Not that it comes as much of a surprise, but the latest update in the Madoff scandal is the suggestion that others knew of the scam yet still promoted the Madoff funds. It has always been unimaginable to believe that a bunch of math specialists could not detect such a fraud. It's difficult to believe any high level person inside the team or closely working with them on the outside can suggest that they had no idea what was happening. There's a lot more to this story and Madoff probably won't be the only person sent to prison.
The testimony by investigator Edward H. Seidle on Tuesday came as a Connecticut judge froze the funds of Madoff and several of his business associates as part of a lawsuit filed for members of a city's retirement fund who say they invested with companies linked to Madoff.
In his affidavit, Seidle said Madoff's associates -- specifically the so-called "feeder funds" that handled money for Fairfield, Connecticut's retirement plan -- should have known that he was cheating his clients.
"It is my opinion ... that [the funds and their principals] were all aware that Bernard L. Madoff was engaging in illegal conduct in connection with his purported money management operations and intentionally chose to participate and support Madoff's illegal conduct in order to reap enormous illicit financial benefits," he stated.
