Friends of Ours

Patriarca Underboss Gennaro Angiulo Is Dead

Gennaro "Jerry" Angiulo, the former Patriarca crime family underboss who ran Boston for 20 years until he got busted by the feds in the 1980s, died today at the age of 90 as reported by Shelley Murphy for The Boston Globe:

Angiulo and his three brothers, Donato, Francesco, and Michele were all convicted in February 1986 in the region's first sweeping federal racketeering case against the mob. He was sentenced to 45 years in prison in the case. The son of Italian immigrants who ran a North End grocery store, Gennaro Angiulo rose through the Mafia ranks under Raymond L.S. Patriarca of Providence because of his keen skill at making money. The Angiulo brothers were disciplined hands-on operators, who had a virtual monopoly on the region's illegal gambling and loansharking, according to law enforcement officials. But the Angiulo empire was toppled when the FBI planted bugs in their Prince Street headquarters and at a social club on North Margin Street for three months in 1981, as Angiulo ordered murders and beatings and boasted of his misdeeds. When he was hauled by FBI agents out of Francesco's Restaurant in the North End in 1983, he yelled, "I'll be back before my pork chops get cold." But he was wrong. He wasn't released on parole until 2007. In recent years, he has been living quietly at his home in Nahant.

Earlier this month Laurel J. Sweet reported for the Boston Herald that Angiulo was near death in a hospital in Lynn after suffering kidney failure.  Donato died last May at the age of 86, and Francesco, 88, reportedly still lives at the family's former North End headquarters at 98 Prince St. 

Robert M. Jaffe, the broker who steered many wealthy Boston and Palm Beach investors to Bernard Madoff's investment fund through both New York-based Cohmad Securities Corp., partly owned by Madoff and of which Jaffe is a vice president, and Jaffe's own Palm Beach-based M/A/S Capital Corp., previously did business with Gennaro Angiulo and his brothers:

Jaffe, under investigation for his ties to the Wall Street investor who authorities say confessed to running a Ponzi scheme, was the stockbroker to Angiulo and his brothers, reputed members of the Boston Mafia, before they were sent to jail on racketeering charges in 1986. He first represented the Angiulos when he worked at the investment firm E.F. Hutton in the 1970s, and the Angiulos followed him when he became the Boston branch manager at Cowen & Co. in 1980, according to a Boston Globe article in 1985 that quoted Cowen's lawyer, Lawrence Leibowitz.

Jaffe's brokerage relationship with the Angiulos first came to light "in an inquiry by federal securities regulators into whether Cowen failed to report large deposits the Angiulos made into their brokerage accounts there" that "was part of a broader federal investigation of alleged money laundering by the Angiulos"; however, "neither Jaffe nor Cowen was ever implicated, and the Securities and Exchange Commission inquiry appears to have ended quietly."

Patriarca Capo Donato "Danny" Angiulo Is Dead

Patriarca crime family capo Donato "Danny" Angiulo who "was part of a powerful mob family that ruled Boston's underworld from the 1960s through the mid-1980s" is dead at 86 according to a report by Shelley Murphy from The Boston Globe:

His brother, Gennaro "Jerry'' Angiulo, was the underboss of the Patriarca crime family until an FBI bug planted in his North End headquarters in 1981 captured conversations about murder, extortion, illegal gambling, and loansharking that led to Boston's first sensational Mafia trial and the end of the Angiulos' reign. In 1986, a federal jury convicted Donato Angiulo and his brothers, Gennaro and Francesco, who was the mob's accountant, of racketeering charges, and a third brother, Michele, of illegal gambling. * * * Donato Angiulo's nickname was "Smiley," but prosecutors alleged during his trial that he had a fierce reputation on the street and served as a capo regime, running a crew of Mafia soldiers. He was sentenced to 20 years in prison for racketeering, gambling and loansharking. He was freed from federal prison in 1997, after serving 11 years, and returned to his Medford home.

Laurel J. Sweet from the Boston Herald reports on the surviving brothers:  "Gennaro Angiulo, 90, was paroled in 2007 after serving 21 years of a 45-year sentence for racketeering. Brother Francesco Angiulo, 88, still lives at the family’s former North End headquarters at 98 Prince St."

