Video: Madoff scandal widens news services
updated 12/29/2008 2:16:21 PM ET 2008-12-29T19:16:21

Wealthy Latin Americans appear to be among the big losers in the investment swindle allegedly orchestrated by financier Bernard Madoff, according to a report in The Wall Street Journal Monday.

But exactly how much these investors have lost could be hard to determine. Due to fears about security, tax and the private nature of Latin American fortunes, many in the region are reluctant to divulge information about their investments, the Journal said.

Authorities say Wall Street fund manager Madoff has confessed to running a $50 billion fraud that ensnared investors and charities around the world.

Some Latin American investors reportedly had money in Madoff’s fund through Spanish bank Banco Santander, which has major operations throughout the region. Others appear to have been introduced to the scheme through Andrés Piedrahita, a socially prominent, Colombian-born banker living in Europe, the Journal reported.

Separately on Monday, a trustee presiding over the liquidation of Bernard Madoff's investment firm said he plans to spend $28.1 million on employee salaries and other costs.

Court papers filed in federal bankruptcy court in Manhattan on Friday show that Bank of New York Mellon Corp. has agreed to transfer the money to Trustee Irving Picard.

The court papers said the trustee is in "urgent need of funding for immediate costs of administration of the debtor's estate."

They added that $883,000 had already been transferred to the trustee to pay employees their salaries and health care benefits.

Anyone objecting to the transfer of the $28 million was invited to attend a bankruptcy hearing on the matter Tuesday. A bankruptcy judge must still approve the deal.  

On Sunday European newspaper Sonntag reported that Credit Suisse clients may have lost up to $925.9 million (1 billion Swiss francs) on investments connected to Madoff.

Without giving details of its sources, Sonntag reported that internal forecasts at Credit Suisse showed that customers of Switzerland’s second-largest bank could have lost 0.9-1.0 billion francs in the Madoff case.

Credit Suisse spokesman Jan Vonder Muehll said: “Credit Suisse did not actively recommend or sell products invested with Bernard Madoff.

“Furthermore, none of the funds of hedge funds offered by Credit Suisse contained holdings in Madoff funds.”

Funds managed by Swiss banks have been prominent victims of Madoff, who is accused of running a global Ponzi scheme in which earlier investors are paid off with investments from newer clients.

Reuters contributed to this report.


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