Unions and Pension Plans Hurt in Financier’s Scheme

Unions and Pension Plans Hurt in Financier’s Scheme

Published: February 5, 2009
In addition to the gossip fodder, serious pension problems and significant accounting issues are embedded in the list of customers assembled by the trustee overseeing the bankruptcy of Bernard L. Madoff’s brokerage firm.

More Names of Note Appear on Madoff List (February 6, 2009)
Times Topics: Ponzi Schemes | Bernard L. MadoffAt least a half-dozen construction unions, including locals of the International Brotherhood of Electrical Workers and the Plumbers & Steamfitters union, had entrusted pension funds and health care money to Mr. Madoff, according to the list. The roster also includes locals representing roofers, carpenters and laborers, mostly in upstate New York.

While the Madoff trustee has cautioned that the list may contain errors, several unions have already acknowledged their losses and sought help from their Congressional representatives.

A handful of public pension funds are also shown as having accounts with Mr. Madoff, although confirmation of those accounts could not be obtained Thursday evening. According to Plan Sponsor, a financial information service for institutional investors, these include the Louisiana State Police Retirement System, the New Orleans City Employees Retirement System, the Missouri State Employees Retirement System, the Fort Worth Retirement Fund and the Baltimore Police and Fire Employees pension fund.

And throughout the list are more than 100 accounts attributed to David G. Friehling, whose firm was the official auditor for the Madoff firm. His firm, Friehling & Horowitz in New City, N.Y., is shown with an additional 17 accounts.

Several critics of Mr. Madoff’s operations have said that the tiny accounting firm was a red flag, given the size of Mr. Madoff’s legitimate operations. That the accountant was also at least the agent for dozens of accounts with the firm should have raised more red flags, they said.