Gstaad

When Thierry Magon de la Villehuchet committed suicide just before Christmas, I hoped against hope that others would do the same. No such luck. Villehuchet was an aristocrat, a gentleman and an honest man. He felt responsible for the loss of $1.4 billion and he took the honourable way out. I did not know Villehuchet but people who did have spoken very highly of him. The rest of Madoff’s gang I do know, and they are as likely to do the honourable thing as I am to emigrate to Israel.

Most of these friends of Madoff own chalets in Gstaad, or visit regularly. I have warned personnel at the Gstaad Palace, the Yacht Club and the Eagle Club that if I come across any of them there will be fisticuffs. Not that any of them would fight. People like that rarely do. The reason I’m so angry is that so many good people have been ruined by the greed of a few ‘feeder’ fund managers and so-called bankers. I will start with one Michael de Picciotto. His uncle, Edgar de Picciotto, is the founder and chairman of Union Bancaire Privée, a Geneva-based bank that invested client money with Madoff. The Picciottos are Syrian–Lebanese Jews who have become extremely rich these past 20 years. Somewhere along the way they picked up the aristocratic ‘de’, that being the only similarity any Picciotto has had with anything resembling aristocracy. The younger Picciotto invested $700 million with Madoff. Didn’t the amazing return on Madoff’s fund ring any alarm bells in Picciotto’s head? What needs to be done now is for the UBP to cough up the moolah to the clients it took down the Swanee. The bank has the money — at the last count the UBP had 125 billion greenbacks under management — but parting with it is a different story altogether. Angry investors are now seeking to recover a portion of their funds, but what I’d like to know is why only a portion. The Picciottos are now deeply involved in damage control. They have myriad lawyers and PR flacks, and as I write I hear that Edgar Picciotto is planning to come up to Gstaad. Although he is old and very ugly, a punch in the face would do him a world of good.

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My friend Charles Fix, who lives two or three chalets down from me, lost 600 million greenbacks, most of it his own. Needless to say, he is not best pleased, and the man who got him to invest is one Andrés Piedrahita, a Colombian turned money manager and multimillionaire on the back of Bernie Madoff. The last time Piedrahita saw the mother of my children in Geneva airport he remarked how surprised he was that she was flying commercial. Now that’s what I call a gent. He is at present lying low.

Piedrahita, a short, loud man, is married to one of Walter Noel’s daughters, Noel being the top recruiter for Madoff’s fund, along with Jacob Ezra Merkin, in the Fairfield Greenwich Group, a fund of funds that also worked as a ‘feeder fund’ for Madoff. Walter Noel used his sons-in-law as recruiters, finding suckers for Madoff’s schemes. Philip Toub, a man I’ve known as long as I’ve known his brother-in-law Piedrahita, is also an old Gstaad hand. All these bums have now put up a wall of lawyers between themselves and their victims, which might be the way democracy works, but that don’t make it right, as they used to say in Brooklyn.

In fact, Madoff used Jewish charities to build up immunity from snoopers. Anyone suspected of being anti-Madoff was leaned on — heavily. There were many who steered clear of Madoff nonetheless. In 2003, the French Société Générale figured that Madoff’s numbers didn’t add up and placed him on its blacklist.

The trouble is that the US government will not go all the way while prosecuting Madoff. Uncle Sam would if there were pension funds involved, but going to bat for some rich white Europeans is not Sam’s habit. Obviously Madoff has hidden assets, perhaps in the billions, and most of his feeder fund managers have money, too. I don’t see any of them wearing striped pyjamas any time soon. Smart lawyers, the best money can buy, will defend them against underpaid government mouthpieces. The leading players so far have maintained a stony silence, making sure to avoid any kind of apology or statement of responsibility. Villehuchet’s suicide is probably seen as a dumb act by the Madoffs, Picciottos, Piedrahitas, Toubs and Noels of this world. It’s going to be an interesting Gstaad season, to say the least.

This article first appeared in the print edition of The Spectator magazine, dated