Robert M. Jaffe, the broker who steered many wealthy Boston and Palm Beach investors to Bernard Madoff's investment fund through both New York-based Cohmad Securities Corp., partly owned by Madoff and of which Jaffe is a vice president, and Jaffe's own Palm Beach-based M/A/S Capital Corp., previously did business with Gennaro Angiulo and his brothers:

Jaffe, under investigation for his ties to the Wall Street investor who authorities say confessed to running a Ponzi scheme, was the stockbroker to Angiulo and his brothers, reputed members of the Boston Mafia, before they were sent to jail on racketeering charges in 1986. He first represented the Angiulos when he worked at the investment firm E.F. Hutton in the 1970s, and the Angiulos followed him when he became the Boston branch manager at Cowen & Co. in 1980, according to a Boston Globe article in 1985 that quoted Cowen's lawyer, Lawrence Leibowitz.

Jaffe's brokerage relationship with the Angiulos first came to light "in an inquiry by federal securities regulators into whether Cowen failed to report large deposits the Angiulos made into their brokerage accounts there" that "was part of a broader federal investigation of alleged money laundering by the Angiulos"; however, "neither Jaffe nor Cowen was ever implicated, and the Securities and Exchange Commission inquiry appears to have ended quietly."

Palm Beach Writer Fears For His Life

Lawrence Leamer, the Palm Beach, FL winter resident who wrote the bestselling Madness Under the Royal Palms which provides an unflattering portrayal of those who inhabit the exclusive community, fears for his safety:

His tell-all book has ruffled feathers, as has his chronicling of the Bernie Madoff scandal in magazines and the web.  A perfect storm of hot topics that has offended many. He says at Ball the other night, the Palm Beach Police Chief took him aside and said: "Your life may be in danger..you had better get security." "I thought he was joking", says Leamer. "He wasn't joking"

Robert M. Jaffe, the broker who steered many wealthy Boston and Palm Beach investors to Bernard Madoff's investment fund through both New York-based Cohmad Securities Corp., partly owned by Madoff and of which Jaffe is a vice president, and Jaffe's own Palm Beach-based M/A/S Capital Corp., previously "did business with another notorious rogue: former Boston mob leader Gennaro Angiulo":

Jaffe, under investigation for his ties to the Wall Street investor who authorities say confessed to running a Ponzi scheme, was the stockbroker to Angiulo and his brothers, reputed members of the Boston Mafia, before they were sent to jail on racketeering charges in 1986. He first represented the Angiulos when he worked at the investment firm E.F. Hutton in the 1970s, and the Angiulos followed him when he became the Boston branch manager at Cowen & Co. in 1980, according to a Boston Globe article in 1985 that quoted Cowen's lawyer, Lawrence Leibowitz.

Jaffe's brokerage relationship with the Angiulos first came to light "in an inquiry by federal securities regulators into whether Cowen failed to report large deposits the Angiulos made into their brokerage accounts there" that "was part of a broader federal investigation of alleged money laundering by the Angiulos"; however, "neither Jaffe nor Cowen was ever implicated, and the Securities and Exchange Commission inquiry appears to have ended quietly."

In Boston magazine Leamer writes that the socialites are not being kind to Jaffe whom some believe was a mere interloper through his 1968 marriage to the daughter of textile magnate Carl Shapiro:

Robert Jaffe's not even getting the benefit of the doubt. It's with acid in their voices that his Palm Beach peers remind you how the former Louis Boston salesman married into his status. "He was looking for a rich wife, and Ellen was the best he could do," says a woman whose father was involved with Boston's Jewish mob. After the couple married in 1968, she relays, Jaffe "went strutting down Newbury Street, showing off that he was in the chips."

Among those who invested with Madoff is Mel Weiss from the plaintiff class action law firm Milberg Weiss Bershad & Schulman LLP who had four accounts with the funds.  Weiss was convicted last year with several of his law partners for their roles in a racketeering conspiracy allegedly spanning decades in which serial plaintiffs were illegally paid to file shareholder class action suits against corporations.  The firm also was indicted but managed to escape prosecution after it -- now simply known as Milberg LLP -- agreed to pay a $75 million fine and employ a compliance monitor.

