Britain's Serious Fraud Office yesterday launched an investigation into the UK activities of disgraced Wall Street financier Bernard Madoff.
Britain's Serious Fraud Office yesterday launched an investigation into the UK activities of disgraced Wall Street financier Bernard Madoff.
The move came as it emerged that Madoff transferred about $165m (£108m) into Britain from the US by buying new shares sold by Madoff Securities International, his London-based unit.
Madoff, accused by US authorities of running a pyramid scheme for many years in a fraud worth up to $50bn (£33bn), moved the assets via the allotment of two sets of new shares, regulatory filings allegedly reveal.
It is claimed he received 6.25 million shares of Madoff Securities International for $10 (£6.60) each in September 2007 as payment for terminating a $62.5m (£41m) loan he had made to the British firm in 2000. On October 29, it is alleged he acquired almost 50 million shares in Madoff Securities International for £1 each.
Police said the investigation of Madoff's British operations, which managed his family's personal fortune, would focus on "UK victims and any criminal offences that might have been committed in the UK".
The revelation came as the investigators searching the office desk of the man accused of one of the largest cases of financial corruption in US history found he had cheques totalling £173m (£114m) ready to be sent to family, friends and employees.
Assistant US Attorney Marc Litt made the disclosure over the 100 signed cheques in a letter to US Magistrate Judge Ronald Ellis, as part of a renewed request for the judge to jail Madoff prior to his trial.
"The only thing that prevented the defendant from executing his plan to dissipate those assets was his arrest by the FBI on December 11," prosecutors argued.
The SFO decision comes after it was handed an interim report by Grant Thornton, the accountancy firm acting as the provisional liquidators of Madoff Securities International.
The SFO said it was liaising closely with law enforcement counterparts in the US and with the City of London police.
"We will work closely with other law enforcement agencies to discover the truth behind the collapse of these huge financial structures. And we again ask for help from ex-employees and others," said Richard Alderman, the SFO director.
"The public say they want us to take early action and this is what we are doing."
It has appealed for investors or other stakeholders involved with the Madoff UK businesses to get in touch in the hope that they might shed light on the trader's dealings.
Some fraud lawyers believe the SFO has acted swiftly on information provided by Grant Thornton because they have swift arrests to make.
Madoff Securities International Ltd, based in London's Mayfair, is currently in liquidation.
Madoff was registered with the FSA, along with his two sons, brother and six other employees of Madoff Securities International, a proprietary trading operation that insists it was "not in any way part of" the New York firm.
The firm was almost entirely controlled by Madoff, who owned the vast majority of the voting shares.
Its accounts for 2007, the last set filed by the firm, show the sale of the nearly £50m worth of shares contributed to an overall increase in the cash position of £82m to £96.3m at the end of December 2007.
Madoff, under house arrest and surveillance in his £4.6m luxury Manhattan apartment, was arrested and charged last month after authorities said he confessed to running a Ponzi scheme, in which early investors profit from funds paid in by later investors. The 70-year-old faces a jail term of up to 20 years and a £3m fine.
Scores of banks, charities, and hedge funds worldwide have said they lost money invested with Madoff.
