Cohmad, Stanley Chais Get Sued During Run Up To Madoff’s Sentencing

Madoff’s victims have a morsel of retribution to tie them over to the big day next week when the fraudster gets sent down – the litigious net has widened to swallow up alleged co-conspirators at Cohmad, the broker that channelled billions of dollars to Madoff.

It’s surprising that it’s taken this long, considering lawsuits have been brought against other people close to Madoff, like Ezra Merkin, as well as other channellers of people’s money, like Fairfield Greenwich. But none get as close as Cohmad, who operated in the next office to Madoff and was partly owned by him. Maurice and Marcia Cohn, the father and daughter team who ran the company, were either very stupid, or very willing to look the other way. Robert Jaffe, who ran Cohmad’s Boston operation, has had the writing on the wall for some time – you may remember he was almost lynched by a gang of irate Floridian Jews just after the Madoff story broke, and had to be rescued by Donald Trump.

Also getting a civil suit filed against them is Stanley Chais, who looks like Magnum PI leading Friday prayers – he’s another guy who fed funds of others into Madoff’s coffers, bagging $546m in profits and $270m in fees. Like the Cohn’s, he’s either thick or involved – Madoff didn’t report a single loss during thousands of stock trades using Chais’s investments, of which Chais either thought “Wow, what a clever man!” or “I don’t care, just as long as I’m getting paid”. While Chais’s attorney said that he lost “virtually everything” to Madoff, the SEC claim that the whole thing was profitable for him. Chais’s clients include Eric Roth, who wrote films like Ali, Forrest Gump and, er, The Postman. Did someone say “karma”?

Give it some time, but we can expect criminal proceedings to be brought against some of these folks at some point. The feds are currently leaning on Frank DiPascali, Madoff’s “ninja” deputy, to extract names and information about the operation, before swinging in and rounding everyone up. Piecing together the evidence is turning into a massive ballache, what with some of the records needing to be digitised from microfilm. Madoff’s propensity for filing non-electronic records can’t be helping either.

Meanwhile the Madoff sentencing season is beginning in earnest – check this pretty-hard-to-stomach interview by Fox News with Claudine de la Villehuchet, widow of Rene, who killed himself after realising he’d lost millions of dollars of others people’s money by investing it with Madoff. She describes Madoff as a “psychopath” and a “murderer”. Those who enjoy nauseating invasions of people’s emotional privacy by interviewers acting like cut-price psychotherapists will find much to like.

Posted by Ben Beaumont-Thomas in Hot Money | June 23, 2009 11:15AM |