It's ironic that a former name partner of Milberg was a presumably defrauded investor in the Madoff funds because the class action firm now is representing a group of those investors:

Bernard Madoff is said to have ruined many a fortune. But for one law firm, history’s largest alleged Ponzi scheme is opening the door for a comeback. The law firm formerly known as Milberg Weiss—considered the go-to firm for shareholder class-action suits until a 2006 kickback scandal landed several of its name partners in prison—is once again in demand. The firm, now called simply Milberg LLP, has signed up more than 100 Madoff victims, the biggest group assembled by any one firm to date. All told, these clients face estimated losses of $1.5 billion to $2 billion. In addition to representing a potential windfall in fees, the cases could help restore the firm's reputation.

Milberg has teamed up with law firm Seeger Weiss -- where Mel's son Stephen Weiss is a name partner -- on the cases.  No word on whether Mel Weiss from his prison cell now is a client of his former firm and Seeger Weiss.

Speaking on the intregity of the remaining partners at Milberg, Ariana Tadler said:  "The lawyers that stayed were not implicated or involved in the indictment, and we are going to work just as aggressively as we always have to do the best for our clients."

Although Milberg LLP claims that none of its remaining partners participated in the illegal conduct the question still begged is whether some of them were aware of the scheme and what, if any, steps they took to address the problem.  After all, what did they think was happening when the same individuals repeatedly were serving as plaintiffs in dozens of lawsuits?  Indeed, in 1995, Congress enacted the Private Securities Litigation Reform Act specifically for the purpose of curbing the abuses for which Milberg Weiss and its partners were indicted, and surely this legislation raised a red flag even among the innocents at the firm.

Frankly, the apparent failure of Ariana Tadler and other current partners at Milberg to uncover the racketeering crimes of Mel Weiss that allegedly occured for decades at the law firm right under their noses hardly instills confidence in their ability now to represent effectively those burned by Madoff.

Whistle Blower Against Bernie Madoff Feared for His Safety

Harry Markopolos, the securities industry executive and fraud investigator who attempted to warn the S.E.C. for years that Bernard Madoff was involved in a Ponzi scheme, "did not initially disclose his own identity to regulators because he feared for his life, according to testimony he has apparently prepared for a Congressional hearing Wednesday morning":

Markopolos, will testify that Mr. Madoff "was one of the most powerful men on Wall Street and in a position to easily end our careers or worse," and that his fund "posed great danger" to those who investigated it, based on a version of his remarks that emerged Tuesday evening. * * * He and his colleagues avoided taking their allegations to the industry self-regulatory agency, now called Finra, he said in the statement, because he believed Mr. Madoff and his brother, Peter B. Madoff, wielded too much power with that organization. Peter Madoff worked in his brother's firm but has not been implicated in the apparent fraud. "We were concerned that we would have tipped off the target too directly and exposed ourselves to great harm," he wrote.

Among the predictions -- "events that have a reasonable chance of occurring despite the general perception that the odds are very long" -- by Doug Kass for 2009 is that investigators will reveal that Bernie Madoff was involved in more than a ponzi scheme but further was laundering money for the Russian Mafia and Colombian drug cartels:

The Russian mafia and Russian oligarchs are found to be large investors with Madoff. During the next few weeks, a well-known CNBC investigative reporter documents that the Russian oligarchs, certain members of the Russian mafia and several Colombian drug cartel families have invested and laundered more than $2 billion in Madoff's strategy through offshore master feeders and through several fund of funds. There are several unsuccessful attempts made on Madoff and/or his family's lives. With the large Russian investments in Madoff having gone sour and in light of the subsequent acts of violence against his family, U.S./Russian relations, which already were at a low point, are threatened. Madoff's lawyers disclose that he has cancer, and his trial is delayed indefinitely as he undergoes chemotherapy.

