW YORK – The list of investors who say they were duped in one of Wall Street’s biggest Ponzi schemes is growing, snaring some of the world’s biggest banking institutions and hedge funds, the super rich and the famous, pensioners and charities.

The alleged victims who sunk cash into veteran Wall Street money manager Bernard Madoff’s investment pool include real estate magnate Mortimer Zuckerman, the foundation of Nobel laureate Elie Wiesel, and a charity of movie director Steven Spielberg, according to The Wall Street Journal.

Among the world’s biggest banking institutions, Britain’s HSBC Holdings PLC, Royal Bank of Scotland Group PLC and Man Group PLC, Spain’s Grupo Santander SA, France’s BNP Paribas and Japan’s Nomura Holdings all reported that they had fallen victim to Madoff’s alleged $50 billion Ponzi, or pyramid, scheme.

The 70-year-old Madoff (MAY-doff), well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested Thursday in what prosecutors say was a $50 billion scheme to defraud investors. Some investors claim they’ve been wiped out, while others are still likely to come forward.

“There were a lot of very sophisticated people who were duped, and that happens a great deal when you’ve had somebody decide to be unscrupulous,” said Harvey Pitt, a former chairman of the Securities and Exchange Commission, a regulatory agency in charge of monitoring investment funds like the one Madoff operated.

The extent of the potential damage prompted a leading fund manager in London to lash out at U.S. regulators for failing to detect the fraud earlier.

“I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they haven fallen down in the job,” Nicola Horlick, the manager of Bramdean Alternatives, which has 9 percent of its funds invested in Madoff’s scheme, told the British Broadcasting Corp.

“All through the credit crunch this has been apparent,” Horlick added. “This is the biggest financial scandal, probably, in the history of the markets.”

Among U.S. investors, the Boston-based Robert I. Lappin Charitable Foundation, a charity that financed trips for Jewish youth to Israel, let go of its staff after revealing that the money for its operations was invested with Madoff.

New Jersey Sen. Frank Lautenberg, one of the wealthiest members of the Senate, entrusted his family’s charitable foundation to Madoff. Lautenberg’s attorney, Michael Griffinger, said they weren’t yet sure the extent of the foundation’s losses, but that the bulk of its investments had been handled by Madoff.

Lautenberg’s foundation handed out more than $765,000 to at least 100 recipients in 2006, according to the most recent listing on Guidestar, which tracks charitable organization filings.

The foundation helps support a variety of religious, educational, civic and arts organizations in New Jersey and elsewhere, and its contributions range from a gift of more than $300,000 to the United Jewish Communities of MetroWest New Jersey to a $2,000 donation to a children’s program at the Hackensack Medical Center.

Reports from Florida to Minnesota included profiles of ordinary investors who gave Madoff their money. Some had been friends with him for decades, others were able to invest because they were a friend of a friend. They told stories of losing everything from $40,000 to an entire nest egg worth well over $1 million.

They join a list of more powerful investors that have come forward, all worried about the extent of their losses. The roster of names include former Philadelphia Eagles owner Norman Braman, New York Mets owner Fred Wilpon and J. Ezra Merkin, the chairman of GMAC Financial Services, among others.

The Wall Street Journal, citing a person familiar with the matter, said Mortimer Zuckerman, the chairman of real estate firm Boston Properties and owner of the New York Daily News and U.S. News & World Report, had significant exposure through a fund that invested substantially all of its assets with Madoff.

The Journal also said the Steven Spielberg charity, the Wunderkinder Foundation, in the past appears to have invested a significant portion of its assets with Madoff. It said the Elie Wiesel Foundation for Humanity, founded by the famed Holocaust survivor and writer, was hard hit by losses, citing two people familiar with the organization’s investments.

Messages were left with the Zuckerman fund and Wunderkinder foundation. The Wiesel foundation said it was looking into the matter.

