British investigate Madoff payments to Austrian banker
British authorities have started an investigation into millions of dollars of payments from the operations of the convicted money manager Bernard L. Madoff to companies linked to the Austrian banker Sonja Kohn, an Austrian official confirmed on Friday.
The Serious Fraud Office had asked Austrian prosecutors in May for help in investigating payments made by Mr. Madoff’s London office for research reports by Bank Medici in Austria, which was majority-owned by Mrs. Kohn, who also served as its chairwoman.
“We’re closely cooperating with the S.F.O. and the U.S. Justice Department in that case,” the official, Gerhard Jarosch, a senior public prosecutor in Austria, said Friday. A separate investigation by the Austrian prosecutor into whether Mrs. Kohn and Bank Medici were involved with Mr. Madoff is continuing, he said.
Prosecutors are looking into whether Mr. Madoff paid more than $40 million to Mrs. Kohn in exchange for turning three Bank Medici funds into feeder funds for his business, The Wall Street Journal reported, citing affidavits filed by prosecutors in the United States and Britain. The Austrian daily Der Standard reported last week that Mrs. Kohn received about £7 million, or $11.5 million, for research reports for which prosecutors were unable to find receipts. Carolin Treichl, a spokeswoman for the former Bank Medici, said Mrs. Kohn was “shocked” by the accusations that she received personal payments from Mr. Madoff and rejects such assertions “vehemently.” Mrs. Kohn has not been charged with wrongdoing but Bank Medici surrendered its banking license in March.
Clemens Trauttenberg, a lawyer for the former Bank Medici, rejected accusations that there were any unaccounted payments to Mrs. Kohn or the bank. He said the British regulator had not yet contacted him or his client but that they were ready to cooperate.
“Research reports about certain market segments and other issues were supplied and there is nothing forbidden about it,” said Mr. Trauttenberg after consulting with Mrs. Kohn, who declined to comment personally. “We already presented more than 100,000 pages of documents to the U.S. Securities and Exchange Commission. Several allegations were proven untrue recently.”
Bank Medici, of which Mrs. Kohn owned 75 percent and UniCredit’s Bank Austria held the rest, generated most of its fees through Madoff-linked investments in 2007 even though Mr. Madoff’s name did not appear in the bank’s annual report that year. Once the fraud was discovered, Bank Medici appeared among the top entries on Mr. Madoff’s victims list. The bank managed and distributed funds that invested about $3.2 billion with Mr. Madoff.
Mr. Madoff was sentenced this week to 150 years in prison, the maximum for his crimes. Mrs. Kohn has repeatedly said that she is a victim of Mr. Madoff.
Mrs. Kohn is now trying to rebuild her reputation in the Austrian banking industry. She renamed the bank 20.20 Medici, using the term with which optometrists describe perfect vision. Keeping the Medici name is a sign that Mrs. Kohn is not trying to “rid herself of what happened in the past,” Mr. Trauttenberg said. At her new venture, Mrs. Kohn plans to offer advisory and research services.
Source: New York Times