Robert M. Jaffe, the broker who steered many wealthy investors to Bernard Madoff's investment fund through both New York-based Cohmad Securities Corp., partly owned by Madoff and of which Jaffe is a vice president, and Jaffe's own Palm Beach-based M/A/S Capital Corp., previously "did business with another notorious rogue: former Boston mob leader Gennaro Angiulo":

Jaffe, under investigation for his ties to the Wall Street investor who authorities say confessed to running a Ponzi scheme, was the stockbroker to Angiulo and his brothers, reputed members of the Boston Mafia, before they were sent to jail on racketeering charges in 1986. He first represented the Angiulos when he worked at the investment firm E.F. Hutton in the 1970s, and the Angiulos followed him when he became the Boston branch manager at Cowen & Co. in 1980, according to a Boston Globe article in 1985 that quoted Cowen's lawyer, Lawrence Leibowitz.

Jaffe's brokerage relationship with the Angiulos first came to light "in an inquiry by federal securities regulators into whether Cowen failed to report large deposits the Angiulos made into their brokerage accounts there" that "was part of a broader federal investigation of alleged money laundering by the Angiulos"; however, "neither Jaffe nor Cowen was ever implicated, and the Securities and Exchange Commission inquiry appears to have ended quietly."

UPDATE:  At the House hearings this morning a committee member referred to Markopolos' "paranoia" about his safety, and Markopolos responded:

I don't consider it paranoia. And the reason is, Mr. Madoff was running such a large scheme of unimaginable size and complexity, and he had a lot of dirty money. And let me describe dirty money to you. When you're that big and you're that secrective, you're going to attract a lot of organized crime money, and which we now know came from the Russian mob and the Latin American drug cartel, and when you are zeroing out mobsters, you have a lot to fear. And he could not afford to get caught, because once he was caught. And if he would've known my name and knew he had a team tracking him, I didn't think I was long for this world.

UPDATE:  In concluding his testimony Markopolos further addressed the investments of organized crime in the Madoff funds in an exchange with Rep. Gary Ackerman:

ACKERMAN: I'm talking about, when you talk about the Russian mob and organized crime, these are people who invested through European investors or European feeder funds?

MARKOPOLOS: Correct. And I didn't fear of them, and I didn't think they were going to come after me, I want to make this perfectly clear to all those Russian mobsters and Latin American drug cartels out there...

ACKERMAN: You're talking directly to them.

MARKOPOLOS: I was acting on your behalf trying to stop him from zeroing out your accounts. I'm the good guy here. Just like to make that clear.

ACKERMAN: Uh, yeah I think we registered that.

The more extensive exchange between Ackerman and Markopolos on the subject is contained in the video:

Milberg's Monopoly: Restoring Honesty and Competition to the Plaintiffs' Bar

James McDonald, a law student at Duke University, has authored a proposal in the wake of the convictions against several name partners from the notorious New York law firm of Milberg Weiss Bershad & Schulman LLP for their roles in a racketeering conspiracy allegedly spanning decades in which serial plaintiffs were illegaly paid to file shareholder class action suits against corporations.  McDonald's piece appears in the Duke Law Journal, and the abstract states:

When the renowned plaintiffs' firm Milberg Weiss was indicted in 2006 for paying kickbacks to clients, most commentators saw the scandal as the product of five dishonest lawyers. This Note argues that the causes were more complex than the moral shortcomings of a few attorneys; rather, the kickbacks were but one symptom of a deeply flawed system for selecting lead counsel in securities class action lawsuits. Although the Private Securities Litigation Reform Act of 1995 attempted to curb abusive behavior by the plaintiffs' bar, its focus on reforming plaintiff behavior meant that attorneys were left relatively free to continue using whichever tactic served their financial ends. Using Milberg Weiss's behavior to guide analysis, this Note assesses the problems of lead-counsel selection. These problems trace to a common source: an imbalance of information between attorneys vying for appointment as lead counsel and the judge who must select one of these attorneys. To correct this problem, this Note proposes implementing screening and signaling procedures to determine the "most adequate counsel" who can provide quality representation for every member of a class.

