Aurelia Finance

Aurelia Finance SA was a private bank and fund-management company in Geneva, Switzerland that was set up as a feeder fund to Bernie Madoff's illegal Ponzi scheme.[1][2]

Aurelia Finance
Typeprivate bank and fund-management company
Headquarters
Geneva
,
Switzerland
Servicesfeeder fund to Bernie Madoff

Aurelia managed 1.7 billion Swiss francs of clients’ money, and advised clients to invest in the Hermes World Fund, a Madoff feeder fund which was listed in Dublin in January 2004, as part of a “conservative” portfolio.[1][3]

Madoff

It placed assets of its 800 million Swiss francs ($758 million) Hermes World Fund in investments with Bernard Madoff.[1][4]

Irving Picard, the trustee charged with recovering money for Madoff fraud victims, alleged that in September 2008 when a JPMorgan Structured Investments Distribution Marketing division employee disclosed JPMorgan plans to redeem its money, he was threatened by employees of Aurelia Finance.[5][6] Picard asserted in a complaint: "The Aurelia Finance representatives repeatedly opposed [JP Morgan's] plan. At two points in the conversation, the Aurelia Finance representatives made threats ... referring to 'Colombian friends' who could 'cause havoc' and telling [the JPMorgan employee] 'we know where to find you’.”[5] JPMorgan reported the threats to the UK’s Serious Organised Crime Agency in October 2008 by filing a Suspicious Activity Report, concerned that “Colombian drug money” was involved in the Madoff firm.[5][7][8]

Aurelia lost an estimated $800 million of clients' money by investing in Bernard Madoff's $65 billion Ponzi scheme, uncovered in December 2008.[2][9]

Post-Madoff

In April 2009, all five directors of Aurelia's board were charged by a Geneva magistrate with criminal mismanagement of client assets, and with enriching themselves on management fees, finder fees, and commissions paid for fictitious returns that were never verified.[2] [10] They all then resigned from the board.[2][11] Cattaneo and Stepczynski retained executive roles at the bank, however.[2] The company had one sole director as of 4 June 2009, Gerhard Auer.[2]

In November 2009, prosecutors leveled money laundering charges at Stepczynski after the bank he tried to use to transfer millions of francs out of Switzerland informed the authorities.[2] A Geneva examining magistrate then froze the assets of all five former Aurelia directors.[2]

On September 4, 2015 the criminal complaints against the five directors were settled in Geneva.[12]

See also

References
  1. Mulier, Thomas (30 December 2008). "Aurelia Finance Invested Client Money in Madoff, Le Temps Says". Bloomberg. Retrieved 21 February 2013.
  2. de Sa'Pinto, Martin (12 November 2009). "Aurelia man charged with money laundering-sources". Reuters. Retrieved 21 February 2013.
  3. de Sa'Pinto, Martin (23 April 2009). "Swiss Madoff investors await Aurelia ruling". Reuters. Retrieved 21 February 2013.
  4. de Sa'Pinto, Martin (12 March 2009). "UBP to partially reimburse Madoff victims". Reuters. Retrieved 21 February 2013.
  5. Murphy, Megan (3 February 2011). "JPMorgan under fire over Madoff role". FT. Retrieved 21 February 2013.
  6. Courtney Comstock (15 April 2011). "JPMorgan Did A Cost-Benefit to See If It Was Worth Keeping a Ponzi Scheme As a Client". Cnbc. Archived from the original on 7 April 2013. Retrieved 21 February 2013.
  7. Schecter, Anna (2 December 2010). "JP Morgan Suspected Madoff Months Prior to Arrest". ABC News. Retrieved 21 February 2013.
  8. "Madoff trustee: JP Morgan execs were warned". usatoday.com. 4 February 2011. Retrieved 21 February 2013.
  9. "Swiss judge allows charges in Madoff losses case". Reuters. 24 April 2009. Retrieved 21 February 2013.
  10. Bloomberg Markets. Retrieved 21 February 2013.
  11. Giles, Warren (7 May 2009). "Rothschild Difference With Madoff Becomes Geneva's Obsession". Bloomberg. Retrieved 21 February 2013.
  12. "Geneva wealth managers pay defrauded investors to settle Madoff case". Reuters. 4 September 2015. Retrieved 22 December 2016.
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