The Journal also reported potential investors and firms exposed to the alleged fraud included: Carl Shapiro, founder and former chairman of women’s apparel company Kay Windsor Inc.; Bed Bath & Beyond Inc. co-founder Leonard Feinstein; Yeshiva University; EIM Group; UBS AG; Fairfield Greenwich Advisors; Tremont Capital Management; Maxam Capital Management and Ascot Partners.

Among those overseas confirming exposure on Monday, Banco Santander, the largest bank in the euro zone by market capitalization, said its clients have 2.33 billion euros ($3.07 billion) in exposure with Madoff, mostly through a fund called Optimal Strategic US Equity.

HSBC, Britain’s largest bank, said a “small number” of its insitutional clients had exposure totaling some $1 billion in Madoff funds.

It added that it has custody clients who have invested with Madoff, but it did not believe those “custodial arrangements should be a source of exposure to the group.”

Royal Bank of Scotland — Britain’s second-largest bank, which is now 58 percent owned by the British government — said it could lose around 400 million euros pounds through exposure in trading and collateralized lending to funds of hedge funds invested with Bernard L Madoff Investment Securities LLC.

Man Group, the world’s largest publicly traded fund manager that reported exposure of around $360 million on Monday, said “it appears that a systematic and comprehensive fraud may have been committed, evading a range of structural controls.”

Japan’s Nomura Holdings said it has 27.5 billion yen ($306 million) in exposure, but added that any losses were likely to be limited compared to its capital base.

French banks foresee nearly 1 billion euros in potential losses as indirect victims of the alleged fraud.

Natixis, France’s fourth-largest bank, set its maximum indirect exposure at about 450 million euros. A statement by the investment bank said it made no direct investments in hedge funds managed by Madoff. However, it said that some of its clients’ money was invested in funds managed by “first class custodians,” which in turn entrusted those securities to Madoff’s investment securities company.

Both Societe Generale and Credit Agricole said they had “negligible” exposure of below 10 million euros each. However, the euro zone’s largest bank, BNP Paribas, has estimated its risk exposure to hedge funds managed by Madoff at up to 350 million euros.

In a statement Sunday, BNP Paribas said it has no investment of its own in Madoff’s hedge funds, but “does have risk exposure to these funds through its trading business and collateralized lending to funds of hedge funds.”

Swiss bank Union Bancaire Privee indicated it had hundreds of millions of dollars in client assets invested under the management of Madoff. The Geneva bank, one of Switzerland’s largest, did not disclose a total amount invested, but did say the exposure of its clients “represents less than 1 percent of the total assets under management of the bank.”

UBP’s announcement Monday followed weekend disclosures by Swiss banks Reichmuth & Co. of Lucerne, Benedict Hentsch of Geneva and Neue Privat Bank of Zurich that they had millions of dollars worth of client assets at risk in the case.

Unicredit, Italy’s largest bank, said its exposure to Madoff’s company is about 75 million euros, representing amounts the bank invested directly and not funds belonging to its clients, said spokesman Andrea Moreschi. Unicredit has a separate, indirect exposure through Pioneer Investment, its asset management division.

In Germany, Deutsche Bank AG, Dresdner Bank AG and Commerzbank AG declined to comment on the matter.

On Friday, representatives from major U.S. banks — Bank of America Corp., Citigroup Inc., PNC Financial Services Group Inc. and Merrill Lynch & Co. — declined to comment on whether they had exposure to Madoff’s company. Both BlackRock Inc. and Goldman Sachs Group Inc. said they had no exposure.

Morgan Stanley, Wells Fargo & Co., Comerica Inc. and U.S. Bancorp did not return calls seeking comment.

About Jorge Costales

- Cuban Exile [veni] - Raised in Miami [vidi] - American Citizen [vici]
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1 Response to Norman Braman and Madoff’s Field of Suckers

  1. Anonymous says:

    as a former bramanemployee might say; ‘he whom plays the dirtiest gets the promotion’. really norm. if they only knew the half of it. ;o

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