In the article McDonald concludes that "some of the tactics that Milberg Weiss used to reach the top of the plaintiffs' bar were as fraudulent and unethical as any action taken at Enron, WorldCom, or Tyco."  Read Milberg's Monopoly:  Restoring Honesty and Competition to the Plaintiffs' Bar

The law firm itself -- which now simply goes by the moniker Milberg LLP in light of the felony convictions of its prior named partners -- was called the "meanest law firm" in America by Fortune magazine, and settled the federal racketeering indictment against it by agreeing to pay a fine of $75 million and hire a compliance monitor.  Although Milberg LLP claims that none of its remaining partners participated in the illegal conduct the question still begged is whether some of them were aware of the scheme and what, if any, steps they took to address the problem.  After all, what did they think was happening when the same individuals repeatedly were serving as plaintiffs in dozens of lawsuits?  Indeed, in 1995, Congress enacted the Private Securities Litigation Reform Act specifically for the purpose of curbing the abuses for which Milberg Weiss and its partners were indicted, and surely this legislation raised a red flag even among the innocents at the firm.

Two of the defendants convicted in the illegal kickback scheme reported to prison this week:

[F]ormer partner Steven Schulman and Howard J. Vogel, a former lead plaintiff represented by the New York firm, are scheduled to report to federal prison this week. * * * Schulman, who pleaded guilty to a federal racketeering charge, was sentenced to six months in prison. He is scheduled to begin serving his sentence on Tuesday, according to court documents. Vogel, who served as a plaintiff in 40 of the firm's cases, is scheduled to begin serving three months in prison on Wednesday. David Bershad, another former partner, recently began serving six months in prison. Last year, former partner William Lerach and Melvyn Weiss, co-founding partner of Milberg, began serving separate sentences of 24 months and 30 months, respectively. Another defendant, Steven G. Cooperman, who served as a lead plaintiff for Milberg, recently began serving a sentence of four months. A former lawyer who served as an intermediary in the scheme, Richard Purtich, who was sentenced to two months in prison, was released on Nov. 20. A former Milberg expert, John B. Torkelsen, was sentenced to 18 months after pleading guilty to lying to a federal judge. He previously was serving a prison sentence in a separate case. Two other defendants, former Milberg plaintiff Seymour Lazar, and his former lawyer, Paul Selzer, did not receive prison sentences as part of their plea deals with the government.

After the indictment of Milberg Weiss political hacks from the Democratic Party -- including Rep. Charles Rangel, Rep. Carolyn McCarthy, Rep. Gary Ackerman & Rep. Robert Wexler -- initiated an ultimately unsuccessful public campaign to derail the prosecution.  Two of these Congressmen, Messrs. Rangel and Wexler, now are facing allegations of wrongdoing on a host of issues.

In order to fully appreciate the sleaze factor among some of the partners at Milberg Weiss Bershad & Schulman LLP -- in case federal racketeering charges which resulted in jail for many does not adequately do the job -- it's worth taking a look also at a contemporaneous case against former partner Paul D. Young who was sued by New York City for criminal nuisance involving the operation of a gay S&M sex club out of the basement of his home.  The sex club, El Mirage, is tied to a larger gay sex club enterprise further including the East Side Club at 227 East 56th Street and the West Side Club at 27 West 20th Street.  Gay businessman Robert N. DeBenedictis appears to have some interest in all three of these gay sex clubs -- as well as several gay bars, restaurants and other businesses serving the gay community -- and also is a defendant in a class action consumer fraud lawsuit for his alleged role in the company which sells the hair loss remedy Avacor.  Read Class Action Complaint Against Avacor  

Milberg LLP is attempting to stage a comeback by representing some of the investors allegedly defrauded by Bernie Madoff:

Now called simply Milberg LLP, the firm has garnered over 100 Madoff investors—the largest group assembled by any firm to date. All told, Milberg's clients face Madoff-related losses of more than $1.5 billion to $2 billion of lost assets. Milberg partner Brad Friedman says the group could swell to 150 investors in the next couple of weeks, as many of the new clients refer the firm to other Madoff victims. "All frauds are bad," explained Mr. Friedman. "But this one is so much worse because so many of the victims invested nearly 100% of their liquid assets (with Madoff), and now they are completely wiped out."

For the sake of burnt investors let's hope that Milberg LLP is better at uncovering fraud against Madoff than it was in policing the fraud that occurred right under its nose.