Kohn and Raven cleared by former ‘Rottweiler’ Popplewell

 …and stepmum makes three

So then, all those close associates of record-breaking fraudster Madoff in the UK were innocent, and knew nothing about Bernie’s burgling bonanza? So ruled High Court Judge Mr Justice Popplewell yesterday. And in case anyone might be in doubt about his clarity on the matter, Popplewell declared, “Madoff’s fraud itself blighted [the defendants’] lives and tainted their good names simply by association. To this was added the burden of this unfounded claim, making serious allegations of dishonesty, which threatened financial ruin and personal humiliation.”

‘Good names’. An interesting observation. The prime target of liquidators trying to get at least a little of the investors’ money back was Sonja Kohn. Mrs Kohn has many friends in lots of high places, being for example a personal friend of Heinz Fischer, the President of Austria. She founded and was the 75% owner of Medici Bank, which invested heavily in the Madoff scam on behalf of investors. From this, Medici made kickbacks totalling $62 million. At the time, Sonja Kohn was Head of the bank’s supervisory board. She was therefore in pole position to be performing due diligence on the investment suppliers she recommended to her clients. After the fraud came to light, Medici decided on March 19, 2009 to wind down all banking business, and to relinquish its banking license. Clearly, somebody in the bank thought it was guilty of something.

Kohn’s sole defence was that she didn’t know anything, and wasn’t a confidante of Bernie Madoff. Ergo sum, either she was guilty of gross negligence and stupidity, or she lied.

Most observers, on hearing the claim that she never knew Madoff that well, thought she was lying. Madoff and Kohn began being very close around 1985, they aver, when she worked in New York as a stockbroker at Merrill Lynch. They seemed to many people at the time “like soulmates”.

When the fraud began to unravel, Madoff tried to destroy evidence of their relationship. Equally, Kohn too didn’t behave like an innocent bystander: she began making withdrawals from the fund – including one for a staggering $423 million transfer one month before Madoff’s arrest. If she didn’t suspect Bernie, why take money back off his fund?

That she was complicit in the scam was not, however, the only charge levelled against Mrs Kohn. One category of disputed sums was the $14m-worth of loans made by the Madoff’s parent company that the liquidators allege were unnecessary. The claimants alleged that this was a simple money laundering operation. The liquidators also claimed that further sums, paid out between 1992 and 2007, recorded as payments ‘for research’, were in fact fees paid by Bernie Madoff to Mrs Kohn to sign up European clients. In short, Kohn may not have known about the Ponzi (they alleged) but she was a party to other crimes as well.

Justice Popplewell said there was no evidence to back up these claims. He also cleared Madoff’s UK CEO Stephen Raven, one of the founders of the London International Financial Futures and Options Exchange. Raven – who also befriended Madoff in the1980s – claimed he had “taken the role [of CEO] more as a favour to a friend than with any idea of career advancement”. The liquidators claimed that irregular payments were made to the UK offshoot headed by Mr Raven. These included €10.6m to purchase Bernie Madoff’s yacht, the 27-metre Arno Leopard Bull (as well as $1.1m of maintenance and fit-out costs for the vessel) and £360,000 spent on an Aston Martin for Bernie Madoff’s brother, Peter.

If Stephen Raven ran the company because Madoff was ‘a friend’, he couldn’t adopt the Kohn line of “I hardly knew the bloke”. And if he didn’t know about any of the above payments – pretty damn big ones, let’s face it – he was at least guilty of negligence. Peter Madoff, testifying by video link from a US prison where he is serving 10 years for conspiracy and falsifying records, refused to answer any questions about them.

Justice Andrew Popplewell was a prominent QC in his time, earning a reputation as “a rottweiler of a lawyer” according to one senior professional. He successfully defended Chelsea owner Roman Abramovich against Boris Berezovsky’s accusations, for which Popplewell’s chambers Brick Court were alleged to have received £40m in fees. “There’s definitely a premium to pay for Russian work,” one litigation partner asserts. “The oligarchs only want the best silks practising at the bar and they’re prepared to pay for it. At the moment some sets are asking clients to pay a lump sum and that’s being divided between the counsel team.”

Popplewell told the Court that Abramovich had not in any way intimidated Berezovsky, telling the Judge there was “no evidence” to support it and that Abramovich was “no bully”. The Russian Oligarch has fired six managers during his eight-year reign at Chelsea FC.

High Court documents show that Popplewell personally received £469,000 for defending Abramovich; but his client’s opponent Boris Berezovsky was unhappy that Popplewell was on the case at all. For he is the stepson of the Judge, Dame Elizabeth Gloster. Both Judges and silks are required to bar themselves from appearing in any case where family connection is involved.

Andrew Popplewell is the stepson of a judge, his father was a judge, and his brother is also a prominent QC. He joined Brick Court where his father is still a Door Tenant. He made a lot of money working for very rich and powerful people. His good name earned him a knighthood in 2011. He very probably therefore deserves to qualify as a sound judge of the worth of a good family, a good fee, a good thing to keep quiet about, and a good name.

Last night at The Slog: Spazz Kalerticka tumf repairass Konfuzione