Madoff Investor’s Suicide Leaves Questions

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Madoff Investor’s Suicide Leaves Questions

By ALEX BERENSON and MATTHEW SALTMARSH
Published: January 1, 2009
In the days after Bernard L. Madoff was arrested and accused of orchestrating a $50 billion Ponzi scheme, one of his investors — Rene-Thierry Magon de la Villehuchet — struggled with his role in the fraud.


Mr. de la Villehuchet, a French aristocrat and professional investor who lived in the New York suburbs, had put at least $1.4 billion of his and his clients’ money with Mr. Madoff. He had lost his entire savings. He was overwhelmed and depressed, according to people who had spoken to him.

Worse, he felt personally responsible for the money his investors had lost, his brother Bertrand said in a phone interview in Paris this week.

“He had a true concept of capitalism,” Bertrand de la Villehuchet, 74, said of his brother. “He felt responsible and he felt guilty. Today, in the financial world, there is no responsibility; no one wants to shoulder the blame.”

But Rene-Thierry de la Villehuchet did.

On the night of Dec. 22, Mr. de la Villehuchet, 65, locked the doors to his office on the 22nd floor of a Midtown Manhattan office building. Then he swallowed a dose of sleeping pills and slashed open his left arm with a box cutter. The police found him dead the next morning.

Suicide is the most intimate of acts, and no one can know exactly what Mr. de la Villehuchet was thinking as he decided to take his own life. But the fraud weighed heavily on him. “It’s a complete nightmare,” he told a longtime client in Paris, less than a day before he died, according to the client.

In a note to his brother written shortly before his death, Mr. de la Villehuchet said that he needed to be held accountable for the losses, his brother said. “If you ruin your friends, your clients, you have to face the consequences,” Bertrand said, explaining what his brother believed.

Mr. de la Villehuchet’s attitude appears to be rare. So far, the leading players in Mr. Madoff’s case have maintained a stony silence, studiously avoiding apologies or statements of responsibility.

Mr. Madoff’s sons have said nothing about how they could have worked at their father’s firm for decades without noticing that the money he supposedly managed did not exist. The accountants and regulators who were supposed to protect investors have not explained their failure to do so. And the hedge funds that invested tens of billions of dollars with Mr. Madoff despite obvious red flags have said the fraud was his fault, not theirs.

Some 10 days after Mr. de la Villehuchet’s death, crucial questions about him, his firm — Access International Advisors — and his relationship with Mr. Madoff remain unanswered.

Mr. de la Villehuchet and Patrick Littaye, another French banker, founded Access International Advisors in May 1995, a year after Mr. de la Villehuchet stepped down as the head of the American brokerage arm of Crédit Lyonnais, a French bank. From its inception, Access International’s headquarters were in Suite 2206 of 509 Madison Avenue, the same office where Mr. Villehuchet killed himself.

But Access International had strong ties to Europe. Mr. Littaye worked out of offices in Paris and Brussels, and most of Access’s investments seem to have been funneled though subsidiaries in Luxembourg, according to Luxembourg corporate records. A vice president at Access, Guy de La Tour du Pin Verclause, is the scion of a wealthy French family that can trace its lineage back centuries.

Even Access’s Web site was registered through a French Internet provider. Banque DeGroof Luxembourg, a subsidiary of the largest private bank in Belgium, also owned a stake in Access, according to the records.

Jean-Michael Gelhay, a Banque DeGroof manager who is listed on Luxembourg incorporation records as having participated in the fund, said he knew Mr. Littaye but denied involvement with Access and would make no other comment.

The clients of Access International were mainly wealthy Europeans, according to Bertrand de la Villehuchet. Those clients included Philippe Junot, the former husband of Princess Caroline of Monaco, and Liliane Bettencourt, daughter of the founder of the French cosmetics giant L’Oréal.

In the interview, Bertrand de la Villehuchet said that Mr. Littaye had connected Mr. Madoff to his brother several years ago. Bertrand said that Rene-Thierry had not known Mr. Madoff personally.

Mr. Littaye, who has offices in Paris and Brussels according to French corporate records, did not return calls and e-mail messages seeking comment.
Marketing materials for one of the “feeder funds” advised by Access International that provided money to Mr. Madoff say that the fund began in November 2003, but show “audited net returns” dating back to 1998.

The fund, called the Leveraged Options Arbitrage Fund, had $500 million in assets, according to the materials, and charged investors a management fee of 1 percent of assets annually and 15 percent of any profits the fund generated.

A second feeder fund, called LuxAlpha Sicav, had $1.4 billion in assets. It charged a 5 percent upfront fee, a management fee of 0.8 percent annually and a 16 percent performance fee. It is not clear if, or how, the two funds were related.

In a letter to clients after Mr. Madoff confessed to the fraud, Access said it had lost $1.4 billion, referring to the LuxAlpha fund. It did not mention the second fund. An employee at Access said no one at the company could comment on the firm’s business and hung up.

UBS, the giant Swiss bank, provided back-office services for the LuxAlpha fund until 2008, when Access International took over.

Tatiana Togni, a spokeswoman for UBS in Zurich, would say only that Bernard Madoff’s collective investment vehicles were not on the bank’s recommended list “as direct investment options.”

As Access grew over the last decade and Mr. de la Villehuchet’s wealth increased, he devoted increasing amounts of time and money to restoring his family’s chateau in Brittany. The chateau had lost its luster after decades of neglect, and Mr. de la Villehuchet delighted in its restoration, according to Guy Gurney, a friend and sailing partner.

Jean-Claude Havard, the mayor of Plouër-sur-Rance, where the chateau is located, said Mr. de la Villehuchet had been restoring the building for the last 20 years since inheriting it from his uncle. That work, including organizing the archives, was almost finished, he added.

He traveled to Europe several times a year, dividing his time among client visits, family dinners, sailing and the chateau, which was near the port of St. Malo on the rugged Brittany coast. As a child, Mr. de la Villehuchet dreamed of joining the French Navy, but bad eyesight prevented him from doing so, Bertrand said.

Instead, he became a keen amateur sailor, winning several regattas in the Shield and Star classes, both small boats with two-person crews. He was a member of the New York Yacht Club and the Larchmont Yacht Club, as well as the St. Malo Bay Nautical Club in France. His primary residence was in New Rochelle, N.Y., where he lived with Claudine, his wife, who has declined to comment. The couple had no children.

Now Mr. de la Villehuchet will return to the sea one final time. Bertrand de la Villehuchet said he plans to scatter his brother’s ashes off the coast of Brittany in January.