Middlemen Lose Billions in Madoff Fraud
Hedge funds that sold access to Ponzi scheme face collapse
By Jason Farago,  Newser Staff
Posted Dec 17, 2008 8:41 AM CST
Investors inquiring about their money and others gather in the lobby of the building where Bernard L. Madoff Investment Securities LLC, have their offices, Friday, Dec. 12, 2008, in New York.   (AP Photo/Diane Bondareff)
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(Newser) – Last week Walter Noel was a successful hedge fund manager, with houses from Connecticut to the Caribbean and an adulatory photo shoot in Vanity Fair. But overnight, when Bernie Madoff's giant Ponzi scheme was exposed, his $14.1 billion firm, Fairfield Greenwich Group, lost more than half its assets. While the hedge fund capital of Greenwich has expressed sympathy for Noel, Madoff's biggest known loser—others question his firm's failure to perform due diligence on Madoff's suspiciously steady returns.

Fairfield charged a fee to clients for providing access to Madoff's investment vehicles, as did many other middlemen who collected millions. With his most lucrative business gone, Noel, who has business and law degrees from Harvard and employs his four sons-in-law in the firm, may now be forced to close shop, writes the New York Times. Much of his family's wealth is gone, too.